COLUMN: Building blocks…of debt

A month after Christmas our youngest son wanted to spend both the birthday and Christmas money he had saved up. He hoped he had enough to buy a Lego train set. We went into the local toy store and he looked at the set he wanted. It was too expensive and he did not have enough money. After thinking for a moment he picked up two more affordable sets, and took those to the cash register. He said he was happy with his sets, and he could afford it. At no time did he ask Mom and Dad to pay for the difference, an expected response from someone his age. He practiced (this time at least) the concept of living within his means. A parenting win for the day and a example of what is missing from many in the political class in Ottawa.

Monday, federal Finance Minister Bill Morneau announced that Canada would have a deficit of $18.4 billion. This after the previous government just breaking even in their last budget in the spring of 2015. The blame was not just placed on the previous government, a tactic all-too-common in Canadian politics. Rather on the sagging economy, the falling dollar, and the gutting of oil prices. This $18.4 billion deficit is the number projected before the $10 billion in the election, promised by Trudeau. That would make this year’s budget run an $28.4 billion deficit. Not the largest in Canadian history, Stephen Harper had that dubious honour. It is still a bad sign for any government to have a $30 billion swing in fortune over the span of one year.

Some pundits wonder if the Trudeau government will be able to honour its “modest” deficit plan with the larger deficit projected. Of course it should not, but that will not stop the government from going down this spending road. There are far too many Lego sets promised, there can be no deviation from the plan. One cannot say no after being the social butterfly making promises to every group during the campaign. That is not good leadership. One must charge on, even if the cupboard is bare and you’re living off credit cards. Onward and downward. Spend like you don’t have it, because you don’t. We don’t.

The $18.4 billion is a drop in the bucket in comparison to our national debt, which sits at $615.8 billion. Trudeau promised deficit spending of $10 billion per year over four years, which would bring the total to $655.8 billion in 2019. Take the actual $18.4 billion and add in the $10 billion promised. The government will have spent three-quarters of their promised funds in only its first year. At this pace and left unchecked, the Liberals will have spent three times the promised amount by 2019. The election-year they promised to return to a balanced budget. That is a big financial hole to dig themselves out of, and it will not be easy.

Trudeau and Morneau have a choice right now. Not to spend more than they already have until they can afford it. They could say no. It would be prudent to say no. That they/we cannot afford it. Instead of going for broke on everything, take one or two items off the shelf and do those until things improve. That form of pragmatism is laudable, and responsible. It also will not happen.

The grownups have spoken and Canada will return to the debt-financed, deficit spending free-for-all that were hallmarks of the 1970’s and 80’s. It is too bad those in power couldn’t learn a lesson or two from a kid in a toy store shopping for Lego.