If I were running the Liberal Party of Canada – now there’s a scary thought, for Liberals and for me – this is the message I’d hammer home every day on the campaign trail:
It seems like only yesterday Canada was running surpluses and was led by a fiscally conservative government. Now both seem distant memories, as recently confirmed by the latest news that the Harper government will run deficits even larger than planned and for even longer than planned. Over at least seven years Harper plans to add no less than $170.3 billion more to the federal debt. It is time for Canada to talk about the costs of this spending problem.
Unemployment was a lot higher during the recession of the 1980s and 1990s than it is today, and was similar during the 1970s. When one factors in another relevant economic indicator – inflation – Canada’s much better off during this recession than during any of the last three.
Despite this fact, the Harper government has chosen to go on a giant spending spree. Last fall the prime minister promised a balanced budget, as did all federal party leaders. Much has changed since then. The January budget projected a deficit of $34 billion. In May it was increased to $50 billion. Now the deficit figure has been upped to almost $56 billion. Since revenue has fallen by only $17 billion, this giant deficit figure reveals how massive over-spending is the key deficit culprit. In fact, from fiscal year 2005-06 through 2009-10 the Harper government will have increased program spending by $66.7 billion – a 38-per-cent increase in only four years.
Much of the so-called stimulus spending was “temporary.” It’s turning out to be as temporary as income taxes, when they were “temporarily” introduced in 1917.