After three decades of deficits, the U.S. Ontario borrowed itself into a crisis in the 1990s, underwent a painful period of retrenchment under Mike Harris, then jumped straight back into massive borrowing under Dalton McGuinty. It is evidently a requirement of political ambition that you pay no attention to anything that happened before you were elected. Government after government gets into trouble by ignoring the same lessons. Alberta set up its Heritage Fund decades ago with the same idea in mind, but soon outspent the ability of the fund to provide more than minimal support for hard times. The only governments I know that have ever made more than token allowances for the inevitability of a slowdown are a few oil-rich countries like Norway. No one allows for the fact that economies go in cycles, and eventually there will be a downturn. If they figure they can get through the next budget or two, then everything is okay. The politicians justify this to themselves via short-term calculations. is worse: approaching $50,000 per person. Article content Canada’s federal debt now stands at about $17,000 per person. This advertisement has not loaded yet, but your article continues below. Even the smarter countries borrowed too much: Germany rates as the strongest EU economy mainly because its productivity allows it to handle its massive debt without going broke, not because it was smart enough not to borrow. Borrowing provided a short-term illusion of prosperity, and that was good enough. So, because they could borrow, they did borrow. A major explanation given for the crushing indebtedness of Greece, Italy, Spain and other European Union members is that the advent of the Euro as a common currency gave them access to credit at much lower rates. How stupid is that? For whatever reason - ignorance, ambition, ineptitude - politicians don’t learn, and voters don’t demand a better performance. But after a brief spell of paying back debt, we leapt right back into the mess that had taken so much effort to escape. Both countries went through difficult times before balancing their budgets a decade ago, enduring recessions, collapses and periods of high unemployment in the process. That’s just federal, not including provincial debt. Article contentĬanada’s federal debt now stands at about $17,000 per person. If the money could be borrowed and repayment pushed off into some distant future, well past our own working years, that was okay. Except we weren’t really willing to pay for it. ![]() We needed baby bonuses, pension schemes, retirement supplements, housing assistance, medical coverage and poverty alleviation programs because we were progressive, open-minded people in favour of social justice. We justified it to ourselves (or some of us did) by pretending it was out of concern for the less fortunate. In the history of really bad economics, I doubt there’s ever been one generation that lived so high off the hog while letting the bills pile up for payment by a subsequent set of grandchildren. If you then leap right back into deep debt, you’re an idiot.Which makes the baby boom generation just about the dumbest bunch of cementheads since the advent of free public education. If you make this mistake once, and manage to haul yourself out of it, you’re lucky. Manage Print Subscription / Tax Receipt.
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