A Liberal government will reduce the deficit. We will implement new programs only if they can be funded within existing expenditures. We will exercise unwavering discipline in controlling federal spending . Expenditure reductions will be achieved by cancelling unnecessary programs, streamlining processes and eliminating duplication.
Its hard to imagine the Liberals making such a promise in this day and age, but that is what they pledged to do in their 1993 Red Book. Contrast that to the 2015 election, when the party campaigned on the idea of running $10-billion deficits for three years, for a total of $30 billion a limit they blew through (and it wasnt even close). Or the 2019 election, when it gave up on balancing the books altogether and introduced a plan to run yearly deficits of $20 billion over its four-year mandate.
The coronavirus, however, changes everything. Those deficits now seem like chump change in the face of the Parliamentary Budget Officers (PBO) April 30 forecast of a $252.1-billion deficit in 2020-21 a number that, given the spate of spending announcements since then, he now says is likely to prove very optimistic.
As a percentage of the economy, even the optimistic number would be the highest on record. And that doesnt include the provinces, which have also seen their expenditures balloon. All told, a National Bank Financial report this week estimated that combined federal and provincial deficits could reach a staggering $350 billion, which represents about 20 per cent of gross domestic product.
If theres any good news, its that the massive increase in government spending that weve witnessed since the start of this pandemic will (hopefully) be temporary. Yes, COVID-19 has exposed critical holes in our health-care system, long-term care facilities and supply of critical goods that will require long-term expenditures in order to address. But the vast majority of the spending the financial support for workers who have lost their jobs and companies that have lost their revenue streams can easily come to an end once the health threat subsides.
Thats not to say that it is inevitable, though. We have already heard calls for the government to transform the Canada Emergency Response Benefit into a universal basic income program, for the state to use this crisis as an opportunity to replace fossil fuels with green energy pick your pet cause and chances are that someone is using the coronavirus as an excuse to push it.
But the Liberals must resist these calls, because the fact is that we will not be able to afford any of it. We wont even be able to afford any of the programs, like universal pharmacare, that Parliament was considering at the beginning of the year.
The Liberals justified their deficit spending before the pandemic by citing Canadas relatively good debt-to-GDP ratio, the amount of government debt relative to the size of the economy. Yet the PBO estimates that the national debt will hit $962 billion this year, up from $685 billion in 2018, and could easily top $1 trillion thats a one with 12 zeroes the year after.
Meanwhile, Statistics Canada released a flash estimate last month, which suggested that real GDP shrank nine per cent in March. The PBOs scenario estimates that real GDP will decline by 12 per cent this year, which would be four times worse than the worst year since we started keeping records in 1961.
Divide those two numbers and we could be looking at a debt-to-GDP ratio of nearly 50 per cent by the end of the year. This, however, would not be unprecedented: it stood at a whopping 66.6 per cent in 1995.
That was when Prime Minister Jean Chrtien and Finance Minister Paul Martin launched an aggressive effort to balance the budget that still makes conservatives jealous. They did so not by massively increasing taxes, but by cutting federal spending by 14 per cent between 1995 and 1998. Thanks to these austerity measures, the economy prospered, growing between four and five per cent a year between 1997 and 2000. Accordingly, our debt-to-GDP ratio dropped to 29 per cent by 2009.
Barring a sudden end to their minority government, when the current crisis abates, Prime Minister Justin Trudeau and Finance Minister Bill Morneau will face a similar situation. It has always seemed somewhat paradoxical that Chrtien and his American counterpart, President Bill Clinton, were able to balance their budgets in the 90s, while their conservative successors watched them balloon once again. Yet centre-left governments often find it easier to drastically reduce spending, because people tend to believe that they are doing it out of necessity, rather than ideology, and therefore are more inclined to give them a pass.
Will this current crop of Liberals follow in the footsteps of their predecessors and do what needs to be done to stabilize this countrys finances, retaining the prosperity that sustains our way of life and preserving it for future generations? We certainly hope so, but their own recent history is cause for concern.
Follow this link:
NP View: Will these Liberals be willing to do what Chrtien and Martin did? - National Post
- Paul Krugman - The Conscience of a Liberal - December 11th, 2016 [December 11th, 2016]
- Liberal Democrat Voice - December 11th, 2016 [December 11th, 2016]
- Urban Dictionary : liberal - December 12th, 2016 [December 12th, 2016]
- READ MORE : Liberal groups want delay of Sessions' hearing - January 5th, 2017 [January 5th, 2017]
- What Is a Liberal - What Is Liberal Bias - January 9th, 2017 [January 9th, 2017]
- Liberal Party of Australia - Wikipedia - February 1st, 2017 [February 1st, 2017]
- Conservatives reject liberal humor in Trump era: Dave Berg - USA TODAY - February 7th, 2017 [February 7th, 2017]
- Liberal Judicial Activism Borders On Insurrection - Daily Caller - February 7th, 2017 [February 7th, 2017]
- Liberal Fake News Reportedly Growing - Yahoo News - February 7th, 2017 [February 7th, 2017]
- House Science Chairman Sees Liberal Cover-Up on Warming Pause - Scientific American - February 7th, 2017 [February 7th, 2017]
- Furious Liberal MPs turn on 'rat' Cory Bernardi - The Australian Financial Review - February 7th, 2017 [February 7th, 2017]
- 'Rallying point': Abbott to headline conservative Liberal fundraiser in Melbourne - The Age - February 7th, 2017 [February 7th, 2017]
- I'm A Liberal, And I Want Milo Yiannopoulos On My Campus - Huffington Post - February 7th, 2017 [February 7th, 2017]
- Cory Bernardi says he resents being used in Liberal party 'proxy war' - The Guardian - February 7th, 2017 [February 7th, 2017]
- HuffPo's New Editor In Chief Is Already Undoing Arianna's Liberal Legacy - Daily Caller - February 7th, 2017 [February 7th, 2017]
- Why Are Liberals Surprised by the Senate Confirmation of DeVos? - National Review - February 7th, 2017 [February 7th, 2017]
- Liberal Hashtag #NotMySuperBowlChamps Protests Patriots' Support of Trump - Fox News Insider - February 7th, 2017 [February 7th, 2017]
- All liberals are hypocrites. I know because I am one - Quartz - February 7th, 2017 [February 7th, 2017]
- '9th Circus'? Scholars Say Court's Liberal Rep Is Overblown - ABC News - February 7th, 2017 [February 7th, 2017]
- Economic freedom - Wikipedia - February 8th, 2017 [February 8th, 2017]
- Liberal land - Richfield Reaper - February 9th, 2017 [February 9th, 2017]
- Liberal groups file lawsuit to block Trump's deregulation order - Washington Examiner - February 9th, 2017 [February 9th, 2017]
- Strategies for Saving the Liberal Arts - Inside Higher Ed (blog) - February 9th, 2017 [February 9th, 2017]
- This day in Liberal Judicial ActivismFebruary 9 - National Review - February 9th, 2017 [February 9th, 2017]
- The Marco Rubio knockdown of Elizabeth Warren no liberal media outlet will cover - Conservative Review - February 9th, 2017 [February 9th, 2017]
- Wisconsin Gov. Scott Walker proposes surprisingly liberal budget - Chicago Tribune - February 9th, 2017 [February 9th, 2017]
- Why the liberal world order is worth saving - Irish Times - February 9th, 2017 [February 9th, 2017]
- Tim Scott reads racist tweets by 'liberal left' over support for Jeff Sessions - Washington Times - February 9th, 2017 [February 9th, 2017]
- Five tips on having a safe conversation with your liberal spouse or conservative brother - Fox News - February 10th, 2017 [February 10th, 2017]
- Why Liberal Policies Are Terrible For Young People - Power Line (blog) - February 10th, 2017 [February 10th, 2017]
- Trevor Bauer goes on long rant defending tweet about liberal bias - Yahoo Sports - February 10th, 2017 [February 10th, 2017]
- Liberal Tolerance: Sen. Tim Scott Reads His Hate Mail On Senate Floor For Supporting Sessions As AG - Townhall - February 10th, 2017 [February 10th, 2017]
- Claws Out For Ivanka Trump Show Liberal Love For Women Is A Sham - The Federalist - February 10th, 2017 [February 10th, 2017]
- Trump Takes a Running Whack at the Liberal Interventionists - The Nation. - February 10th, 2017 [February 10th, 2017]
- Networks Swoon Over GOP 'Feeling the Wrath' of Liberal Town Hall Protesters - NewsBusters (blog) - February 11th, 2017 [February 11th, 2017]
- Liberals, don't fall into the right's 'identity politics' trap - The Guardian - February 11th, 2017 [February 11th, 2017]
- Liberal pledge: Revamp for 69 outdated schools in $560 million spend - Perth Now - February 11th, 2017 [February 11th, 2017]
- Indians swept by Liberal in WAC action - Hays Daily News - February 11th, 2017 [February 11th, 2017]
- Trump's attacks on the press and how the liberal media myth has empowered him - Salon - February 11th, 2017 [February 11th, 2017]
- The Paranoid Style of Anti-Trump Politics - National Review - February 12th, 2017 [February 12th, 2017]
- What the Liberal-One Nation preference deal could mean at the ballot box - ABC Online - February 12th, 2017 [February 12th, 2017]
- Finley: Left bites Ivanka's liberal hand - The Detroit News - February 12th, 2017 [February 12th, 2017]
- A new, liberal tea party is forming. Can it last without turning against Democrats? - Washington Post - February 12th, 2017 [February 12th, 2017]
- Since When Is Being a Woman a Liberal Cause? - The New York ... - New York Times - February 12th, 2017 [February 12th, 2017]
- This liberal Brooklynite is on the hunt for conservative friends - New York Post - February 12th, 2017 [February 12th, 2017]
- Small-l liberal voters have been abandoned in the race to the right - The Sydney Morning Herald - February 12th, 2017 [February 12th, 2017]
- Rich, Liberal Celebrities Lecture and Claim to Stand for 'We the People' at the 2017 Grammys - NewsBusters (blog) - February 13th, 2017 [February 13th, 2017]
- WA One Nation candidates refuse to preference Liberals - ABC Online - February 13th, 2017 [February 13th, 2017]
- India's liberal bubble has shrunk to irrelevance in the age of Narendra Modi - Quartz - February 13th, 2017 [February 13th, 2017]
- Liberal superhero Justin Trudeau is not immune to the forces of Trump - CNN - February 13th, 2017 [February 13th, 2017]
- A new satire must emerge one that breaks out of the liberal bubble - The Guardian - February 13th, 2017 [February 13th, 2017]
- A liberal Tea Party, the pope helps spring a terrorist and other notable commentary - New York Post - February 13th, 2017 [February 13th, 2017]
- At Ole Miss, a Liberal Agitator's Education - New York Times - February 13th, 2017 [February 13th, 2017]
- Liberal Frenzy: 'Impeach' Trump; 'Traitor! Resign by Morning' - CNSNews.com - February 14th, 2017 [February 14th, 2017]
- Chelsea Clinton future run for political shunned by liberal activists ... - Washington Times - February 14th, 2017 [February 14th, 2017]
- One Nation could gain more than the Liberals from Western Australia seats deal - The Guardian - February 14th, 2017 [February 14th, 2017]
- Conservatives: Walker's budget plan is anything but 'liberal' - Watchdog.org - February 15th, 2017 [February 15th, 2017]
- Trump Says Liberal Media 'Going Crazy With Blind Hatred' - Daily Caller - February 15th, 2017 [February 15th, 2017]
- I'm a bleeding-heart liberal cleric but the Church of England must not accept gay marriage - Telegraph.co.uk - February 15th, 2017 [February 15th, 2017]
- What's a Liberal to Do When His Spouse Is a Trump Zealot? - New York Times - February 15th, 2017 [February 15th, 2017]
- Liberal Activists Join Forces Against a Common Foe: Trump - New York Times - February 15th, 2017 [February 15th, 2017]
- John Howard backs Liberal preference deal with One Nation in WA - The Guardian - February 16th, 2017 [February 16th, 2017]
- Liberal ex-MP who called party a 'gay club' likely to be kicked out - The Australian Financial Review - February 16th, 2017 [February 16th, 2017]
- New Liberal PAC Targets Democrats for Primaries - NBCNews.com - February 16th, 2017 [February 16th, 2017]
- 'Liberals will continue to lose': Bill Maher defends Milo Yiannopoulos booking after panelist boycotts - Washington Post - February 16th, 2017 [February 16th, 2017]
- Whatever happened to liberal Democrats, anyway? - Chicago Tribune - Chicago Tribune - February 16th, 2017 [February 16th, 2017]
- Sportswriting Has Become a Liberal Profession Here's How It Happened - The Ringer (blog) - February 16th, 2017 [February 16th, 2017]
- If the Church of England continues to smother liberal Anglicans, it is heading for a split - Telegraph.co.uk - February 16th, 2017 [February 16th, 2017]
- Major liberal group opposes Gorsuch confirmation - USA TODAY - February 16th, 2017 [February 16th, 2017]
- The True Origins of the Phrase 'Bleeding-Heart Liberal' - Atlas Obscura - February 17th, 2017 [February 17th, 2017]
- Liberals, Tories spar over Islamophobia motion in full-day debate - The Globe and Mail - February 17th, 2017 [February 17th, 2017]
- Where Have All the Liberal Democrats Gone? - Townhall - February 17th, 2017 [February 17th, 2017]
- Vicious attacks on Ivanka Trump exposes liberal hypocrisy - The Hill (blog) - February 17th, 2017 [February 17th, 2017]
- Can Emmanuel Macron win? Why France is ripe for a liberal resurgence - New Statesman - February 17th, 2017 [February 17th, 2017]
- Victorian Liberals: factional fight exposes deep divisions - The Age - February 17th, 2017 [February 17th, 2017]
- 10 Unfortunate Liberal Myths Conservatives Often Believe - Observer - February 17th, 2017 [February 17th, 2017]
- Terri Lovell: Liberal oppression - Santa Clarita Valley Signal - February 17th, 2017 [February 17th, 2017]
- Where's the liberal outrage over civil liberties in the Flynn case? - Minneapolis Star Tribune - February 18th, 2017 [February 18th, 2017]
- Liberal, conservative Jews in US increasingly divided over Trump - Chicago Tribune - February 18th, 2017 [February 18th, 2017]
- Anti-Islamophobia debate might define both Liberals and Conservatives - CBC.ca - February 18th, 2017 [February 18th, 2017]