Don’t blame deficit on the economy
Earlier this year, National Revenue Minister Jean-Pierre Blackburn launched an advertising campaign to promote the Conservatives’ various tax credits, including the $1,350 home renovation tax credit, also known in some circles as the Home Depot bailout.
The message was that Ottawa had created all these great tax deals that stimulate the economy and put cash in pockets. The ad slogan was: « You’ve earned it. Claim it. »
News that Finance Minister Jim Flaherty is projecting a budget deficit this year of « more than » $50-billion suggests Ottawa needs a new advertising campaign and some fresh language to bring the message up to current fiscal conditions. Recommended new slogan: « We’ve borrowed it. Now you pay for it. »
Mr. Flaherty was quick to blame this big expansion in debt and spending on the economic climate. Technically, that’s true. But that obscures the real problem. The real culprit in the ballooning fiscal mess is the chronic inability of governments to control and limit spending. In good times and bad, politicians of all political stripe spend until they create crises that can be resolved only with draconian measures.
Blaming growing deficits on the recession and unforeseen turns in the economy is a political device rather than a solid explanation. Today’s deficits in Ottawa are a direct product of five years of fiscal expansionism and continued spending increases. Spending has been rising at twice the rate of population growth and inflation, an unsustainable trend.