March 01, 2017

How to deal with out of control deficits

Joe OliverArchive

Government’s first objective in dealing with ballooning deficits and crushing debt should be to recognize the problem and then publicly acknowledge it.

That sounds self-evident.

Yet it is not happening, due to an ideological mindset that denies the very idea that there is a problem.

Still, warning signs right across Canada are impossible to ignore. The day before Christmas, the Department of Finance projected deficits continuing to mid-century, with debt mounting to $1.5 trillion by 2045. That’s startling, since only two years earlier the Department projected that all the debt would be paid off!

In 28 years, our children and grandchildren will be on the hook for $82 billion in annual interest. The problem is, debt undermines long-term growth. Debt-service obligations divert funds from social programs and drive up taxes, making life less affordable and businesses less competitive.

Furthermore, North America is hit by a recession or slowdown on average every eight years.

What do you do then?

And then there is inter-generational unfairness. A recent Manning Centre poll revealed that 82 per cent of Millennials believe the deficit and debt are major problems.

Government first has to understand and then explain that there is no free lunch. When he prepares his budget, the Minister of Finance must be "Doctor No."

Yet, the Liberals’ election promise of a “modest” deficit of $10 billion quickly tripled. Then they backtracked on bringing the budget into balance in four years.

At that point, every rent seeker and special interest group was at the trough.

WATCH as I explain what the Liberals' Finance Minister must take into consideration when tackling this urgent issue.

Comments
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commented 2017-03-01 17:44:33 -0500
The morons that voted Liberal because they blindly believed Trudeau’s uneducated ideological rhetoric’s, do not understand that the Liberals spend so much for very selfish reasons. They have money to invest in companies that benefit from all these government spending and they are very friendly with the bankers that will reap billions in profit from the interest to be paid for years and years to come.
Do not forget the $$ they also receive under the table for giving out those contracts. Remember the Charbonneau commission and the Gomery commission…………… mainly all about Liberals. With the billions promised for infrastructure with no real plans on how it will be spent, you can be very sure Liberals all over the country are salivating and counting their illicit gains already. There will be so much corruption again generated by the issuance of contracts to come that the Liberal coffers will be overflowing. They will probably have to hide some of the $$ off-shore. Young seniors (those in their early sixties that will probably live to mid eighties and beyond) and all those younger have been marked to pay, and pay, and pay………till death do us part.
commented 2017-03-01 16:53:27 -0500
Progressive governments borrow huge sums of money to stimulate the economy. If the economy was stimulated by Liberal/Progressive borrowing, we wouldn’t have a 500-600 billion dollar debt, but we do. That fact alone is proof of that particular policy failure. So if it hasn’t worked in the past, why does anyone believe it will work now or in the future? Here’s a thought but it takes discipline. Conservatives should campaign on promising to lower taxes by the amount of debt they no longer have to service. For example, if 40 cents out of each tax dollar goes to service the debt, once that debt is gone, taxes would go down 40 percent, and that my friends- a 40% tax reduction and no debt would really kick start the economy. Of course, it would have to be done piece by piece because the debt can’t be eliminated all at once, but you could promise tax cuts corresponding to debt reduction, which in turn means deficit spending has to stop immediately in that debt is simply the accumulation of deficits. Remember this axiom. “Governments have no money except that which they extract from the taxpayer”.
commented 2017-03-01 16:31:29 -0500
And who among us didn’t see that the “modest $10 billion deficit” would grow exponentially? Only the willfully blind glad handers of the left. I’m betting that the Tater Tot can’t balance his own cheque book.
commented 2017-03-01 15:46:08 -0500
Excellent video, Joe. Glad that you are contributing. You are a voice of common sense.

Can we force feed this video to Justin?
commented 2017-03-01 14:40:11 -0500
It is so great to have Joe Oliver share his knowledge & wisdom. Hope to see much more From him.
commented 2017-03-01 13:01:09 -0500
They loved his hair and pot. Now they find out they will have to pay pay pay for years years years.
This is why i am a conservative.
commented 2017-03-01 12:42:03 -0500
Great to hear someone with a steady hand and experience give us his perspective!