Dollars and nonsense

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March 24, 2016 10:18 AM

In our household we live within our means and always have. 
So to have our government not do the same does not sit well with me. 
But then, to be fair, governments, like individuals, are not immune to unforeseen circumstances and hard times. 
Borrowing was an unacceptable option for our personal shortfalls, but we were wise enough to have saved for just such emergencies.
I guess that’s where we differ from governments. 
Those have the option to run deficits which apparently results in less incentive to save for emergencies. 
When discussing budgets, certain terminology is used so, before I go on and if you will bear with me, here is a brief, simplistic explanation of the basic terms. 
When a government spends more money than it brings in for the year it’s called a deficit and conversely more money coming in than being spent is called a surplus. 
A deficit requires money to be borrowed to cover the shortfall and the deficits/borrowing from all years combined becomes our national debt, the total we as Canadians owe. 
Interest is charged against this borrowed money,  thereby adding to the debt. 
Gross Domestic Product, or GDP, is the total value of all goods and services produced in Canada annually. 
Deficits, surpluses and debt are often compared to GDP as a percentage to measure changes and also their significance. 
Now the last election did give the Liberals an OK to run a planned annual deficit of $10 billion for each of the next three years in an attempt to reverse the Conservative’s dark decade, restore neglected funding and to stimulate the worst stagnant economic growth under Harper since 1946. 
But then we heard from a variety of sources the drastic drop in oil prices would leave the government’s revenue $18 billion short this year. 
As winners of the election, the Liberals inherited this $18 billion shortfall on top of their already planned $10 billion deficit making this year’s projected deficit $28 billion. 
Not surprisingly, Finance Minister Bill Morneau just brought down the Liberal’s first budget with a deficit of $ 29.4 billion.
Federal deficits are certainly nothing new and numerous Google searches of statics and reputable non-partisan websites reveals the following data. 
The Liberals under Pierre Trudeau started budgeting significant deficits back in 1975 after seven practically balanced budgets (less than 2.2 billion). 
During their fourteen years in power (1968-79 and 1980-84) they ran 12 deficits totalling $138.37 billion at a time when lending interest rates ranged from 8 to 21.46 per cent.  Pierre Trudeau began his term with a national debt of $77.4 billion and left us with a debt of $157.2 billion. 
He was replaced by conservative Brian Mulroney (1984-93).  Mulroney ran deficits in each of his nine years in power ranging from $29 billion to $39 billion annually which if adjusted to a 2015 equivalent would range from $49.4 - $77.88 billion annually. 
These nine deficits totalled $293.5 billion leaving us with a $487.5 billion debt (a $67.7 per cent increase) with interest rates between 11 and 15 per cent. 
The Liberal’s Jean Chrétien inherited the now galloping debt in 1993 with the majority of federal government borrowing going to merely paying interest on our debt.  In his eleven years in power (1993-2004), Chrétien ran four deficits (1993-97) totalling $113.8 billion and seven surpluses totalling $64.5 billion.
The Liberals carried on with Paul Martin (2004-06) who ran another two surpluses for both his years equalling $14.6 billion. 
The total debt at the end of this Liberals period was $481.5 billion, a decrease of 1.2 per cent. 
Stephen Harper took over in 2006 and ran six deficits totalling $144.7 billion, two surpluses equalling $23.4 billion and one disputed balanced budget. 
Canadians were left with a $600 billion-plus debt (varying reports) at the end of Harper’s term, a 24.6 per cent increase.
A score card would look like this:  Liberal’s deficits = 16 of 25 years = 64 per cent of the time, contributing $252.17 billion — plus interest — to our national debt; Conservative’s deficits = 15 of 19 years = 79 per cent of the time, contributing $438.2 billion — plus interest — to our national debt. 
Certainly far from a stellar performance from either party. 
Conservatives were in power for 43 per cent of that time but still contributed 63.4 per cent more to our national debt than the Liberals. 
So when one hears Rona Ambrose, Michelle Rempel or any other conservative pundit express their righteous indignation towards a Liberal deficit, you really have to wonder whether they are obscenely hypocritical, blatantly ignorant or simply think that we are that stupid. 
The NDP have no record federally so I went looking provincially. 
My search reveal that since 1980 the NDP held office for 52 combined years with 50 per cent of their budgets being deficits producing a 0.77 per cent net surplus compared to provincial GDP. 
Your individual share of Canada’s federal debt, about $16,700.

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