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$1 of deficit equals $3 of debt

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TORONTO — "I’ll gladly pay you Tuesday for a hamburger today," Wimpy would say.

You name it, and somewhere in this country, a politician has probably made the same promise. And like Popeye’s portly friend, politicians never explain why.

Almost none of those promises have come with a bigger picture that situates them within a set of choices that are being made.

Governing is about making choices — choices about how to raise money and where to spend it.

Politicians are more than willing to concentrate on the spending and not the making.

There are good reasons to spend money in the public sector—and this is not a rant on taxes and spending.

Trusting the private sector to handle provisioning of a public good or service or asking that it be provided publicly to ensure it is done reasonably (if not always as well as it could have been: equity comes at a price, too) is a choice we can make.

Taking money from private hands — yours, mine, or the business on the corner — to pay for public goods has effects in the broader community. We can choose whether to pay the piper here or there, that’s all.

There are even good times to have our public sector run a deficit, just as businesses sometime take on debt to improve their future prospects, or families borrow to grow their possibilities.

There are also bad times and reasons to take on debt in a business or family. It’s about choices.

Right now the media is full of bad news coming from Canada’s governments. Balancing the budget is a receding goal. Cutbacks, zero-per cent increases, pension benefit changes are the order of the day.

Meanwhile, roads decay, transit systems are not built, community and social housing languish, those on social assistance remain impoverished; there’s a long list of things to fix and apparently no money for any of it.

What we’re not getting from any of our governments or their official oppositions is a comprehensive vision of how we get from where we are to where they want us to be.

Oh, we get grab bags of promises. We get small bits and pieces here and there. But we don’t get a big picture.

On health care, we don’t get a picture of how shifting money from acute care (paying hospitals) to long-term care, home care, etc. might make the system work better for an aging population — death and the route there (aging) is that other certainty.

On transportation, we don’t get a picture of how we make our city regions function better, how to integrate across boundaries, how we cut travel times to make more opportunities available to more people. We don’t get a discussion of the options and tradeoffs in paying for it, either, or in how speeding the city up might require that some modes of transportation be favoured over others.

On social care, we don’t get a realistic discussion of how to run the system of housing supports, social housing, home care, etc. to ensure the disabled are cared for and the poor get a leg up while ensuring that the money that is spent gets to those who need it.

Every $1 of deficit spending (no matter how noble the purpose) burdens the future with about $3 to be paid off by the time the principal is paid back and the interest covered. Already, interest is often one of the top four spending lines in a provincial budget—and that’s with interest rates at their lowest in a generation or more. They can only go up and the accumulated burden will have to come out of programs.

Telling us the big picture, pulling the pieces together, and making choices so that our grandchildren aren’t paying for our errors is what we as citizens should be insisting that our politicians do.

Simply protesting and demanding more, more, more won’t cut it any longer. We need to be spared the Wimpy promises. We have to choose and we have to know why we choose — tell us the big picture.

 

Bruce Stewart is a Toronto management consultant.

 

—Troy Media

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