Optimist’s guide to endless def icits

Yesterday, colleague Coyne wrote about the federal finance ministry’s new long-term fiscal projections as a sort of fun, idle math exercise, not to be taken too seriously. He didn’t go far enough: I say they are a form of poetry. The numbers offer us a vision of government as, in essence, a cold input-output device. Not a romantic exercise in national destinyshaping; not an overgrown sulfurous monster that flings men into battle or prison; not an ur-mother guiding our steps with a warm hand between the shoulder blades. Just a spreadsheet on a laptop on a desk in a quiet, bare office in which the squeak of one’s chair seems to echo forever.

The fiscal projections do not know, or do not pretend, that it is important exactly what highways get built or what inflation target the central bank chooses or even what the nominal age for Canada Pension Plan eligibility might be. In guiding the federal debt-to-GDP line between twin paths of harsh austerity and disastrous selffuelling indebtedness, the über-spreadsheet incorporates a few common-sense demographic assumptions — total fertility, immigration levels, life expectancy — and a few economic ones, boiling down to employment rates and labour productivity.

It makes no distinction between competent future governments and inept ones; it is no respecter of persons. It does not know that Trump won or that Brexit happened or that Justin was a drama teacher, and it does not care.

It is a cold exercise. The eyeshade-wearers, as Coyne explained, are merely telling us what broad trajectory the federal budget may be on if you assume that human progress and obvious, inarguable recent trends go on largely as before. (The projections are in the news because, under the Trudeau Liberals, they no longer offer the hope of an early return to nominal federal surplus: the new government has been just austere enough to keep debt growing slightly less fast than the economy.)

But the more you mull over the numbers, you realize that there is an encouraging bourgeois vision behind them, even though they implicitly foresee a low-growth half-century in which the aging of the boomer cohort — that giant, challenging bolus passing through the demographic colon of the world — makes Western civilization look a little more like one giant assisted-living community, with generations of workers devoting their lives to ushering the postwar babies off toward the sunset with as little fuss as possible.

If you are setting out on the second half of your life, this is not exactly inspiring, but it is not like being faced with the First Crusade or World War I, either. The premise of the fiscal projections is “Here’s what the future is likely to look like if the creek don’t rise.” A lot can happen to Canada that is not within its control as a sovereign state: there might be war elsewhere, or a supervolcano, or a pandemic of mutant flu — although technically we already had one of those in 2009, and if you search for its impact on any long-term chart of the economy you will not be able to eyeball it. About the only external shock that is visible on such charts in the period from 1980 to now is the financial crisis of 2008: that caused a slight yankingdown of real GDP, a discernible break in long-range historical trends.

But this only emphasizes the strength of the neoliberal consensus that has existed since we escaped the 1970s. We do not stop to appreciate a world of contained conflict, global trade, and ubiquitous electronic entertainment devices. (Would it help with the pervasive doo-dad guilt if we thought of them as educational devices?) We forget how much worse the Middle East or the Chinese Communist Party could be, and, within living memory, were. Our main task is probably not to lose our heads.

We still seem well immunized against the most outrageous forms of economic irrationality: we see Prime Minister Trudeau 2.0 as representing a radical break with the recent Conservative past, and he is applying some undesirable tension to that debt-to-GDP line with his pension changes, but it does not seem likely that he will precipitate the kind of bidding war for votes with the future’s paycheques that characterized the 1970s. Quite the contrary: he will face years of fierce critique for running apparently endless nominal deficits, even as his plans, in their current form, shrink the state relative to the economy. Since those last seven words are pretty much what I want chiselled into my tombstone, I cannot, honestly, be too upset or irked. Finance Minister Bill Morneau.