Be careful what you wish for
I’m not an economist. Sure, I took Introduction to Macro and Micro Economics 101 and 102 at university so I know the difference between John Maynard Keynes and Karl Marx but that’s about as far as it goes. So what follows should be taken as nothing more than an attempt to ask a few common sense questions about Tuesday’s Liberal budget.
One thing I know for sure is that I wouldn’t want to be Finance Minister Chrystia Freeland even if she got a new pair of shoes. Not only did she have to keep 40 million or so Canadians of all political stripe, income level, race, religion and sexual orientation happy but she also had to please her boss whose vision only goes as far as the next election.
This is not to say that actually creating a budget should be that difficult. Most Canadians, at one time or another, have given serious thought to their own budgets: it’s simple. First you calculate how much money you have coming in, we’ll call that ‘revenue’ and then you calculate what you have to pay out; those are ‘expenditures.’ If revenues exceed expenditures you’ve got money to spend any way you want. If you’re already paying out more than you bring in you don’t get the new car or that week in Aruba you’ve always wanted.
Some of us can remember a long time ago when a finance minister announcing a new budget would boast that the budget was balanced or, on rare occasions, that the government had actually managed to create a surplus. For her part, Ms Freeland seems to be content, if not actually proud, of the fact that she managed, as promised, to not exceed the projected $39.8 billion deficit already on the books. Isn’t that sort of like admitting “We’re broke but this budget won’t make things any the worse.” What it does mean is that our accumulated national debt puts us in hawk for around $76,135 per person.
Like most Finance Ministers, Ms Freeland goes on to predict a gradual reduction in the deficit to around a mere $20 billion over the next five years. To do this she introduced some new taxes on the capital gains earned by the tiny minority of Canadians who are already extraordinarily rich and a similar tax on large corporations who are earning, according to the government, an unjustifiably high profit margin on the goods they sell.
All in all, the new levies are predicted to bring in another $19.3 billion a year. Critics of the move, however, point to a similar attempt by French authorities that backfired when a large number of the wealthy just packed up and left the country, along with their money.
Many of the measures in the new budget are specifically designed to help young people who are struggling to deal with student loans, the high cost of accommodation, unaffordable homes, expensive daycare and the like. Not surprisingly, these same ‘millennials,’ according to recent polls, have been deserting the Liberals in favour of both the NDP and, more importantly, Pierre Poilievre’s Conservatives.
And yet, even given the Liberal’s tendency to spend our money somewhat willy nilly there’s another old adage that comes to mind, “Be careful what you wish for.”