WILL FUTURE JUSTIN BE MORE FISCALLY RESPONSIBLE THAN PRESENT JUSTIN?
Prime minister may really believe that the budget will balance itself
I read somewhere that procrastination is a product of our faith in a better, future self.
To a degenerate procrastinator like me, this makes sense. When I put off something important, I am relying on future Les to get it done later. Justifiably or not, I presume future Les will be more diligent, more responsible, than present Les.
Good old future Les will get it done, I tell myself. Never mind that past Les unwisely relied on present Les to do what now is expected of future Les, and around and around we go.
It occurs to me that government deficits are driven by the same kind of thinking. When Justin Trudeau’s Liberal’s budget for a $29-billion deficit this year, when the country is not even in recession, they are relying on their future, more fiscally responsible selves to soak it up with equivalent surpluses, plus interest. Why they would be more responsible in future than today is not clear. More likely, they will just blow by the budgeted deficit, as they blew by their campaign promise (times three) to keep it at $10 billion. But don’t worry, future Justin will get spending under control. As if. When Trudeau infamously pronounced that, under his government, “the budget will balance itself,” we took it as a campaign gaffe. He couldn’t really believe that, could he? A deficit ballooning for no good reason to $29 billion from $10 billion suggests, however, he does believe it.
He is not even relying on future Justin to be more responsible, as the conventional spendthrift would. He is just spending now and not worrying at all about who’s going to pay.
I fear Trudeau is one of those oblivious rich guys who hasn’t had to worry about money and fails to understand that the rest of us do. He has never met a payroll or handled money at all. His expenses looked after themselves.
I learned something about rich guys from an artist I know. When I paid him for a painting I picked up at his studio, he said thanks so much for paying now, on delivery. This came as a surprise. I had naively imagined everyone paid on delivery.
I had to ask him: Who doesn’t pay on delivery? Rich people, he said. They pick up the painting and expect an invoice in the mail, then they still don’t pay and have to be reminded, then reminded again. Then they get indignant.
That the artist needs the money is beyond the realm of their thinking.
Of course, this is just an anecdote. A lot of rich people are totally responsible about paying their bills. (An artist I know would be thrilled to meet them.)
The test for Trudeau is whether he can stick to any kind of number at all. I doubt it. If $10 billion can become $29 billion for no particular reason, the sky is the limit. As with the Syrian refugees, he will just move the target and pronounce the mission accomplished.
Spending money is easy. Government is inundated every day with proposals, recommendations and demands to spend money. Rarely does anyone ask the government for less. If there was a minister responsible for cost cutting — and there probably should be — he would be very lonely. No one would ever come to see him while all the other ministries, the spending ministries, draw lines of supplicants stretching over the horizon.
What’s not easy is controlling spending. There is no reason to believe future Justin Trudeau will be any better at it than present Justin Trudeau. Future Justin will just keep spending. When the creditors come calling, he can ask them to accept payment in sunny ways.
The prime minister’s stated thinking is that deficit spending will stimulate the economy, which in turn will generate increased government revenues to pay off the debt. It’s like a fiscal perpetual motion machine: Money funnels from an elevated hopper through an impeller that drives a bucket wheel that lifts money into the hopper.
And around and around it goes.