Can we come out now that deficit hysteria is over?

Sorry, but I’m afraid I don’t agree that Wednesday’s federal budget was a nonevent: “cynical,” a “placeholder,” “bafflegab and buzzwords” — as others wrote.

I think this budget rocked, in one sense: it did a 180 on the stifling monomania of the last 30 years. I’m referring to the obsession with deficits. As recently as last election, the Liberals promised a balanced budget by the end of their first term. Now their projected deficits are even higher but that promise is gone and the thought process transformed.

Finance Minister Bill Morneau blandly says, they’ll “be responsible every step along the way” and “show a decline in net debt to GDP,” which totally shifts the metric. He might as well have trilled, “Tra-la-la, we really don’t care.” It’s a damn earthquake.

For proof, look not at the opposition — Rona Ambrose predictably called it “spending out of control”— but at the journalists, who were left sputtering. It’s so radical they struggled for words. Peter Mansbridge began interviewing Morneau with: “How does it feel to know you’ll likely never have a balanced budget?”

I wish Morneau had said, “I’m fine, but is there anything I can do to help you through this?”

Mansbridge couldn’t stop, turning plaintively to his panel: “I tried to get him on the deficit . . . Is there a right and wrong any more?”

Jennifer Ditchburn tried to soothe him with, “Deficit is a word they just don’t use any more.”

If I’m hyperventilating, it’s because I’ve led a cramped existence all these years, bowed under the weight of deficitism since I first heard the phrase, “Yeah, but how ya gonna pay for that?” during the 1988 election. No one knew where it came from or how it usurped all other political concerns, like a missive from heaven, or the Fraser Institute. Paul Martin adopted it, using it to sink the Canada we knew, and his own career.

I don’t really expect any Liberal government, including this one, to do anything very radical or publicly beneficial with their new leash

Yet, there’s apparently an ebb and flow to these things: A Nanos poll says Canadians now want Ottawa to run deficits as long as overall debt declines relative to GDP. That’s a pretty sophisticated alteration for ordinary folks to make intuitively; it makes you wonder if someone isn’t pulling strings somewhere and decided to drop a new backdrop (to public discourse) over the previous one.

Is this stuff all orchestrated from offstage and the actors simply read the new lines? If so, I wish I knew who’s rewriting them. Or maybe the cast just got tired of being scared out of their pants, like the kids in Monsters Inc.

The point is, all the angst-ridden, action-inhibiting deficit phobia wasn’t based on immutable laws of nature. It suited the needs of some heavy players at the time, who are now prepared to cheerily jettison it for its near opposite. No harm done, eh? What might replace it?

Personally, I’m intrigued by MMT (Modern Monetary Theory), a version of Keynesianism. It maintains that governments can create (or ‘print’) money to fill public needs and can’t go into debt to themselves, though they should keep an eye on inflation.

It has respectable advocates, such as James Galbraith (son of John Kenneth). Paul Hellyer, who’s been chirping at Liberal governments since he was in one in the 1970s, says he remembers the Bank of Canada governor who unilaterally decreed that henceforth all public debt would be owed to the big banks, not ourselves. He says it’s been downhill, or downhell, ever since.

I don’t really expect any Liberal government, including this one, to do anything very radical or publicly beneficial with their new leash but if you want some real common sense on the subject you can’t beat Tommy Douglas in his farewell speech as the NDP’s first leader, in 1971. He was recalling challenges early in his career as a socialist voice for activist government:

“In 1937, the minister of finance asked, where will we get the money? (Liberal finance minister) Benson asks the same question today. My reply at that time was that if we were to go to war, the minister would find the money. And it turned out to be true . . . we can, if we want to, mobilize the same resources to fight poverty, unemployment and social injustice.”

Good point, IMHO. Now get some of those bright economists and pollsters to figure out what myths and manias are required to get on with it.