What happened in 2008? What's going to happen in 2009?

[Brad Sallows]

I am sure most of us feel sorry, or worried, or concerned, or at least acknowledge the fact that people down the road may have to deal with a problem not of their own making.  There are two questions:
1) Do we feel strongly enough to do something about it - to extinguish the debt (by legitimate means) now.
2) Should we assume those who follow will consent to bear the load, or might they repudiate it?

 

[GAP]

The CPC came the closest to putting a dent in the national debt with 40+ billion in the last 2 years....this recession is no fault of their's, but in order for them to stay in office, they are having to spend way more than they would if they'd had a majority....

I suspect that by 2010 things will be looking up, and they can go back to making more dents in the debt, abiet, smaller ones....

As for paying it down entirely, not in my lifetime....as long as the population has the expectation of the government in power buying their votes with expensive social programs, I see no real headway....

 

[Brad Sallows]

According to the government's own Fiscal Reference Tables for 2008, from 1994-95 through 2005-2006 the Liberals reduced the federal government's accumulated deficit from $487.524 million to $481,499 million - a difference of $6,025 million.  For 2006-07 and 2007-08, the Conservatives reduced it from $481,499 million to $457,637 million - a difference of $23,862 million.  Those are, as some are fond of writing, "simple facts".

That's not very flattering to the Liberals, but of course the details are important: it must be remembered that they did not (in my view, could not) take steps to immediately negate the federal net deficit upon taking office.  Debt charges at that time were consuming 1/3 or more of federal revenues each year.  As I've written: for the deficit to be eliminated, federal revenue growth had to outpace spending and cost of debt growth, and interest rates (debt costs) had to fall.  Whichever party just happened to be in power when the net deficit came within pistol shot of reasonable federal spending cuts could be the one to claim credit for "conquering the deficit".

Last year (07-08) the public debt charge was $33,325 million - roughly the same amount of proposed overspending we face this year (08-09).  That is why I dismiss the Liberals' hagiographers ("the Liberals conquered the deficit!") as fools, liars, and thieves.  It's overwrought, I realize; but I can see what might have been if the arrogant f#cking swabs ("natural governing party of Canada") had used their unassailable parliamentary position prior to the merger of the Alliance and Conservatives to maintain tax levels and pay every f#cking dime to knock down the accumulated deficit.


And, again: I agree that an income tax cut would have been more sensible than a GST cut; I further agree that no cut at all would have been a good idea - if, and only if, the operating surplus was plowed into debt reduction.  But if the politicians have no intention of using today's overtaxation to pay for yesterday's overspending, then just leave my money in my pocket by whatever means of tax reduction.

[Edited: for grammar]