PBO Report Provides Further Evidence Of How Dangerous The Debt-Binging Liberal Budget Is To Canada’s Future

A staggering amount of spending, for shockingly little in return.

If someone gave you $69.2 billion, how many jobs could you create?

A million?

Two million?

At least many hundreds of thousands, right?

Well, the Parliamentary Budget Officer has revealed how many new jobs the $69.2 billion Liberal government stimulus is expected to create in 2021:

74,000.

That’s it.

Consider for a moment that Canada spends roughly $20 billion annually on our military, with somewhere around 100,000 total personnel.

Further, the military is in dire straits, and has struggled to recruit and keep people.

Imagine spending over 3 times as much money, all to create fewer jobs.

It’s incompetence and inefficiency at a brutal scale.

Here’s what the PBO said in the main quote about the budget:

“Based on our projection of the Government’s fiscal guardrails, almost all of the ground lost in the labour market due to the pandemic will be made up by the end of 2021-22. We maintain our judgement that stimulus spending in Budget 2021 could be mis-calibrated if the focus is solely on returning to pre-pandemic benchmarks.

The Government has decided to effectively stabilize the federal debt ratio at a higher level, potentially exhausting its fiscal room over the medium- and long-term. This means that any substantial new permanent spending would either lead to a higher debt-to-GDP ratio or have to be financed through higher revenues and/or spending reductions in other areas.”

Damaging the country

Lets go through those points one-by-one:

First, as mentioned above, there is the staggering inefficiency of all this spending.

The Liberals are spending $935,000 per job.

That’s right.

Nearly $1 million of taxpayer dollars per new job generated, according to PBO predictions.

Horrendous.

Think of how many jobs you could create with $935,000 alone.

At least 10.

Maybe 20.

But just 1?

It’s simply appalling.

Overstating the impact

Then there’s the PBO noting that the budget estimates ‘overstate the impact’ of stimulus spending.

What a shock, the Liberals inflating estimates of what their spending will achieve…

Who could have possibly seen that coming?

And 1% of extra GDP for $69.2 billion in spending?

According to the Canadian Institute for Health Information, Canada spent $265.5 billion on healthcare in 2019, which they estimated at 11.5% of Canada’s GDP. At that rate, shouldn’t $69.2 billion in spending do more than a 1% GDP increase?

Of course, the reason the impact is so low is that it’s simply not needed. It’s pumping a bunch of printed money into the economy for the sole sake of spending the money, meaning there’s more money chasing the same supply of goods – which leads to inflation, not real growth.

Rising debt burden

The PBO notes that “The Government has decided to effectively stabilize the federal debt ratio at a higher level, potentially exhausting its fiscal room over the medium- and long-term.”

That’s a nice way of saying the Liberals are locking in a much higher debt burden, and leaving Canada out of financial resources to respond to a future crisis.

Remember, for all the claims of following ‘Keynesian’ economics by utilizing government stimulus, Keynes advocated for governments to run surpluses in good times, and deficits in bad times. Instead, governments have been running deficits all the time, trying to print money to make up for the shortfall – which of course debases the currency, hits people with the ‘Inflation Tax,’ and destabilizes the economy.

Now, the Liberals are taking that approach and putting it on steroids, unleashing rampant deficits and going on a debt binge that will have dire consequences.

While the fools in the Liberal government must think they can just print their way out of future money troubles, inflation and currency devaluation renders that approach disastrous.

At some point, people simply lose confidence in a currency, and this is already happening as inflation rises and more and more people seek reliable stores of value in cryptocurrencies.

After all, if you could just endlessly accumulate debt and print your way out of trouble, then no country would have ever defaulted or suffered a currency collapse. Obviously, that’s not how it works.

Tax hikes and or spending cuts

Unlike the Freeland & Trudeau budget, the PBO is operating in the realm of reality.

If you rapidly hike up debt levels, you will either need to raise taxes or cut spending to pay for it.

Considering that the government is already quite bloated, and given that the rising cost of living is making life less and less affordable for Canadians, government spending cuts, rather than tax hikes, are the way to go.

But so far, few are willing to acknowledge this reality.

Even the Conservatives – aside from some exceptions like Pierre Poilievre – are planning to run another decade of deficits, showing no appetite for fiscal restraint or difficult decisions.

We know how this ends

Despite the fools claiming ‘this time it’s different’ because of ‘new’ ideas like ‘modern monetary theory,’ the fact is we’ve seen over and over again throughout history what happens when governments try to spend money they don’t have and then print money to make up for it.

You can trick people for a while, but sooner or later they catch on.

People who are glad for ‘all the stimulus’ and government money, will soon start wondering why – despite technically having more in their bank account – it doesn’t seem to be going as far.

“Why doesn’t $200 buy as many groceries as before?”

“Why do I feel poorer despite getting a raise?”

“When did everything get so expensive.”

More and more, the value of our money erodes, savings are discouraged, and the economy is distorted.

Government statistics and claims will increasingly diverge with the reality on the ground, until a critical mass of people no longer trust the government, no longer trust the Bank of Canada, and no longer trust in Canada’s currency.

This can only be avoided through fiscal responsibility, a reduction in government spending, an end to the artificial suppression of interest rates, and a halt on out-of-control Bank of Canada money printing.

To think otherwise would be to deny reality.

Spencer Fernando

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