Turns out the budget still isn’t “balancing itself.”
In the 2015 federal election campaign, the Liberals said they would run “small” deficits for three years, before returning to a balanced budget.
That promise was broken almost immediately, with the deficits far exceeding what the Liberals had promised, and with no plan whatsoever to return to balance.
Then, the Liberals responded to the covid-19 pandemic by pushing for draconian lockdowns, while extending support programs long-beyond the initial crisis.
The result was the largest budget deficit in Canadian history, and long-term projections of red ink as far as the eye can see.
Such rampant overspending and increases in debt led to projections that the Liberals wouldn’t balance the budget until 2070.
But now, the federal government says the budget will be balanced by 2041.
Here’s the problem.
That’s based on a complete fantasy scenario.
As the Canadian Taxpayers Federation explained, for the Liberals to balance the budget in 2041 a completely improbable series of events would have to unfold:
“The supplementary data for this year’s PBO report shows the feds won’t balance the budget until 2041 based on the trajectory of Budget 2022. Debt interest charges will have cost taxpayers $802 billion by the time the government balances the budget.
The federal government needs the following conditions to materialize to balance the budget by 2041:
-
-
Uninterrupted nominal GDP growth of four per cent per year and steady real GDP growth of two per cent per year;
-
Average annual interest rate of 2.5 per cent, which is lower than interest rates were any year between 1991 and 2015. The current effective interest rate charged on the government’s debt is 1.7 per cent. But, the Bank of Canada just issued the largest one-time interest rate hike since August 1998, putting Canada’s benchmark borrowing rate at 2.5 per cent; and,
-
No new spending announcements beyond what is included in Budget 2022.”
-
With the economy in a moribund state and growth almost certainly heading much lower into a possible recession, interest rates rising, and the Liberals showing no sign of ending their spending binge, the scenario for balancing the budget in 2041 is already falling apart.
Sacrificing the future
By running up the debt so dramatically, the Liberals are sacrificing the future, with no regard for the damage being done to those who will have to pay the price.
But even that is being too generous, since what the Liberals are doing is far worse than casual disregard for the future.
They are deliberately wrecking the economy, drowning our nation in debt and printed money, crushing our most vibrant and important economic sectors, and blanketing the nation in a guilt-based, victim mindset that is inimical to growth and innovation.
That is why they can’t be trusted on anything, especially not when it comes to any sort of fiscal responsibility.
Spencer Fernando
Photo – YouTube
***
I am funded by Canadians like you, not the Trudeau government. If you support my writing, you can make a contribution through PayPal, or directly through Stripe below.
[simpay id=”28904″]
