Governments going into debt for a city hall, fire department or an arena, is a planned budget item and is paid for over a number of year.
A deficit is a different animal. Deficits result from poor budget planning. Simple example the estimate or forecast on a program is one thousand dollars and it turns out to be ten thousand dollars way more.
Deficit is really borrowing money for our grand kids to pay back. Servicing the interest on deficit spending means it is more difficult to provide needed money for essential programs,
deficits increase interest rates for future borrowing for essentials because it can effect a jurisdictions credit rating.
Surprising to me when I began seeking elementary figures for this article and I sourced more than one, is this. If we balance borrowing with a ratio to the GDP or gross nation product the left actually fairs better over all. Now I am not saying every jurisdiction that is the case.
Here are some amazing examples first at the provincial level. Alberta did very well when oil was king that was the ideal scenario. Lately Alberta has had to borrow to s survive. There was a myth the NDP had a structural deficit of five billion which later proved wrong. The biggest deficit in BC was actually the government of Gordon Campbell at two billion dollars.
If you look at Saskatchewan it tells a real story Tommy Douglas and his government produced 17 balanced budgets in a row in seventeen years of governance. Allen Blakeney had 12 balanced budgets in a row. While Grant Divine’s Conservative Government produced a debt and deficit of over twenty billion in nine years.
Federally we have had two governing parties in one hundred and fifty years. I am not going to mention the present government that deficit mounts by the hour. However if we go back the mid sixties we see an increasing trend of accepting the shortfall as normal.
Lester Pearson Joe Clark Pierre Trudeau Brian Mulroney Steven Harper
18 billion 77 billion 157.2 billion 490 billion 541.9 billon
These are merely examples of a trend both parties have deficits but look where it started small. When we stampede to the polls to vote for the most efficient numbers like these attached to party labels leads us to question the sanity of them all. The truth is the reason for this is the interest mounting eating into the principle value of programs.
In BC we have had governments that were less prudent than others and some in both parties that are better than others. We also have to remember governance is an ongoing social experiment as much as it is a financial one. The question we face together, over and above party preference what are we going to do to stop the spiral? How do we address the principal well Tommy Douglas balanced his budgets and paid ten percent a year on previous debt
So where to we go from here? If we quit blaming the other guys, balance the budgets, eliminate deficits and pay ten percent a year on previous debt sometime in the next century and a half we have a chance to find a balance.
by Fred Steele