Blessed are Canada's young, for they shall inherit the national debt

Blessed are Canada's young, for they shall inherit the national debt

Most provinces have combined government debt burdens that exceed the size of their entire economies

After decades of balanced budgets, British Columbia's indebtedness has increased sharply over the last four years and now threatens its credit rating. Writer Paul Forseth points out that BC is not alone: Citing a Fraser Institute study, he points out that combined federal and provincial government debt in seven provinces has surpassed the value of all goods and services produced in those provinces — a dangerous development. Above, in a stunt earlier this year, Carson Binda, B.C. director for the Canadian Taxpayers Federation, parks the CTF's Debt Clock truck outside Premier David Eby's Vancouver-Point Grey constituency office to drive home the point.  Canadian Taxpayers Federation

 

The combined federal and provincial government debt in seven provinces has surpassed the value of all goods and services produced in those provinces. As revealed by a new study published by the Fraser Institute, this not only impairs economic growth but also directly impacts our daily lives and living standards.

Author Jason Childs says, “When government debt grows so high that it is larger than the entire value of the economy, not only does additional debt offer no benefit to growth, living standards stagnate.”

The study found that when government debt is above 100% of the Gross Domestic Product, further debt does not help to grow the economy. Justin Trudeau's frequently used phrase, "We are investing in Canadians," is an excuse that no longer covers wasteful mismanagement and massive deficit spending.

In fact, high levels of government debt crowd out private investment, which means that the government's borrowing reduces the amount of funds available for private investment. This, in turn, raises interest rates and drives inflation, which reduces economic growth and the standard of living for everyone.

Only British Columbia, Saskatchewan, and Alberta had combined federal and provincial government debt levels below 100%. However, there is great concern about BC's recent downward financial spiral. The Fraser Institute reports also notes that "Manitoba had the highest combined debt-to-GDP level, at 141.4%, followed closely by Quebec, at 141.3%."

We must understand the impact of enormous government debt burdens on our living standards. Policymakers must prioritize balancing their budgets and paying down debt, as this is the key to spurring more significant economic growth for the benefit of all Canadians. In contrast, deficit economics is a dream killer in the current economic cycle.

Finally, given the direct relationship between public debt and economic growth reflected in the unemployment rate, interest rates, and the cost of living, the additional debt accrued by governments has led to slow growth.

Canada has significantly fallen behind the development of even the poorest states in the USA. Deficits and accumulated debt make the burden more costly for governments and hinder the ability to provide healthcare, public safety, pensions, and the many services Canadians expect. The habit of borrowing more just to pay the interest on the money borrowed last year has consequences.

The wise and rational way forward is at the ballot box. Canadians must protect themselves from the financial miscreants.