A Painless Way Out?
What happens to a citizen when their debts exceed their ability to pay?
Generally, we see them start off by missing payments. Then they may start borrowing from Peter to pay Paul. Then, as their lenders begin to worry about the escalating debt, the lenders start to crack down on the debtor . . . turn off this . . . reject further credit on that . . . repossess this . . . legal action on that. In short, wiggle room gets less and less as the mountain of debt begins to overwhelm the debtor.
What happens when a country’s debt exceeds their ability to repay?
We watched that happen to Greece a few years ago. Their debt to the European Union grew until it began to overwhelm Greece. Then, for a bit more credit, they were required to implement austerity measures. “Unemployment rose to 25%, while youth unemployment hit 50%. Rioting broke out in the streets. The political system was in upheaval as voters turned to anyone who promised a painless way out.”
Please note that Greeks were looking for a painless way out . . . not an effective way out. They gave up their sovereignty for a time because they were not willing to set their own fiscal house in order. Is that what we want for Canada? Are we willing to give up our sovereignty (even temporarily)? No! Canada’s future and finances should be left to our children and grandchildren in a better condition than we found them, not in a state of fiscal and moral bankruptcy.
Fiscally responsible adults know that when times are good, you save. When times are bad, you cut back and sometimes need to borrow to make it through. Unfortunately, there is a major shortage of “fiscally responsible adults” in Canada’s Parliament today, and the Prime Minister exemplifies the irresponsible majority.
For too long, Canada has been looking for and taking the “painless way out.” We’ve borrowed and borrowed. This year, Canada’s combined government debt (federal debt combined with the provincial debt of all 10 provinces) is expected to pass 2 trillion dollars.
“In 2019/20, Canada’s projected combined government debt . . . will equal 64.3 per cent of the Canadian economy. On a per person basis the combined debt is equal to $39,483 for every Canadian.”
That brand new baby born in your family is starting out with almost a $40,000 debt on its head. But more than that, that child will never see the debt that we’ve incurred repaid, nor will his children or their children if we seek a painless way out . . . sadly, that is what many seem to want!
But we’re not done yet. While it took until 2008 to incur our first trillion dollars of debt, expectations are it will have taken 13 years to rack up the second trillion.
“The Growing Debt Burden for Canadians: 2021 Edition is a new study that finds combined federal and provincial government debt in Canada has doubled from $1.0 trillion in 2007/08 to a projected $2.0 trillion this year. And the combined debt now equals 91.6 per cent of the Canadian economy—up from 65.2 per cent last year.” Can you imagine Canada’s combined government debt being almost equal to our annual output?
In June, Canada’s long term debt rating was downgraded from AAA to AA+. This will be reflected in higher borrowing costs. But perhaps harder to deal with is the loss of Canada’s small business sector. The Canadian Federation of Independent Business estimates that 181,000 small businesses are seriously considering permanent closure since the COVID lockdowns. This comes on top of the 58,000 small businesses that went under last year and would impact about 3 million jobs. According to the federal government, in 2017, 8.3 million Canadians were employed by small businesses. That means that 1/3 of our small business work force will likely be gone this year.
We can see a looming problem when we consider the implications of this huge increase in the cost of unemployment: the huge revenue loss in the taxes no longer collected, both income tax and GST. Our Trust Fund Prime Minister assured us years ago that “The budget will balance itself,” which anyone with moderate financial acumen discounted. Instead, we have been left with a very ‘challenged’ economy.
What solution has our Prime Minister presented to resolve the financial challenges we are facing? The last budget was presented to the House of Commons in March of 2019. We could try to avoid having budgets, as they stubbornly refuse to balance themselves. But hiding our heads in the sand will obviously not solve our financial woes.
If we hope to ever get our fiscal house in order, we will have to tighten our spending, as most responsible Canadian families would do if they ran short of money. But our government does not want to tighten its spending. Instead, it is trying to increase its revenues; during this pandemic, our Prime Minister, who claims to understand our financial troubles so well, has saddled us with a new Carbon Tax!
Canada is facing a choice between voluntary austerity and self-government, or forced austerity and a loss of sovereignty. Neither is a painless way forward. But responsible self-government will be better for us than outside “help” with the strings that will be attached. Canada should be governed by Canadians, not the money-lending institutions that Canada is already so indebted to. An obvious lesson our PM has not yet learned is that “you can’t borrow your way out of debt.”
There have been related concerns presented by some Parliamentarians over the “Great Reset.” In these troubled times, it is easier than ever for international groups such as the World Economic Forum to push their pet agendas on Canada to the detriment of Canadians. Whether or not “The Great Reset” will usher in policies and regulations that would put our personal finances under the control of our government or international bankers, there is no doubt that we are in a delicate position. Our fragile economic condition is sucking us into an increasingly massive debt, and our natural desire for the ‘good life—now’ is seducing us to leave more debt on the backs of future generations.
This is not the time to sleep through our economics classes. It’s time for us to sit up and take notice that we are stealing the future of our own children . . . crushing them under our massive debt load. It will take Canadians pulling together, willingly working to rebuild without government largesse to get us through this problem. It will mean taking the right way forward, not the seemingly painless one—which is simply taking money from future generations to finance the follies of this generation.
The Christian Heritage Party is the only political party in Canada with the moxie to give the tough news to Canadians. Join today! Your future, my future, and your children’s future depend on what you decide to do.
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Other Commentary by Vicki Gunn:
- A Painless Way Out?
- Pro-Lifers Need NOT Apply
- Lest We Forget the Price of Peace
- Is Systemic Discrimination a Problem in Canada?
- Laws Are for the Little People
- 2020: What a Year It Is!
- By Fair Means or Foul, You Lose!
- Shall We Surrender??
- The Earth, 5G, and Me
- Huawei, Ericsson, or My Rotary Phone?
- Public Enemy #1