Gary North in the Tea Party Economist  recently wrote:

This confirms economist Herbert Stein’s law: “When things can’t go on, they have a tendency to stop.” A year ago, the experts denied that anything was wrong. Yes, there were “problems,” but nothing that could not be fixed. “Bankruptcy? Are you serious? Of course not. There is no possibility of that. Such talk is inflammatory. Perish the thought.” That’s what politicians always say . . . right up to the end.

I would suppose that in defence of the politicians, if there was any thread of hope remaining they wouldn’t have wanted it to be negatively impacted by suggesting that bankruptcy was ever a possibility in Detroit. After all, government would rightly want to avert any chaos from erupting so playing down the seriousness of debt and deficit spending may well have been the order of the day.

So are we any different in Canada? Are we being told any different? Should we expect our politicians from either side of the House of Commons to be warning us of impending disasters that could be attributed to government mismanagement past or present? Hmm… probably not.

So Detroit declared bankruptcy. Yes they certainly did! And it is said to be the largest municipal bankruptcy in US history. So, let’s consider some thoughts on this issue.

Could it become commonplace for cities to go bankrupt when taxpayers begin to realize that their obligation to pay the “legacy debt” virtually dissolves and they get to start over practically debt free? You see, bankruptcy can mean that their tax dollars once again can start paying for more police patrol cars and turning on the burnt out traffic lights instead of paying those government pensions, health care costs, and other retirement benefits which may be written off by the bankrupt city. Well, it certainly wouldn’t have the vote of the many pensioners who now have to go back to work nor the 100,000 creditors who will end up getting nickels for their dollars. When jurisdictions declare bankruptcy they actually shift the burden of responsibility by instantaneously sucking the money out of the current generation of pensioners and creditors. And folks that could be you!

What could spoil this embarrassing bonanza for the everyday taxpayer is of course an announcement of another “bailout,” which would mean the debt is passed on to some other taxpayers in some other part of the country. You see, Detroit is already being taxed at its maximum legal limit.

So what has created this mess? It is in fact the delinquent behaviour of past and current governments which have refused to deal with debt and deficit spending. Governments have offered taxpayer-funded bailouts instead of allowing industry to correct itself. It took a span of about 50 years to bring Detroit to its knees, but it happened. So who’s next? Because there will be a next one and a next one… It’s almost like Russian roulette as far as which government politicians will be caught holding the gun when the time comes to “fess up to the mess-up.” After all, who in his right mind would possibly do it now when making those necessary cuts in spending—pensions, salaries, and other costs of personnel—has every possibility of scuttling his hopes of re-election. Perish the thought!

Canada is now over $618 billion in debt (not to mention the provincial and regional/municipal debts that are also piling up) and deficit spending continues to be the government order of the day. “Bankruptcy? Are you serious? Of course not; there is no possibility of that.” So what was that little hint in our government’s recent federal budget on page 144? I spoke of it in my communiqué “Woolly Budget.” The wool they are trying to pull over your eyes is this: instead of having the taxpayer pay for the bail-out due to poor management of the banks and poor decision making by the government, the government is now going to allow the banks (when they run into trouble) to default on what they owe to certain depositors. Mind you, they word it in a fashion which almost sounds legitimate: “…the very rapid conversion of certain bank liabilities into regulatory capital.” Translated, that actually says, “…before you realize what’s happening we are going to confiscate certain people’s deposits (that means your money) and tell the world banks our capital is secure.” So, bail-out, bail-in, or bankruptcy – are you ready for the hit?

The Christian Heritage Party has always described this enormous growing debt as a form of theft, because paying it off is going to be left to our children and grandchildren. But Detroit reveals another ugly truth and probably the more realistic one at that. The current crisis may hit you in your bank account and in the devaluing of your pension. And in the years ahead, your children, like the sorry residents of Detroit, could still face massive unemployment, abandoned properties, and population evacuation on top of unpredictable tax burdens. They could find themselves living in a community (like Detroit) where homicide rates are skyrocketing, two out of three ambulances are out of commission, arson is out of control, and police emergency response time is almost an hour. But “Such talk is inflammatory. Perish the thought.” Sound familiar? We may not be anywhere near the disastrous conditions in Detroit, but when is the best time to turn the ship around, after a painful bankruptcy or before, while we still have choices?

The time for Canadians to confront political deception and deal with government mismanagement is now. The Christian Heritage Party of Canada’s better solutions can be found here.

Support today a political solution that bases their policies on reality not popularity.

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