The Ontario government, in its most recent budget, warned of deficits for the next 10 years. So what? Why are we still talking about deficits? Granted, it’s a pervasive myth, as myths go, but it’s high time for concepts like government deficits (or GDP, for that matter) to be retired for something more meaningful.
The first mistake is to assume that an economically sovereign country’s budget (i.e. Canada, or the US) is anything like your personal household budget. It’s not. The “national debt” is just a measure, over time, of how much money the government put into the economy (health care, infrastructure, etc.) vs how much it took in through means like taxation. The money that our government spends is money that it issues. Seriously. It’s just numbers in a computer. The country does not need to borrow from China, or the World Bank and they don’t need to tax us further to finance their spending. The country does, in fact, create that money out of thin air.
Here’s the thing . . . Our country cannot run out of money. There are no bills coming due. Ever. Unlike you and me. Canada will never go bankrupt because some other power calls in our bills. The country will NEVER have to pay back this so-called debt.
Ask yourself . . . Why is there always money to bail out big corporations? Why is there always money to fund a war? To be clear, I’m talking about modern times here, not back in the day when you actually needed the resources and raw materials to fight said war and these were finite physical resources. Where do you think, in times like the 2008 fiscal crisis, or this last year, that the government got this money. They credited the whole thing on a computer to the appropriate areas of need.
At this point, people wanting to argue that this is all nonsense will often point to Greece. After all, didn’t Greece need to tighten its belt to downright inhumane levels in order to pay down its debt?
Ah, yes . . . Greece. Unfortunately, Greece does not, in fact, have control over its own currency. When it needs money for social programs, it needs to go cap in hand to the issuer of its shared currency and justify why its citizens shouldn’t have to suffer. Canada, and all economically sovereign nations, do not have that problem.
If we don’t open the purse strings to help, meaning that we run a deficit (a good thing), then it’s done, not for national economic reasons, but for the benefit of the already rich and powerful or to fulfill some other agenda. Government’s job is not to save money. Government’s job is to “print” and spend money to maintain and foster the health, safety, education, and overall well-being of its people. A government that isn’t spending is a government that is failing its people.