The lies never end from this government
The Trudeau government has been rapidly blowing through every fiscal marker they set. The promise of small deficits for three years has turned into massive deficits for as far as the eye can see.
Now, the Financial Post is reporting that the Liberals are set to break even their easiest to keep fiscal pledge: Reducing the debt to GDP ratio.
The debt to GDP ratio represents how much debt a nation has relative to the overall size of their economy. The debt-to-GDP ratio is a decent measure to use, since it reflects the growth in population and productivity that can increase the size of an economy.
For example, if the Canadian economy grows by 3% in a year, and our debt grows by 1%, our debt-to-GDP ratio will improve. A larger economy can handle some more debt.
This was the Liberals backup promise. Soon after they decided to run large budget deficits, they announced that their real goal was to lower the debt-to-GDP ratio every year.
It should have been an easy pledge to keep.
They broke it.
The proof of the Liberals broken promise is found in their own budget.
As noted in the FP, the 2014/2015 debt-to-GDP ratio under Stephen Harper was 30.9%. However, the Liberals recent budget projects a debt-to-GDP ratio of 31.5% in 2019/2020.
It is also noted that the real numbers could be much worse, since the projected 2019/2020 ratio is based upon some “optimistic” predictions about growth and spending.
If those sunny ways to grow the economy from the heart out don’t work, Canada could be in even worse trouble. That’s why the Liberals numbers don’t quite add up.
In fact, even as they assume a higher debt-to-GDP ration, the Liberals are predicting they will reduce spending per-person when adjusted for inflation – though the government does not explain how they would do that, and they have never done that so far in office.
A mountain of debt thanks to Justin Trudeau
According to the FP, the Trudeau Liberals may rack up an additional $122 billion in debt over current projections, bringing our debt-to-GDP ratio to 33.0%.
This puts Canada at greater risk of economic crisis, as we have less room to respond to any shock. With Canadian consumers already facing a heavy debt burden, the Liberals are blowing through money with a recklessness that should disturb us all.
It’s not just about spending money, it’s about how. Remember, while they didn’t get everything right, the Harper government put together a stimulus program that temporarily increased deficits and increased the debt, but also got money into the economy quickly, strengthening infrastructure and jobs while preventing an economic collapse. And that was during a global financial crisis that came close to a full-blown great depression. And, Harper’s stimulus program didn’t raise taxes.
By contrast, Justin Trudeau inherited a balanced budget and a stable – if slow – global economy. He has since proceeded to run massive deficits, while failing to put much tangible infrastructure in place or create good jobs. Instead, the government is simply making itself bigger, increasing taxes, and failing to stimulate the economy.
And now, we have learned that their last real fiscal promise – the debt-to-GDP ratio – is being broken too.
Unfortunately, all Canadians – especially future generations – will pay the financial price for Trudeau’s incompetence and recklessness.