If you had $25.7 billion what would you spend it on?
Our government is planning to spend that amount on servicing our federal debt.
It represents about nine per cent of the government's total revenue, which is a lot of money. It is 18 per cent of the personal income tax that you and I are paying. Yes, one out of every five dollars that you are paying today goes to servicing the federal debt.
It is almost 80 per cent of the money collected from the GST.
It is a lot of money.
Why are we spending this money?
The simple answer is because our federal debt has ballooned to $617 billion. During the past decade, the "fiscally responsible Conservatives" have added $163.4 billion to our debt load.
I put quotes around fiscally responsible Conservatives because there is no way we can really describe the governing party as fiscally responsible. It is the image they would like to project with their Economic Action Plan, but they have managed to increase our collective indebtedness by 36 per cent over the past six years. They have added more to the national debt than any government since Mulroney was in power. He was also a Conservative.
If this is responsible fiscal management, then there is definitely something wrong with the financial system.
No. It is not responsible fiscal management. Rather, it is like the Conservatives are a group of teenagers who have just found daddy's credit card and don't care. They have jacked up the debt and we are paying for it.
Just think - if they hadn't added $163.4 billion, our debt servicing charges would be $9.3 billion lower. That $9.3 billion could be spent on any number of initiatives, including a universal childcare program or better funding for schools.
It could have been spent on social programs, a reduction in EI premiums or even a two per cent decrease in the dreaded GST.
Let's face it. $9.3 billion is also a lot of money.
Indeed, I am not sure what I would do if given that money. But I certainly wouldn't have put myself in a position where all I could do with it was pay off the interest on the credit cards because, in the end, that is what debt servicing charges are all about.
Debt servicing charges don't pay off any of the $617 billion in capital. They simply pay off the interest. The $25.7 billion we are forking over doesn't retire any of the debt itself.
In household finances, no one looks at their credit card bill and says "Hey, we are paying off the bare minimum. We are doing a great job."
People lose sleep over not being able to handle debt. Unpaid balances are a burden on the family cheque book.
Not the government. When asked about the burden that we are placing on future generations, Finance Minister Joe Oliver seemed to think it isn't a big deal.
When asked by a CBC reporter if the Conservative Economic Action Plan would saddle future governments with a revenue shortfall in the billions of dollars, Oliver replied, "I heard that by 2080 we may have a problem. Well, why don't we leave that to Prime Minister Stephen Harper's granddaughter to solve that problem."
Really? Let's leave it to our grandchildren? That is the answer the Minister of Finance wants to give?
Strangely enough, when the Liberals were running up the debt in the 1990s, it was all anyone could talk about. Our national debt was crippling the economy, we were told. If we didn't get debt under control, we would lose everything.
But for the past few years, the federal debt seems to have vanished from our collective vision. It has ballooned to absurd levels. And debt servicing costs are once again one of the largest chunks of federal spending.
This government seems to think leaving it to our children to handle is acceptable.
Indeed, next year, they are predicting a small surplus which is good news. They could start paying down the debt. But underlying this is the money they are not collecting. The budget has a number of initiatives designed to woo voters with tax breaks and benefits.
If the Conservatives really intended to be fiscally responsible, they wouldn't be handing out freebies but would be collecting the money and then applying it against the federal debt. After all, it spending money on items you don't need when you are carrying a massive debt is not fiscally intelligent.
It is the road to ruin as many Canadian taxpayers have unfortunately found out.
Our debt servicing charges are $25.7 billion next year. Maybe it is time for our government to start focusing its attention on eliminating the debt and freeing up this money for the things that really do matter.
