Reading and hearing about what is going on with Alberta's economy now that oil prices have plummeted and look like they could stay low for a while, it is hard not to be a little smug.
Given that Albertan's have argued ad nauseum that their self-reliant, free enterprise beliefs are far superior to liberal or socialist economic policies, it will be a great learning experience for us all to see how they get through this crisis without relying on handouts from the rest of Canada.
This is an excellent opportunity for free marketeers to demonstrate how to handle a major downturn in the economy without resorting to public sector intervention - that is to say, none of that Keynesian hocus-pocus.
The Harper government is straining to meet its promise of a balanced budget because of plunging oil prices and the Alberta government is talking about a $7 billion revenue shortfall.
Presumably Alberta can use its Heritage Fund to bail itself out so there is no cause for alarm.
Alternatively, Alberta could take out a private sector loan and introduce a major austerity program like the ones imposed on Portugal, Ireland, Greece and Spain.
Meanwhile the rest of us should be carefully considering what to do with the savings at the pump. Some estimates suggest Canadians are saving $1200 to $1500 a year (if this continues that long) and some economists are saying Canadians should spend this money in order to offset the GDP shortfall caused by low oil prices.
However, it has been widely reported that Canadians have excessive consumer debt and that they are not saving enough for retirement. Therefore it would be prudent for Canadians to take any extra cash they have and pay down debt or put it in RRSPs.
These extra billions in the hands of the banks would enable them to make the necessary loans to bail Alberta out.
Roy Olsen
Prince George
