Opinion

Furey

Canada needs a debt ceiling

By Anthony Furey, Postmedia Network

The U.S. Capitol dome is pictured in Washington, D.C., on October 1, 2013 during the first day of the federal government shutdown. AFP Photo/Jewel Samad

The U.S. Capitol dome is pictured in Washington, D.C., on October 1, 2013 during the first day of the federal government shutdown. AFP Photo/Jewel Samad

No person can live beyond their means for long without having to confront the harsh implications of such a lifestyle.

Families know this. Small business owners know this.

But, for some reason, governments don’t get it. Especially not the larger ones.

As political satirist P.J. O’Rourke wisely wrote, “beyond a certain point complexity is fraud.”

That’s what’s going on right now with the United States government shutdown — legislators are stick-handling a complexity that no one actually understands.

The direct impetus of the shutdown that began Monday night was approving the spending behind Obamacare. In bill form, the law was more than 2,000 pages long.

Whatever your thoughts on health care, how is this bill not fraud in the O’Rourkian sense?

This is all a lead up to the Oct. 17 deadline to raise the debt ceiling. America will default if the increase isn’t authorized. This is a much bigger deal than a shutdown.

But here’s the truth you’re not being told. Raising the debt ceiling isn’t the only option. As anyone who calculates the family budget will tell you, not accumulating so much debt is the other one. And it’s the only solution sustainable over the long run.

The U.S. debt is set to hit its current $16.7-trillion limit. That’s around 75% of GDP, according to the Congressional Budget Office.

It’s projected to hit 100% in 25 years. The only time it exceeded 100% in the past was during the Second World War, which was a time of exceptional national danger.

But now the growth of entitlement spending has made such shocking figures the new norm. Free rides aren’t so free.

“Our national debt is our biggest national security threat,” Admiral Mike Mullen said in 2011 when he was chairman of the Joint Chiefs of Staff.

These statistics aren’t included in most stories on the debt ceiling written by major news outlets and wire services. Why? Well, because if the numbers were constantly quoted, people would memorize them. Then they’d start to understand just how bad they are.

The left-leaning media doesn’t like to show off these startling figures. Their stories are more about painting the Republicans as “extreme,” without delving into the issue.

But look at it from the politicians’ perspective. What if the sole reason a politician tossed her hat in the ring was to promote fiscal restraint?

Maybe some politicians are perfectly content to let their colleagues in Congress and the president get on with their lawmaking with one simple caveat: They’ve decided their government is too indebted. They ran on it. They were elected on it. They’ve made it quite clear that’s what they stand for.

Then they’re told to compromise on the one thing they came to office to actually fight for.

Perhaps they don’t want to meet halfway because they believe even half of the proposed spending obligations are still reckless. Perhaps they even want a reduction.

This is the position many Tea Party-affiliated politicians are in right now. They’re vilified for taking a stand against long-term intergenerational debt, even though it’s the moral high road.

But enough about them. What about us? Does Canada have a debt-ceiling limit?

Not really. MPs pass budget implementation bills that authorize spending. Invariably that spending goes up. Last year we crossed the $600-billion debt mark for the first time. It was around $475 billion when Stephen Harper was elected prime minister.

The Canadian Taxpayer Federation’s debt clock pegs current federal debt at $617 billion. Your share? $17,600.

Because of our structure of government, adding to our debt can happen almost as an afterthought.

Down south, President Barack Obama has to get funding authorized outside of the White House, by Congress. It’s one of their patented checks and balances.

But the Canadian prime minister just has to get his House of Commons colleagues to vote for the budget. In a majority, this is a breeze. Only in a minority, where challenging the budget brings the threat of an election, is there the opportunity for the opposition to make it a big deal.

The NDP and Liberals can’t be trusted to bring up this issue while in opposition. They’re more concerned about crying foul that the government isn’t growing and spending more.

That’s why we need mechanisms in place to even make sure Canadians know we’re spending more of their money and putting them further in debt.

The options include legislating a national referendum on raising the debt. This would be like the Alberta Taxpayer Protection Act that Ralph Klein introduced in 1995. The Act requires a provincial referendum to approve the creation of a provincial sales tax. So much for massive sweeping taxes to enable spending by the likes of Alberta Premier Alison Redford.

We can also simply legislate a set budget level, requiring a repeal or an amendment to exceed the figure. MP Maxime Bernier’s riding of Beauce has proposed balanced budget legislation as a policy discussion for the upcoming Conservative convention.

Canada needs to seriously explore such options. These sorts of levers would force political spendaholics to learn what average Canadian families have always known.

It’s a sad sign of the decline of Western nations that even having these conversations is taboo to many people.

 


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