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| We used to talk billions in fiscal policy. Now, increasingly, we talk trillions. PHOTO BY GETTY IMAGES/ISTOCKPHOTO |
Will Ottawa borrowing $100 million more produce more benefits than leaving the money with Canadians to spend?
A trillion. Or, if you like, a thousand billion. Or, the one I find most impressive, a million million. President Joe Biden’s proposed COVID package is US$1.9 trillion , though the Wall Street Journal argues only a measly US$825 billion is even remotely related to COVID, the rest being progressive visioning made flesh.
Canada’s federal debt now exceeds $1 trillion, though only in Canadian dollars. If you want to watch it grow, the Canadian Taxpayers Federation has a real-time debt clock. Only 100 years ago, not a million, federal budgets listed expenditures down to the penny . Now, entries as far out as the millions of dollars probably aren’t significant digits.
When I was a kid there was a non-reality TV show called «The Millionaire.» A lawyer went around delivering $1-million cheques from a never-seen eccentric who wanted to learn how instant wealth affected people’s lives. If you were in a receiving line, like a prime minister or governor general, and you took 10 seconds shaking the hand of every person you met, greeting a million people would take you almost four months, working 24/7. A thousand times that, or 317,098 years. America’s GDP is US$21.2 trillion, so Joe Biden’s US$1.9 trillion is just under nine per cent of that.
GDP fell 31.4 per cent in the second quarter of last year, which was unprecedented. But in the third quarter it rose 33.4 per cent, which is also unprecedented. Given the collapse, the rebound was from a smaller base, but how much of a shortfall remains and how much of the US$1.9 trillion will fill the gap rather than simply shuffle the money around from less- to more-favoured groups aren’t easy questions to answer. As for our own fiscal mega-bucks, the federal Liberals propose borrowing up to $100 billion more to spend on building back politically correctly.
One hundred billion dollars divided by 38.1 million is $2,624.67 for every man-, woman- and child-identified Canadian. For the proverbial, and now probably also mythical, family of four, that’s more than $10,000. What Canadians need to ponder is whether Ottawa borrowing another $2,600 per person, or $10,000 per family, adding to the more than $26,000 per person and $100,000 per family it has already borrowed on our behalf, will produce more benefits than leaving the money with Canadians to spend or not according to their own likes. Yes, $100 billion of infrastructure spending would put money in the pockets of civil engineers and construction workers.
We learned this week that a single ship Ottawa has been trying to build since 2008 is still on the drawing board and will end up costing at least $1 billion.
Source: William Watson | Financial Post
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