It’s plain this cannot continue forever. The only remaining question is how long the charade lasts?
John Maynard Keynes famously remarked markets could remain irrational longer than you can remain solvent; an acknowledging that timing is a crapshoot in the financial world.
But, when the game’s eventually up, the fall from grace is guaranteed to be rapid and monumental: akin to Wile E. Coyote finally realizing he’s run over the cliff edge and gravity’s about to re-assert itself, no matter how hard his legs peddle.
Unfortunately, our looming descent will be no laughing matter: this isn’t some Warner Bros. cartoon, after all. No, the fall for many Canadians will be long and painful. But it’s inevitable; given the house of financial cards our country has built for itself.
Such dire straits are mainly due to our federal government’s relentless and unprecedented crusade of spending obscene amounts of money we don’t actually have. To manage this feat the Trudeau regime simply keeps borrowing more and more of the needed moolah, so we now owe more than $1.2-trillion. For heaven’s sake, don’t try to count that high. Math geeks estimate it’d take more than thirty thousand years.
For naïve souls imagining the fire hose of fiscal excess would finally be wound-up following those three years of COVID-spending shenanigans - where copious cash was sprayed willy-nilly to every nook and cranny of Canada – a rude awakening arrived with the Grit’s latest budgetary horror show.
Finance Minister Chrystia Freeland – merrily playing Robin to the profligate Batman that’s our prime minister – announced we’d spend a further 40-billion bucks more than we take in during the fiscal year beginning, appropriately enough, April 1.
In part this was to placate the Joker of Canadian politics, NDP leader Jagmeet Singh, who demanded and therefore got a new universal dental plan included in the budget, as part of his continued parliamentary support for the Liberal minority government.
Of course, once introduced such a scheme will be with us forever. Come on: which future politician would dare axe a program fixing people’s teeth? Not one with any hope of re-election, that’s for sure.
Yet it would be wrong to place all the blame for such reckless spending solely at the feet of the current crop in power. They have a willing and capable accomplice in this fiscal chicanery. That being Canadians ourselves. Hey, few of us turn down a check from the government.
But what came first?
Did our relentless push to have government solve every issue, no matter how personal or picayune, subsequently drive those practising the political arts into giving us exactly what we most desired? Or did those seeking our vote first come up with these tempting ‘make a wish, any wish’, platforms to thereby ensure election?
Chicken or egg, the result’s the same: we’re merrily jettisoning the country’s future by indulging in a lifestyle today that we refuse to pay for. Let those who come later pay that tab.
We’ll hit a wall, of course. In our bones we know this.
Yes, there will come a time when the world won’t let us borrow at today’s relatively low rates. Then the yield necessary to make Canadian bonds attractive will edge up.
And when you owe way more than a trillion dollars that’s no laughing matter. It has severe consequences, one of which is a massive and unavoidable reduction in government spending.
But by then Trudeau and Freeland will be long gone, insulated by inflation-linked pensions and trusty trust funds.
Meanwhile, the rest of us can try peddling our feet to stay afloat. Yep, just like Wile E. Coyote.
Chris Nelson is a syndicated columnist.
