Balanced budgets and deficits continued to be a topic of discussion on the campaign yesterday, and it will continue to be so today as Justin Trudeau is set to unveil his infrastructure plan to boost the economy, which seems set to include some deficit financing for another year or two as the economy appears stagnant. Stephen Harper warns the other parties are looking at “permanent deficits,” but it bears reminding that according to the previous Parliamentary Budget Officer, the only way that Harper killed off is own structural deficit was in changing the health transfer escalator, leaving him with only a cyclical deficit (which persists, no matter how much they shuffle money around on paper to cover over it). The NDP continue to insist they won’t run a deficit, but they also seem to dispute that they would need to continue austerity and they would even do things like restore the health transfer escalator, which starts to boggle the mind. The Liberals seem to be looking to score points for honesty in that a) they don’t know the true state of the books, and b) the global economic situation, but one might also add that our debt-to-GDP ratio is in a good place now (as opposed to the eighties and nineties), so small deficits won’t affect our economic health that much. To that end, Mike Moffatt says it’s important to ask parties how they would manage deficits, because they are inevitable in the current economic climate, while Andrew Coyne says that we should be paying attention to the signals being sent by the leaders when it comes to deficits.
https://twitter.com/mikepmoffatt/status/636646713005076480
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