We all know someone who doesn’t pay attention to ballooning government debt. How can we help them understand the consequences of irresponsible spending?
First, ask your friends to reflect on the old expression – “if something sounds too good to be true, it probably is.” Rising government debt is no different; it ultimately means higher taxes.
Premier Notley is currently on pace to take our province’s debt from about $12 billion (when she started as premier) to $53 billion in just four years. Her government is increasing the province’s debt by a staggering $344 every second.
What’s the consequence of all that new debt? Well, just like if you quadrupled your credit card debt, the government’s minimum interest payments have also increased.
And guess what happened as interest costs rose over the years? The government increased income taxes, business taxes and the premier has now set her sights on higher carbon taxes as well. Her debt explosion is already hurting taxpayers in the pocketbooks.
Next comes the employment angle. Ask your friends what they think happens when businesses see a government rapidly increasing its debt? The answer of course is businesses start to worry about governments raising taxes to address the debt problem. And if businesses worry about tax increases, some will decide to build their new factory somewhere else – taking all kinds of jobs with them.
We’ve also heard stories of existing businesses shutting down because of rising taxes and costly government decisions. Just ask the former owner of Abruzzo Ristorante in Calgary, who cited rising property taxes as a key reason for permanently closing the doors. How many businesses shut down or avoided Alberta because of the government’s 20 per cent business tax increase? It’s hard to say: businesses don’t usually alert the media when they choose to invest somewhere else – they just do it.
The third thing people need to keep in mind is that if governments run into debt problems, the services people care about most are eventually impacted.
Premier Notley routinely refuses to get spending under control, claiming she’s “protecting” education and health care. On the surface, her claim sounds valiant, but in reality, she’s doing more to put those services at risk than anyone else.
When Greece ran into debt problems a few years back, the Guardian ran the following headline “Greek Debt Crisis: Of all the damage, health care has been hit the worst.” Eventually, even the most sacred of government spending cows are impacted.
To be clear, Alberta isn’t likely to run into a Greece-like debt problem any
time soon. But it’s reckless for the government to be stepping on the gas towards such a problem.
What we need to see is for the government to get its spending problem under control – and doing so wouldn’t result in the sky falling.
Next door in British Columbia, we find a government that is providing similar services but at significantly lower costs. They’re simply a lot more cost-effective. If Alberta merely got its spending levels down to what B.C. spends per person, our government wouldn’t have a deficit right now … nor would it have piled on the extra $56,656 in debt since your started reading this column. Don’t forget to tell your friends.
Colin Craig is the Alberta director for the Canadian Taxpayers Federation.