Doug Henwood wrote,
>I hear this from a lot of Canadians - the implication being that Canada
>didn't have a debt problem. With a structural budget deficit of over 5% of
>GDP in 1991, net government interest payments also over 5% of GDP, and the
>second-highest net government debt position in the G-7 (after Italy), I'd
>say those are numbers too big to ignore. With a net international
>investment position of -41% of GDP in 1996, I'd say that Canada still has a
>debt problem. When you've got a big debt, your creditors call the shots,
>no? Or am I missing something here?
No, the implication isn't that Canada didn't/doesn't have a debt problem.
The implication is that the source of the debt/deficit problem has been
misrepresented and the dimensions of the problem have been used as a pretext
to fry other fish. About 10% of federal government debt in Canada represents
program spending in excess of revenues, the rest is interest on debt. That's
about $540 billion interest on $60 billion of spending.
Canada's debt is the product, not of profligate spending on social programs
but of a decade and a half of right-wing fiscal and monetary policies --
high interest rates and tax give aways to corporations and high income
individuals. One might speculate that social spending was maintained as long
as it was in order to 1. smooth over the impact of the tax and monetary
policies and 2. wait as political support for the social programs eroded
(partly in response to changes in those programs).
For several years, the Canadian Centre for Policy Alternatives has put out
an alternative federal budget that would have reduced the deficit _faster_
than the announced schedule of the (finance minister) Martin deficit
reduction but without the immense inequities. Obviously, this overlooks the
political pressures that support those inequities. Maybe a fair tax system
and a full employment policy in Canada would be sufficient grounds for a
U.S. blockade.
Regards,
Tom Walker
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