News of the day revolves around “The Debt Crisis”. This is a couple of news days beyond the recent (supposedly resolved) U.S. debt ceiling debate. Although this renewed discussion has been stimulated almost entirely by precipitous declines in world stock markets, I’m personally relieved there will apparently continue to be public and media focus on this most pressing of social (not just political) issues.
I say ‘relieved’ because there’s a tendency to look for reasons to consider economic crises as “past” or “solved” somehow, even when nothing could be farther from the truth. Such is the case with the current debt debacle.
In the 1990’s, Preston Manning and his Reform Party managed to shame the government of the day into addressing the burgeoning public debt caused my endless budget deficits. Were it not for him, it’s doubtful Canada would have improved its finances to the degree that allowed it to weather recent events relatively intact.
Back then, I used to occasionally quiz people (trying to sound innocuous) what was meant by “deficit spending” and “public debt”. I was shocked to find most had no idea. I don’t know if people these days are any more literate about public finances; if not, they should be brought up to speed, and fast.
The state of the public purse directly impacts a government’s ability to deliver it’s vast array of services and benefits to its citizens. It’s not that much different from the finances of the average household – you can only spend more than you take in for so long.
Whether your ideological bent is towards the right or left, and whatever one’s prescription for how to “solve” the “distribution” problem for services, the current debt climate, if nothing else, will serve to illustrate a harsh reality: We can only “afford” what we’re capable of paying for; in my view, a useful starting point for a discussion that must take place.