Monday, October 10, 2011

Elections, Debt, & Deficits

I have finally had some time to really ponder about this past Tuesday's Ontario provincial election results.  I see that Dalton McGuinty sqeaked by with a minority government, which is not really surprising from what I've read from the coverage of the election.  It was an election really about nothing, with all the parties posturing about "investments" in health care, education, etc... all jockying to claim they are the best "managers" of socialism.  Ontario Tory leader Tim Hudak ran a lackluster campaign (on a personal level, Hudak went to my alma matter at roughly the same time I did - funny thing is I don't remember him considering my political involvement on campus.  Also, the campaign manager is another long time friend from university).

Nobody addressed the elephant in the room:   Ontario is piling up debt at an alarming rate, and it's debt-to-GDP ratio is now almost 40%.  Couple this with the fact that the provincial government is running up deficits as far as the eye can see, and health care spending growing out of control and is consuming a majority of the province's finances - it is apparent that a crisis will happen.

Again - nothing to see here.   Did not hear a word from any of the leaders of how the piper will need to be paid sooner or later.  Not a word that from the left that you can't finance socialism as he who has the debt calls the shots.   Not a word about how unsustainable this reckless government spending is and how a realignment is needed of what the government should and shouldn't do with its limited fiscal resources.
 
I can understand why McGuinty isn't worried based on the government finances.  He can keep spending like a pimp with one night to live, using record low interest rates and pawn off the consequences to his successor.  Looking at the provincial debt maturity schedule, the bulk of the debt matures in the next five years.  When the inflationary spike forces rates up (this is a question of when, not if now), the provinces finances will be crippled.

So much for "leadership".

1 comment:

Hershblogger said...

Mitch,

I like the redesign, and thanks for the Ontario update. I had missed it.

Duane