Here are the exact words that Joanne Belanger, NDP candidate for Bay of Quinte, broadcasted into the airwaves when asked about her party’s plan to buy back the 60% of Hydro One that was sold off by the Liberals.
“We’re just gonna, ya know, print money and buy ’em all back.”
The province would need to cough up an 11-digit sum in order to push out all of the private investors.
Not only does the NDP platform not say where this money would come from, but it does not even account for the multi-billion dollar purchase in their costing. And it is not the first instance ‘alternative math’ that has been found in their platform.
‘Millions and Billions’
The candidate’s remarks may have been a joke – I would hope that it would be obvious to candidates that the province cannot print money – but even if it was, it still tells a troubling story.
It is easy to be desensitized to numbers in the millions and billions, and it is even harder to imagine government money as being our own. After all, the federal government actually does print money as part of a comprehensive monetary policy to keep the economy as stable as possible.
But government deficits have real effects for the country, and they are more serious than the NDP candidate’s perhaps offhanded words would suggest.
How Government Debt Impacts Finances
Every year, the government spends a portion of its revenues on what economists call “servicing the debt”. This basically means paying down the interest accumulated on existing debt. The government pays this interest while, when there’s a deficit, they borrow even more money.
According to official 2017 numbers, the cost of servicing this interest was $24.9 billion federally, accounting for 8.7% of federal tax revenue, and $11.4 billion provincially, accounting for 8.6% of provincial tax revenue.
This means that the Ontarians, on average including babies and the homeless, are on the hook for over $100 every month in paying investors while not even making any impact on our overall debt.
That means that almost 9% of all the taxes you pay go straight into the pockets of government debt holders.
And keep in mind, that is just the interest and does not account for money that would need to be spent in order to reduce the amount of the debt itself.
News Flash: Government Money Is Real Money
A balanced budget is merely the first step to reducing the size of the money hole we must fill each year.
This does not bode well for NDP hopes of balancing the budget by 2023, which is already more than a full term into the future.
The conclusion is that government money is just as real as your money. The cold truth is that the NDP must start to believe it, before they take another stab at running this province.
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