A government budget is not that different from a personal one: In either case, we invariably break our promises to ourselves.
We start with the best information and the best possible intention. We tell ourselves that our revenue and income streams are stable; we make spending and savings plans accordingly. We close the books and go along our sunny ways until a computer model or online robot tells us we’re way too optimistic; too stupid to trust our own flawed perceptions of reality.
That’s precisely how the global economic collapse occurred in 2008. To my American cousins, I will provide a recap. (And listen up my fellow Canadians, because this affects you, too).
It all started with the assumption that the housing market in the United States was impervious to ups and downs. After all, weren’t mortgages the safest investment vehicle since God created sliced bread? No bank would make credit default agreements against this industry’s eventual failure. Until, of course, they did. In the end, that made the short sellers – who bet on a housing downturn thanks to utterly irresponsible interest rate spreads between homeowners and mortgage companies – rich, and the rest of the turtles. . .well, poor.
The poorer they, the average turtles, got, the richer they, the short-selling fund-managing sharks, became. Home-induced bankruptcies fuelled the new instruments of financial insurance, which finally decimated almost every major lender in the United States, before the feds swooped in like a batman with a broken wing to save them, with public money, from imminent perdition. In other words, my American cousins were twice. . .um. . .compromised through no particular fault of their own.
Welcome, dear reader, to the way the world works.
Welcome to the meaninglessness of splashy federal budgets.
Prime Minister Justin Trudeau’s latest economic report does little for New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. How could it?
To compensate for the utter lack of investment in strategic infrastructure – education, health care, roads, innovation and technology programs – by the former government of Stephen Harper, Mr. Trudeau would have had to drop the country into the $100-billion-deficit range, as opposed to the current $30 billion he’s just barely willing to tolerate.
Again, this is not precisely Mr. Trudeau’s fault. Oddly enough, it’s not even Mr. Harper’s. In their own ways, both have had to pretend to run Canada’s budgets in the interests of all Canadians. But the cause of the Great Recession of 2008 – the global financial meltdown of 2007 – is still with us, still perniciously affecting us today.
It reveals itself in the way so many middle-class people in New Brunswick can no longer buy affordable homes, pay for their kids’ university educations, build durable retirement accounts, or acquire sufficient credit to invest in small enterprises.
It continues to keep our revenue-generating private enterprises gun shy. Many no longer hire worthy youngsters to train. Banks no longer readily lend capital. Debt-riddled government guarantees are no longer worth what they used to be.
In the end, we continue to break all the best promises we ever made to ourselves in sunnier days.
Still, none of this is inevitable.
We can remake the world, right here in New Brunswick, without recourse to federal budgetary promises that are, at best, temporary, and, at worst, illusory. We can, in vibrantly unique ways, re-energize the entrepreneurial culture we once exported to the rest of Canada.
We merely need to remind ourselves that the promises we make to ourselves, our children and our grandchildren are the only ones that are worth fulfilling.