Editorial Universality will break the country

No one expects a balanced budget to be reached overnight. And, if the national debt were not so onerous, running a deficit from time to time could be justified.

What cannot be justified is continuously spending more than is collected. A country, like a corporate enterprise, can make use of debt judiciously, but no entity can take on more debt than it can afford to carry. We, however, are at the point where debt is being incurred not for “capital investment” but merely to pay for “operating expenses.” We are, in fact, increasing our debt every year, not to increase assets or improve productivity but merely to pay the bills already owing.

After the past five years of economic growth, there’s no reason why we should be in debt at all. The sad truth is, however, that we are so far in debt that there is very little room for policy manoeuvering. The government has raised taxes as much as is reasonable, and even those increases threaten to bring the economy to a grinding halt. Because of past mismanagement, the government is now in the position where it simply cannot initiate any new spending regardless of how worthwhile the purpose.

The only alternative is to cut spending. Unless the government shows some political courage now and makes those cuts, we are going to be in deep trouble for years to come.

There is no reason why the government shouldn’t make more drastic cuts. There are ways to cut spending that are not only painless but that, in fact, make a great deal of sense. The first action the government should take is to back away from the outdated concept of universality of social programs.

Through the warped alchemy of politics, the idea of universality — a very attractive political concept which holds that everyone should receive the same benefits from the welfare state — has been perverted into a justification for an illogical, wasteful and ultimately destructive system of redistributing wealth to people who don’t really need it.

Raymond Addington, chairman of the Fraser Institute, in a recent speech quoted Statistics Canada figures showing that the Canadian government pays more than $7 billion a year to families that have an annual income above $50,000, including more than $2 billion paid to families whose incomes are over $75,000.

He estimates that making payments “to Canadian families who are manifestly not in urgent need” will add $1 billion to the next fiscal period in interest payments alone. And that burden on the deficit doesn’t include the payments themselves.

“Is it really compassionate to provide an old age pension payment to a grandparent whose income is $75,000, the cost of which will have to be borne by his grandchildren whose incomes will in all probability be less?” asks Addington.

The answer is no, and until the government is willing to act on that basis, programs that really need public funds will go without.

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