Juno News - This is why deficits matter

00:00:00.000 looks like some of us get to score a total colossal i told you so moment over prime minister

00:00:11.300 justin trudeau and finance minister bill morneau as they now try to eke out a spring budget in the

00:00:17.100 midst of all of this economic turmoil backtrack a little 2015 election stephen harper said we're

00:00:23.600 looking at a surplus coming up next time around tom maltaire ndp leader he said you know what we

00:00:28.860 got to keep going with balancing the budget working towards a surplus it would be just reckless

00:00:33.180 otherwise justin trudeau may be looking to differentiate himself from the conservative

00:00:38.240 and ndp leader says here's a crazy idea i'm going to propose modest modest deficits of only 10

00:00:45.400 billion dollars to kick-start the economy to grow the economy to get projects going infrastructure

00:00:51.340 projects to create jobs what do you think folks and at the time the canadian public well they were

00:00:56.600 kind of interested in it they thought it didn't sound too bad even though a number of us said

00:01:01.420 well hold on a second though we're not in a recession times are not bad is this really

00:01:06.140 what you want to do and justin trudeau and bill morneau said not only is it what we want to do we

00:01:10.780 want to break that 10 billion dollar promise we're going to go up to almost 30 billion dollars in annual

00:01:17.260 deficits and the numbers continued to chalk up over well we're now at year five they're planning

00:01:22.540 for the sixth year of a budget there really quite something to see all of this unfold and along the

00:01:29.500 way there were warning signs that this was not the wisest thing to do i'm the guy who broke the news

00:01:33.580 back in 2017 that a document came out from bill morneau's own department his own researchers who said

00:01:40.160 that if the feds continued on the track they are on this would put at risk the fiscal sustainability

00:01:46.380 of the federal government and i thought well what on earth does this report mean because they did the

00:01:51.940 biggest document dump ever you know how we say you drop news at 5 p.m on a friday if you don't want

00:01:57.860 people to know about it well this news was dropped at 5 p.m on the friday just before christmas on

00:02:03.440 december 23rd of that year so that was clearly them really wanting to downplay all of this and what it

00:02:09.520 basically said is if you run deficits like this for more years and you keep it going by the 2030s

00:02:16.440 the 2040s the federal system would collapse and i remember i called some some academics and some

00:02:22.060 economists i said am i reading this right i mean you know i've been reading my own government documents

00:02:25.920 for years but they're kind of saying that the government will just fall apart and that they won't

00:02:31.220 be able to pay old age security premiums they won't be able to pay their bills just money will just

00:02:36.160 stop being able to flow from general revenues and they said yeah that's what this report says so that

00:02:41.220 is just how dire the pathway the liberals put us on now of course the report said if they scale back

00:02:46.920 those deficits if they stop running 20 billion dollar deficits every year then things will markedly

00:02:52.480 improve and you will not uh go over the cliff but it was a cautionary tale from bill morneau's own

00:02:58.500 people so a lot of us said come on surely you got to do this and surely it's got to be something

00:03:04.300 that trudeau's only doing the first couple years to buy people a bunch of goodies and then get

00:03:08.780 re-election well he's been re-elected and they showed no sign of returning to fiscal sanity their

00:03:14.740 original promise was to get back to balance in i guess year five or year four just at the end of

00:03:19.360 their first term that did not happen and a lot of us also cautioned the problem is and the reason why

00:03:26.780 you want to scale back your deficits when times are good and even start paying down the debt and get

00:03:32.460 different uh cash hoards on available on the side you want to put money away for a rainy day fund

00:03:38.520 is in case things suddenly do turn bad you'll want to make sure you have wiggle room well look at where

00:03:45.620 we find ourselves now we have had the blockades that have brought our economy to a standstill that

00:03:51.120 has had a negative economic impact we've got warren buffett now saying quebec lng projects

00:03:56.520 i'm ghosting away from this taking billions of dollars out of the canadian economy and warren

00:04:02.380 buffett is a value investor and what that means is he doesn't do this day trading stuff based on oh

00:04:07.980 what's going to be hot tomorrow and so forth he looks at the underlying fundamentals and he invests

00:04:12.900 for the long term warren buffett has effectively said there's no value in canadian markets anymore at

00:04:19.580 least not when it comes to the energy sector big problem there and then we have the latest

00:04:24.860 massive thing that has happened to the markets a major meltdown one of the worst that they have

00:04:30.580 had in years single day trading seeing the tsx down by 10 synovus energy was down 50 at one point

00:04:37.680 the whole capped energy industry down something like 27 at the time of me recording this things

00:04:43.420 have rebounded just a little bit but still we are seeing major problems because of coronavirus concerns

00:04:49.100 and spats between saudi arabia and russia over oil major turmoil in the markets and major problems

00:04:56.220 for the economy and guess what justin trudeau and bill morneau are trying to cobble together the spring

00:05:01.580 budget now they say they want to bring relief for people they want to send good signals to the market

00:05:06.620 and they want to show relief for folks who maybe will have to not be at work because of the coronavirus

00:05:11.600 people working as frontline cashiers and all those positions that'll be told to stay home they will not

00:05:16.760 get paid i will be supportive of relief measures like that but where are you going to get the money

00:05:22.280 from we've been telling you for years stop this profligate spending stop all of this deficit spending

00:05:29.400 get reserves get a rainy day fund for when something just like this happens and they didn't

00:05:35.800 they didn't because of what because they thought it wouldn't happen to them because they just wanted

00:05:40.440 to own steven harper and show how they're different from him and so forth because they thought that

00:05:45.480 socialism works in canada i don't know what it was but the obstinate of it all of both justin trudeau

00:05:51.960 and the obstinacy of finance minister bill morneau who he should know better morneau chapelle is

00:05:57.320 basically an actuarial firm and that they calculate you know long-term risks and all that kind of stuff i

00:06:01.880 mean his professional background is that he should really know better than doing all of this yet this

00:06:06.760 is the situation they have brought us to i hate to say it i really do because this is hardships for

00:06:13.720 people but i told you so

Juno News - March 12, 2020

This is why deficits matter

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