Western Standard - August 24, 2023


Today’s spending will lead to tomorrow’s cuts

Topics
spending cuts austerity
Mentioned
Pierre Trudeau Ralph Klein Chrétien Mike Harris Roy Romano Mulroney Lougheed Getty
Cory Morgan Show. Austerity is inevitable Dan McTeague on energy and affordability in Canada

Episode Stats


Length

5 minutes

Words per minute

199.97

Word count

1,022

Sentence count

76

Harmful content

Toxicity

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

What s going on right now in politics has already happened before, and the parallels are chilling. Government spending is out of control, inflation is rising, interest rates are on the rise, it sounds just like the 80s, late 70s. The current economic path now is unsustainable and is going to come to a crashing halt eventually.

Transcript

Transcript generated with Whisper (turbo).
Toxicity classifications generated with s-nlp/roberta_toxicity_classifier .
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 What's going on right now in politics has already happened before.
00:00:03.240 I mean, the parallels are almost chilling.
00:00:05.500 We got a Trudeau as Canada's prime minister right now.
00:00:08.400 Western resource development's under attack.
00:00:10.560 Government spending is out of control.
00:00:12.960 Inflation harming citizens and interest rates are on the rise.
00:00:16.880 It sounds just like the 80s, late 70s.
00:00:19.180 The current economic path now, though, is unsustainable
00:00:21.800 and is going to come to a crashing halt eventually.
00:00:25.100 And, you know, there's lots of blame to throw around.
00:00:27.020 Conservative governments are usually a little better than liberal ones
00:00:29.520 in times like this.
00:00:30.680 I mean, Mulroney continued with spending increases
00:00:32.880 and deficit budgets when Pierre Trudeau exited the scene.
00:00:35.960 In Alberta, the progressive conservatives under premiers Lougheed and Getty,
00:00:40.240 they borrowed heavily while pouring tax funds
00:00:42.280 into a series of failed corporate welfare schemes.
00:00:45.540 Now, the bubble finally burst in the 1990s for pretty much everybody.
00:00:49.200 Debt servicing costs were taking a massive bite from government budgets
00:00:52.600 while citizens just weren't ready to accept more tax increases.
00:00:56.040 So governments at all levels, with every political stripe, had to cut spending.
00:01:00.180 There was no getting around it.
00:01:01.620 Federally, the Chrétien government balanced the budget.
00:01:04.640 Well, provincially, we had Ralph Klein and Mike Harris bringing spending under control
00:01:08.480 in, you know, in Alberta and Ontario.
00:01:10.960 And yeah, in Saskatchewan, even the NDP out there,
00:01:13.600 they had to face economic reality.
00:01:15.260 Roy Romano cut spending by 10% in one budget.
00:01:18.360 He managed to balance the books in 1994.
00:01:20.140 It wasn't easy, though.
00:01:22.740 Unions, lobby groups, individuals, they screamed bloody murder through the 90s
00:01:26.360 as the cuts were applied across the country.
00:01:28.820 But at that time, at least their protests were unheeded.
00:01:31.160 Canadians wanted to see balanced budgets,
00:01:33.540 and they wanted to see governments cutting spending.
00:01:37.100 Eventually, though, the cycle turned.
00:01:38.980 With balanced budgets, times became good again.
00:01:41.680 Economies picked up, and the governments began to open the spending floodgates again.
00:01:46.080 Even in Alberta, under Klein, the spending began to rise quickly at the end of the 90s.
00:01:50.180 Ironically, it was when Klein started increasing expenditures
00:01:53.560 when his provincial support started to flag.
00:01:55.880 You know, citizens are fine with low government spending,
00:01:58.120 but politicians just can't resist increasing the budgets.
00:02:01.680 It's an easier way to manage the government than being fiscally responsible.
00:02:05.480 Just toss more money at it.
00:02:07.140 That administrative sloth, though, does come with a price over time.
00:02:10.720 And in 1999, the federal government returned to deficit budgets,
00:02:13.720 and in Alberta, it took till 2008, but deficit financing has returned here as well,
00:02:18.360 and we haven't managed to produce a balanced budget since.
00:02:21.080 Low interest rates, they allow governments to get away with deficit financing for a time,
00:02:25.040 but as we're seeing today, the rates don't stay low forever.
00:02:28.580 What goes down must come up.
00:02:30.400 Just servicing the federal debt alone is going to cost an estimated $34.7 billion in 2022-2023.
00:02:38.320 That's assuming interest rates stop rising, of course.
00:02:40.960 And every province is flushing money down the toilet on debt servicing, too.
00:02:44.000 It's interest costs, guys.
00:02:45.160 It's money on the credit card, so we could really spend in better places.
00:02:48.700 Now, the Trudeau government, this is where it got me going on this,
00:02:51.440 recently called for departments to find $15 billion in savings.
00:02:54.580 I thought, wow, are they finally going to do like Chrétien and be responsible liberals and do some cuts?
00:02:59.640 But no, then they quickly pivoted to say, oh, we're not going to cut $15 billion in spending.
00:03:03.980 We just want to find those savings, and we'll shift it to other departments.
00:03:06.760 So, in other words, they won't even talk about cutting the spending.
00:03:08.780 The hard reality governments and citizens need to face is that governments spend too much.
00:03:14.080 And, yes, I'm including citizens in that statement because, hey,
00:03:17.200 we're the ones who keep turning to the government for every service or problem.
00:03:21.080 People want every pet project funded, every foreign cause supported,
00:03:24.760 and every industry subsidized, or they'll take their votes elsewhere.
00:03:27.860 I know it doesn't apply to everybody.
00:03:29.060 It applies to enough of them. 0.97
00:03:30.500 Whether we like it or not, people tend to vote for whatever politician blows the most sunshine up their butt
00:03:35.280 at election time, and they tend to shy away from politicians offering a realistic fiscal platform.
00:03:41.960 People won't change their demands of governments until they start directly seeing the cost of spending,
00:03:45.520 but we are starting to see it now.
00:03:47.240 Deficit spending is fostering inflation, while taxes increase to try and keep up with the spending.
00:03:51.940 The rising cost of living is hurting everybody, along with the taxes.
00:03:55.780 Taxes alone right now eat up 45.3% of the average family's income.
00:04:00.460 While food, clothing, and shelter only make up 35.6%.
00:04:03.340 Citizens are loathe to admit it, but they can't hide from it forever.
00:04:06.980 When enough people realize the government is the largest expense in their life,
00:04:10.460 and they just can't afford it anymore, they're finally going to start demanding cuts.
00:04:13.940 The question with spending cuts and austerity isn't a matter of if they're going to happen,
00:04:18.580 it's a matter of when.
00:04:19.840 I mean, the laws of economics are as immutable as those of gravity,
00:04:22.660 and the spending will have to be brought back into check eventually.
00:04:26.120 We just can't keep living on the credit cards.
00:04:27.880 The longer we wait to cut spending, though, the harder it's going to be when those cuts come.
00:04:31.960 An increasing segment of the population has become dependent upon government jobs and programs,
00:04:36.520 and that segment's going to suffer when the government's spending starts contracting.
00:04:40.380 It's going to be ugly as they try to adapt.
00:04:42.840 But the sooner, the better.
00:04:44.540 We're on a slow-motion collision course with an inevitable fiscal reality check.
00:04:49.660 The sooner we can ring the alarm bells, the better.
00:04:52.480 And right now is the time.
00:04:53.540 We've got to start reining in spending and reducing future pain.
00:04:56.720 Right now, it feels like the warnings are falling on deaf ears,
00:04:58.960 but hopefully citizens start to get the wax out and start listening soon.
00:05:01.940 Because when the citizens move, the politicians will follow.
00:05:05.520 Eventually, they always do.