Many conversations have been held about whether politicians should be held accountable when they overspend budgets by requiring them to pay the first dollars before dinging taxpayers. Support for this notion is overwhelming with one caveat: How do we handle recessions?
What should families do to prepare for tough economic times? Should we spend all of the paycheque and then borrow for emergencies, or save some income for the unexpected?
For many, the answer is obvious: Save along the way. But this is not the norm these days. In 2000, the average family’s personal debt (excluding mortgages) equaled one year’s income, but by 2015 ballooned to 165 per cent.
In other words, a family earning $100,000 now owes $165,000. Taxes consume 42 per cent ($42,000, and 37 per cent ($37,000) pays for food, shelter and clothing. Factor in car(s) and expenses for vacation, recreation, communication devices, furniture, appliances, charities, gifts, restaurants, etc.
And, of course, there is that nasty interest charge on debt. How can people save for times when experiencing unemployment or mortgage rate hikes? Most, it seems, use their credit card. After all, our leaders in government use their “credit card” to borrow from the next generation.
Canadians now pay approximately $50B in annual interest for federal and provincial government debt. The average taxpayer contributes $2,300 annually toward this debt and $4,600 per couple if both work.
Canada is facing economic hard times and many voices are saying, “Increase spending on infrastructure during economic recession.” Costs for labour are lower and injecting money into the economy keeps the cycle moving.
Fifty billion dollars per year builds a lot of bridges, highways, schools and hospitals.
This is the legacy of politicians dating back 50 years ago when incurring deficits became the norm.
Our leaders cannot operate within budget; yet, they chide citizens to control theirs. Eventually, bankruptcy is the only way out for taxpayers, but uncontrollable politicians just hike taxes.
Do we really want government to add another $40B annually to our debt so that they can enjoy another photo-op? Making hard choices is their job and, when they refuse, holding them accountable by requiring them to pay extra from their government paycheque makes sense. This method will reduce their propensity to borrow from our children.
Jim Dueck
