Paying Off Provincial Debt is Now Our Second Greatest Expense

There is a place for credit in modern economics, and that place is for emergency use only.

There is no easy way to say this, I have been pooped on by a crow. When I awoke this morning I had not the slightest inclination that later on that day another creature would defecate on me. I learned two things, one, that you have to dream big in this life, and two, that the future will always be stranger than anyone’s philosophy.

Which brings me to future spending and spending the future; our modern system of economics is both beastly and strange. In the afterglow of yet another scintillating provincial budget we are  able to reflect on a few key points, the following in particular: Servicing our provincial debt is today our second greatest expense.

Yes, you read that correctly, paying only the interest, the minimum payment on our provincial credit card, is now greater than every other expense except that of our astronomically expensive health care system.

According to the 2017 provincial budget, debt servicing will cost us approximately 1.1 billion dollars, and health care comes in at around 3 billion dollars. To give those numbers some context, our next greatest expense is the department of Education and Early Childhood Development, which costs approximately 800 million dollars to run. We are spending 300 million dollars more servicing our debt than educating our children.

We are spending 300 million dollars more servicing our debt than educating our children.

We are certainly not alone in this, every Canadian province and every American state currently finds themselves in an ever sinking stew of fetid credit. Are our politicians insane sadistic psychopaths? Unfortunately not, that’s a problem we could fix.

No, our politicians are making rational choices within the context of the system they find themselves. Election cycles have eliminated the possibility of long term planning. A few years of blaming past governments for the mess we’re in, and a few years of spending in order to buy votes to get re-elected is all we get.

Where things really take a turn for the grim is in the type of money being spent: modern credit economics. There was a time when nations spent the money that they had already earned, and if that ran out, they stopped and earned some more. How quaint.

Modern credit economics allows us to spend 10 years of our collective future earnings in a single day. All spending today is on credit, that credit is based on future possible earnings, and we predict what that future will look like. Short term planning, coupled with spending money we do not have, that’s the current system we are strapped into.

Never allow an economist to convince you that credit is progress, that credit is new and a generator of wealth, nothing could be further from the truth. Credit is ancient, civilizations have moved from an imaginary currency(credit) to a physical currency (gold, silver, money) and back again for centuries.

Here in Newfoundland, we had an economic system of barter based on credit for centuries called “Truck.” It left us beholden, powerless, and, impoverished. It left us without options.

There is a place for credit in modern economics, and that place is for emergency use only. We can retake control with long term planning, or we can continue to spend money we don’t have and take our chances on predicting the future. I’m quite certain there are hundreds of critters out there eager to take a dump; the where and when however, are problematic.

Written By
More from Chad Bennett

Newfoundlandia: The Tsunami Of 1929

Tsunamis are meant to happen elsewhere. Out beyond the Atlantic pale and...
Read More

2 Comments

  • If the government wasn’t stretched so thin by a long list of silly programs it wouldn’t be so bad. big government is the problem. a small, socially conscious government is the solution. governments ONLY concerns should be the basics. health care, education, housing, food supply, environment, infrastructure, and law/order. the NL gov should be half the size it currently is.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.