Fiscal fibbing

Stewardship of the economy has been one of the key issues in the Canadian election campaign, now mercifully nearing its end -- we head to the polls on Monday. Liberal leader Justin Trudeau has distanced himself from both the Tories and the NDP by promising to run small deficits for three years in order to jump start the economy. The other parties have jumped all over this, accusing Trudeau (or "Justin" as Harper always calls him) of irresponsibility.

The myth that right-wing parties are better managers of the public purse dies hard: just a couple of nights ago, a Tory-supporting friend of mine, while watching the Blue Jays knock off the Texas Rangers, listed Trudeau's deficit pledge as his key reason for supporting Harper this time. Yet the facts clearly show that over the last two decades, it's the Tories that have run deficits, while the Liberals have run surpluses. Check out this interesting table for the facts.

Let's shorten the time frame just a little. Harper has been PM since 2006, so let's call that nine years, and compare it with the last nine years of Liberal government, under first Jean Chretien (1997-2003) and then Paul Martin (2003-06). All nine Liberal years saw budget surpluses. As for Harper, his government ran surpluses in 2007 and 2008, then deficits each year until the current one, when a small surplus was eked out. Deficits, in other words, two-thirds of the time -- and if you were really mean, you could say that the early surpluses actually reflected Liberal fiscal rectitude, and this year's surplus was only achieved through an asset sale.

Now there's a lot about this comparison that warrants caution. I don't like to compare politicians over time ('Harper has the worst record in creating jobs since the Great Depression", to quote one recent example) because each government can only play the cards it's dealt. We can't know whether Harper would have been as fiscally cautious as the Liberals were from 1995-2005 if he'd been PM then, any more than we can know how Chretien and Martin would have handled the financial crisis after 2008. Harper and his then Finance Minister, Jim Flaherty, were well-advised to put their principles on hold for a while at that time and run deficits to protect the economy from catastrophe. My only point here is that it's downright mendacious for a party whose fiscal record has been less than stellar to be painting his opponents as irresponsible.

The myth of that progressive parties are irresponsible is not just a Canadian one, of course. We just need to look south of the border for evidence. A key reason that Harper was able safely to run deficits in response to the financial crisis was the fiscal rectitude shown by his liberal predecessors for more than a decade. By contrast, Barack Obama's spending in response to the same crisis came after almost a decade of staggeringly poor fiscal management under President George Bush (43).  Interestingly enough, we recently learned that the US budget deficit for this current year will be the lowest since 2007, though that is unlikely to stop the GOP from painting Obama as a spendthrift.    

Turning briefly to the election itself, polls suggest that the Liberals will be the largest party in the Commons, but will fall short of a majority, so there will be a lot of wrangling and maneuvering in the days and weeks ahead. The Liberals' strong showing has surprised many -- including, at least in our riding, the party itself.  To run against a Tory incumbent, the party has fielded a visibly tired 70-year-old with no previous experience at the national level. It's impossible to imagine that they'd have done that if they had had any real thoughts of winning the seat. Given the way this seems to be turning out, you have to wonder how many similar placeholder candidates might actually wind up in the House of Commons by this time next week.