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Generation Screwed to Morneau: stop shoveling government debts on Canada’s kids - Peter Diekmeyer (08/03/2018)

Generation Screwed to Morneau: stop shoveling government debts on Canada’s kids - Peter Diekmeyer

March 8, 2018

Bill Morneau, Canada’s Minister of Finance, told a touching story recently about being alone while his daughters were away at university.

A poster about women’s rights that he saw in one of the girls’ rooms as he toured the empty house provided inspiration for a slew of new spending programs in his 2018-2019 budget, Morneau said.

The speech drew considerable admiration from the bureaucrats, lobbyists and lawyers gathered at the Conseil des Relations Internationales de Montreal’s event, many of whom profited directly from the extra spending.

This seasoned audience of Ottawa swamp creatures recognized the Finance Minister’s personal story as political staging.

They all knew that Morneau was leaving out the fact that his daughters’ generation will have to pay back most, if not all, of the $18.1 billion that their parents are borrowing to finance the government’s “Equality and Growth” deficit.

Politicians running up government debts in order to pay themselves raises (and shovel cash to their pals) is an old story. The good news, as we first reported two years ago , is that some millennials are fighting back.

A youth movement that preaches fiscal responsibility

“I’m not okay with Bill Morneau borrowing additional money to channel to special interest groups,” said Paige Hunter, McGill Coordinator at Generation Screwed , a youth movement that preaches fiscal responsibility. “Going further into debt isn’t in anyone’s interest.”

Renaud Brossard, Generation Screwed’s executive director, agreed. “We jokingly call this an ‘everything is fine’ budget,” said Brossard. “There is no plan to address the country’s long-term debt, and there is no recognition that there may be another recession around the corner.”

Generation Screwed has grown considerably since Brossard first joined four years ago, while still a student. The organization, which is sponsored by the Canadian Taxpayers Federation , now has 17,000 Twitter and Facebook followers.

Later this month, Generation Screwed will host a Calgary Forum at Mount Royal University’s Glenn Hall to air out the federal budget as well as provincial issues stemming from Alberta’s Notley regime’s profligacy.

A role model for fiscal irresponsibility

Morneau and other government officials argue that Canada, which has a 30.4% debt-to-GDP ratio, the lowest in the G7, can afford to run deficits to invest in the future.

However, fixed assets and infrastructure investments (the latter of which were cut) form just a miniscule part of the budget. Almost all the spending in the Morneau document is for current consumption.

Furthermore, Morneau’s debt figures don’t tell the whole story.

As we pointed out last week, according to Statistics Canada, provincial governments, businesses and individuals are increasingly following the Canadian government’s example and are also borrowing to finance current consumption.

Canadians have accumulated a record $5.8 trillion in system debts as at Q3 2017. That works out to more than 300% of GDP, nearly 10 times the number Morneau shows in his budget documents.

As if that were not enough, government spending has reached critical levels. According to the Fraser Institute, the average Canadian works five months a year just to pay their share of taxes, much of which are hidden.

Sadly, both parties are at fault. “The Liberals and Conservatives complain about each other all the time,” says Brossard. “But when they get in power each does the same thing.”

We can’t succeed if half of us are held back”

What is even more ironic is the slogan on the poster in Morneau’s daughter’s room that motivated the extra government spending: “We cannot succeed if half of us are held back.”

It’s a powerful message that could also be interpreted another way: although many women have had a rough time, perhaps today millennials are being held back even more.

Canadians 40 years old and over (and that includes women) largely spent the $5.8 trillion that governments, businesses and households owe.

Canadians younger than 40, like Morneau’s daughters, will get stuck paying most of it back.

That said, Generation Screwed’s executive director remains focused on fixing the problem before things get further out of hand.

“Canadian youth don’t have as much power as special interest groups,” says Brossard. “But we have to speak up. Because politicians clearly won’t do it for us.”

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About the Author

Peter Diekmeyer has been a business writer/editor with publications such as Sprott Money News, the National Post and Canadian Defence Review and Jane's Defence for nearly three decades. He has studied in MBA, CA and Law programs but dropped out of all three after failing to convince the academics that they were wrong about everything.  Diekmeyer has interviewed more than 200 CEOs and filed reports from dozens of countries. 

His most terrifying moment came when he spoke to central bank economists for the first time and realized that (unlike politicians) they actually believed their own analysis and forecasts. 
He has been a regular contributor to the Sprott Money blog since 2015.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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