Today's commentary is written by Party President, Grant Schmidt.
P.C. President’s Commentary
Debt: Good, Bad and Ugly
This morning, the President is ranting about debt. The first thing we need to know about debt is the majority of Canadians don’t care about government debt. All the statistics and polls can’t be wrong.
In the April election, Brad Wall would not reveal his budget and the voters didn’t care. That does not mean the P.C. Party shouldn’t care. Our purpose is to lead the people to a better future. Our motto is “For the Right Reasons.”
Why is good debt good? Good debt is when you borrow to grow your assets, the profits of which pay off the debt.
All Premiers have created debt. Douglas had good debt when he built Sask. Power Corp. That turned into bad debt when he did not pay the debt down when the growth came. Devine had good debt when he built hydro and coal power plants, a fertilizer plant, and two oil refineries. Romanow and Calvert sold the assets and paid down some of the good debt. They never blamed Devine for the growth which paid for their mistakes.
Bad debt is when you borrow money for operating expenses because you can’t save or raise revenue because that would be unpopular.
Ugly debt is locked in hidden future debt. Douglas, Thatcher, and Blakney ran up hidden pension debt until 1980. What is hidden debt? Douglas and Blakney like to give the Government and Crown Corporation workers bigger and bigger pensions to buy their votes. That was a good social program which some other government would have to pay for.
The trick is give pensions now; pay in 30 years. Hidden because you don’t put the liability on the books as a debt.
To his credit, Blakney, corrected this in 1980. In 1981, the Government had two pensions to pay; the new funded pension and the old pensions which were becoming payable each year and growing.
Unlucky, Devine got elected in 1982 and had both pensions to pay during his nine years. In 1991, crafty Romanow changed the accounting and called the old NDP debt Devine’s debt. When you take out the old debt and good debt, Devine didn’t run up the bad debt that much. In 1981, I warned him in writing about that debt.
For eight years, I have accused Brad Wall of mismanaging a boom. Now he is running up at least 7.6 billion of ugly hidden future debt. For two years now Wall has tried to say capital borrowing for highways, schools, and hospitals is not debt. If it has to be borrowed and paid back it is debt.
The ugliest debt of all are leased (P3), Bypass, nursing homes, and schools which have no source of revenue except future taxes. Brad Wall has rented the capital construction mini boom. Now he can’t make the lease payments.
That is why Brad Wall has borrowed 6 billion dollars of ugly debt since the April 2016 election. You, the taxpayers, must pay that back over the next 32 years. He will have to borrow more in 2017 and 2019 to pay more than half a billion in balloon payments on the Bypass alone.
What is the difference between Wall’s P3 debt and the NDP pension debt? In 1990 when Devine put me on the Treasury board because I was good at math. The Douglas’ debt was a glaring example. It then took 20% of the sales tax; 1% of the 5% tax just to pay the old teachers’ unfunded pensions.
It is my hope the media will understand good, bad, and ugly debt so that the people can be told the truth about debt.
In the future I will tell you about my debates with Blakney, Romanow, Devine and the Sask Party about debt.
We continue to investigate the Tower Road scandal at speculators junction. Brad Wall is getting deeper and deeper in the Bypass dirt. What did Brad Wall know? How popular will he be in 2017?
I will be away until Christmas. Merry Christmas to those who celebrate Christmas and Happy Holidays to all.
President PC Alternative