He dead-on accurately forecast the nation’s newest, shocking, budget deficit. As such, the man (John) calling himself TANSTAAFL won the right to write, then stand naked before the steerage section as the rabble passes comment. That moment has come.
Who is he?
“I am a GenX engineer by training who has lived across this great country from Annapolis Valley to Vancouver Island before landing in Alberta. As for the dog, I am still looking, but it will be a lab. I believe in balanced portfolios of low cost ETFs and have paid the price in the past for thinking I was smarter,” he tells me.
And how did he know exactly just how deep Chrystia’s well of ruby red ink would be?
“I could claim omniscience and shill my opinions on cable but the truth is I came to my deficit estimate by reviewing the September PBO estimate, adding a politically optimistic accounting of the promises since then, and added a decimal place to give it the air of precision and accuracy.”
So, what do you have to tell us? – Garth
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By Guest Blogger TANSTAAFL
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This post will most certainly prove to be more pathetic than usual and for that I offer condolences to our mighty host and his legions of fans. To those yearning for financial insights or desperately seeking permission to buy a house sure to bury them in debt and eclipse their other assets the answers, just for today, will have to wait.
TANSTAAFL – There ain’t no such thing as a free lunch!
When money falls from the sky to defeat a virus and the chaos it has wrought, someone has to pay. While pandemics are temporary, debt has a way of sticking around and comes with a real cost now and into the future. With a $381.6 billion federal deficit and combined provincial and federal debts approaching $1.8 trillion those costs are epic. Remember the quaint days just a year ago when a $28 billion deficit was staggering?
How did we get here? Politicians, faced with hard decisions and limited evidence, shut society down to avoid overwhelming the health care system and save lives. This destroyed the ability of employees and businesses to make money and came with a moral obligation to fill the void and avoid an even larger scale destruction of the economy. While we may disagree on the amount of money required, or to whom and how it was distributed, as a society we had no choice but to share this burden. The majority had failed to heed the advice of this blog to avoid over extending on housing and to invest for the future leaving them financially unprepared for this crisis. Governments spent more than they collected in the good times and now, here we are. Buried in debt and facing growing inequalities in our society only accelerated by our response to the pandemic.
I am not an economist or politician but as a citizen and tax payer I have to ask, what’s the plan to get us out of this financial mess? Hoping that interest rates rise more slowly than economic growth indefinitely while building ever larger structural deficits seems a questionable strategy to leave to the next generation.
What are the impacts on public services as debt servicing costs inevitably rise or job creators as the unpopular answers to those questions demand revenue? How do we support employment opportunities for those disproportionately impacted by the shutdowns or ignite growth given our questionable record of supporting innovation and R&D investment? How do we address the growing inequalities in our society that left unattended will eventually lead to social instability?
These are significant questions without clear answers and many potential policy directions. What are the insights I have to offer to the esteemed readers of this blog?
Critical thinking matters now more than ever and listening to voices that don’t simply reinforce our own opinions builds better solutions. While everyone should be an equal participant this does not mean embracing “alternative facts” provided by your BIL after a couple of drinks as the truth. This is something we all intuitively understand. I have carefully considered the facts provided by a variety of experts with differing opinions on the value of rate reset preferred shares in a balanced portfolio, how safe they are in a traditional sense compared to fixed income, and their benefits in a rising rate environment. I do not provide equal weight to the evidence provided by TNL@TB or the resulting recommendations for my investments and I would be shocked if anyone else reading this blog did.
It is time to expect more from our politicians and raise the level of debate in this country. We all have a civic responsibility to think critically, ask difficult questions, assess the quality of evidence, and remain open to changing our minds. It is going to hurt everyone but together we can find the best solutions to manage the debt. With strong leadership and innovation we can transition to a greener future while still recognizing the importance of our fossil fuel industry and holding it up as an example for the world. We can have important debates about policy wonk issues like ranked voting, giving a real voice to the regions of this country, and the ever more evident concentration of power within the PMO. Once we move past debates looking like shouting matches between counter-protestors we can deal with the really hard issues, like reconciliation and the impact of AI on employment.
Now, having shredded my credibility as a pessimist and realist, I have just one more offering. I knew what the deficit was going to be and having considered the evidence I know how to keep it and the virus from getting worse;
Wash your hands, wear a mask, and when the time comes get vaccinated. Don’t stumble on deciding which one is the best or if you really need the second dose. Decide now to stand-up and get jabbed, likely twice, it is the best path to stopping this insanity and getting this blog back to the COVID-free financial and canine insights we crave.