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Centre-Left Fiscal Responsibility

On Declan's new blog, Crawl Across the Ocean, he has written a short analogy about paying down our national debt. It has inspired this comment from a reader going by the tag "dejour":

I find it interesting that paying down the debt has migrated from being a right wing cause to a centre-left cause.

Which is, indeed, an interesting question. I'll try to give a first-impressions answer, although I haven't done any research to support it. What else would you expect from a blog?

I think there are really two questions here --

  1. Why has the right wing seemingly become less interested in the debt question?
  2. Why has the centre-left become so committed to fiscal responsibility?

To answer question 1, I think we can learn a bit by looking south of the border where the right wing does have power. It would seem that the fiscal agenda there is one that is meant to promote the interests of business. Presently -- whether it is right or wrong -- the interest seems to lie in lower taxes.

Now, lower taxes don't necessarily have to mean budget deficits, but the right seems to have also learned that the program cuts required to balance the budget would render them unelectable.

Back in the years of Preston Manning and Ross Perot pushing to slash the deficit, this was also the tune of the business community. Perhaps at the time there was a real belief that budgets could be balanced and both taxes and programs cut as part of a popular movement to reduce the size of government. Nowadays it seems that business leaders are more realistic about their prospects, but they still want to push for tax cuts to improve their profits and competitiveness.

Question 2 is an interesting one, too. For me it looks like the Liberal Party has learned a lesson and learned it well. That lesson is that the biggest threat to the social programs it has created is fiscal irresponsibility. Whether debt and deficits hurt the Liberal agenda through an actual fiscal crunch or through weakness at the polls doesn't matter. What does matter is that the Chretien-Martin strategy of liberal government combined with prudent management of the public purse has resulted in a hard-to-beat dynasty.

Of course, the scandal that made such big headlines earlier this year and last would not seem to be a great example of prudence. Nevertheless, I'd say the Liberals are generally on strategy. In fact, I'd bet that polling would suggest Canadians are much more confident with Paul Martin when it comes to avoiding a budget deficit than they are with Stephen Harper.



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