Justin Trudeau and the Liberals were elected on an economic platform that included running deficits to finance infrastructure during a period of slow growth and low borrowing costs.
In a Globe & Mail column, Jeffrey Simpson reviews the causes of slow growth, and recognizes the legitimate economic argument for federal government budget deficits.
But he warns, “Under these circumstances that lead to slow growth, it will be easy to justify running deficits, even large ones. Breaking the habit, however, will be very hard indeed.”
This is the same argument Saskatchewan Premier Brad Wall made when he compared budget deficits to eating potato chips – “Bet you can’t eat just one.” Deficits are so politically tasty that they are hard to forego.
This column illustrates the political argument against government budget deficits in Macroeconomics for Life, Chapter 11.