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This particular government loves to tout how the low debt-to-GDP ratio of 36 per cent it inherited provides the room to run deficits. On local Ottawa radio, Justin Trudeau said the low level of debt created the “opportunity, indeed the responsibility” for deficits, making deficit spending sound more like a patriotic duty than crass political opportunism. However, it is difficult to judge what is a low level of debt; in 2007, Ireland and Spain had apparently benign debt-to-GDP ratios of 12 and 26 per cent, respectively, but this was not enough of a cushion when the crisis hit. In the words of Olivier Blanchard, former chief economist at the IMF, one of the main lessons was that “what appeared to be safe levels of public debt before the crisis were in fact not so safe.”

All of Canada’s transformative social programs cited in the budget were introduced in the 1950s and 1960s, not coincidentally the golden age of post-war economic growth. The slowdown of growth in the 1970s signaled the end of new universal social programs, which depend on rapid economic growth for funding. Instead, the Trudeau government now argues that spending on social programs will spur faster growth. In the growing literature on whether we must adjust to a “new normal” of even slower growth, I have never read someone argue that slow growth was due to a lack of welfare programs. This is a classic case of putting the social-spending cart before the economic horse that ultimately supplies all the power.

The headline in the Ottawa Citizen the day after the budget was “Big Government is Back.” Look soon for the inevitable headlines that tell us “Big Government Mistakes are Back.” We already know the first one: Thinking that deficit spending on social programs will produce significantly different macroeconomic results. What it will actually do is leave a legacy of debt that will burden future governments just as they are facing the already difficult fiscal challenge of an aging population.

Philip Cross is a senior fellow at the Macdonald-Laurier Institute