Alternative Federal Budget

The Canadian Centre for Policy Alternatives (CCPA) released their Alternative Federal Budget 2009: Beyond the Crisis last Friday. It's available in PDF from their website. The report outlines tests for measuring the success of the federal budget, which is scheduled for release later today. The CCPA outlines its main areas of concern in the short run: the restructuring of EI, poverty reduction, investment in public infrastructure and homegrown industry, as well as a focus on government spending over tax cuts. According to the CCPA, a budget which fails to address these issues will also fail the Canadian people and will intensify an already dire economic situation.

I hope Flaherty's plan doesn't involve lulling Canadians with tax cuts.

I'm definitely not an economist, but I have understood a few basic economic constructs when somebody has taken the time to explain them to me. And the most important one I learned is that debt doesn't have to be a bad word. The severity of our debt is not simply defined by it's dollar value. Debt has to be understood in context and the best variable for this comparison is GDP, which is the total measure of the market value of the goods and services produced within our borders.

Canada's 2008 GDP is estimated at $1.564 trillion (according to The World Factbook), and our accumulated public debt is 62.3% of this, so about $974 billion.

If Canada was an average Canadian family with an income of $60,600 (Statistics Canada), that percentage of debt would equal to $37,753. In reality, the average Canadian household's debt is about $44,500, or 73.4 % of household income (Statistics Canada). (Note that I'm using 2005 data in order to compare apples to apples...)

So why are our collective purse strings so much tighter than our own? Do we believe that tax cuts and a few extra bucks in our own pocket will make for a better Canada?