No ‘free lunch’ with debt-financed government spending

Warning about running deficits

Proponents focus on the average fiscal cost of program spending when the interest rate on government debt is less than the economy‚Äôs growth rate. They ignore the potentially large marginal fiscal cost of deficit-financed increases in spending that arise when a higher public debt increases interest rates on government debt and lowers growth rates. Read this articleNo ‘free lunch’ with debt-financed government spending

More Federal Debt Can Help Build a Better Canada

Rather than wringing our hands about if and when the federal government plans to balance the budget or about the lack of a fiscal anchor to discipline federal spending, we should take the opportunity to assess the costs of decades of austerity light and have the long overdue debate about the role of debt and taxes in meeting the crises ahead and building the Canada we want. Read this articleMore Federal Debt Can Help Build a Better Canada