The “For Sale” signs sprouting on lawns all over the former boomtown are undeniable evidence the real estate boom has gone bust along with its oil counterpart.
People are apparently packing and making tracks toward Ontario or British Columbia — bypassing Alberta for the time being.
But another explanation could be that the homeowners have opted for the Cathy Bennett/Dwight Ball method of financial management.
In the Bennett/Ball school of economics, debt must be dealt with by cuts.
Never mind that you promised your children that they would have a roof over their heads until they graduated from university — freeing yourself of debt takes priority, so plant that sign out front, sell the house and balance the household books. With any luck, the place will bring in enough to almost cover your credit card and car payments.
Professors of the Bennett/Ball school of economics will declare this analogy to be invalid, because government must be run like a business, not like a household.
This mistaken notion of governance has been around for three decades, ever since Brian Mulroney was elected prime minister in 1984 and established Canada Corp.
(It’s ideological roots go back further, to the ascendance of Margaret Thatcher in the U.K. in 1979 and Ronald Reagan in the U.S. in 1980.)
The prime goal of business is, of course, to make a profit, or, in the very least, not lose money.
Mulroney, Thatcher and Reagan — as well as all their successors — utterly failed to avoid debt for the simple reason that a country is a lot more like a household than it is like a business.
Bennett/Ball Inc. has successfully stoked fear in half the Newfoundlanders (and a quarter of Labradorians) by announcing that Newfoundland and Labrador Corp. faces big, huge, gigantic deficits for the next five years if drastic action isn’t taken.
Anyone who recently took out a mortgage will be able to put this dilemma in proper perspective. Committing to biweekly or monthly payments for the next 25 years helps you make a proper comparison regarding five years of bank loans. And besides, it’s not as if those payments don’t get Newfoundland Corp. anything. You know, roads, schools, hospitals and stuff.
In household financial management, debt is long-term. Most people these days spend most of their lives in debt. You get paid … you make payments. It’s not as if you don’t get anything, though. House. Car. Education for the kids. And stuff.
If you ran your household the way Bennett/Ball want to run Newfoundland Corp., you would sell your house, get rid of your car and clear your credit card debt by cashing in the RESPs and telling the kids they’ll have to work their way through college.
Professors and students at the Bennett/Ball school of economics will claim this household/government comparison is inaccurate. I invite them to look at some numbers.
According to the Parliamentary Budget Office, personal debt in Canada averages $53,000 for every man, woman and child in the country, whether they are working age or not, whether they have a job or not.
In contrast, Newfoundland Corp.’s debt amounts to about $20,000 for each man, woman and child in the province.
The public’s rising hysteria about debt and impending disaster would appear to be misplaced. Some people inexplicably have tremendous sympathy for Bennett/Ball, but none for themselves or their fellow citizens.
A question yet to be answered is why Government Corp. debt has become a primary societal issue, yet personal debt is virtually ignored and unacknowledged.
One possible explanation is that people these days, in the 21st century no less than in the 16th, accept a life of economic servitude.
Brian Jones is an indebted copy editor at The Telegram. He can be reached at email@example.com.