27 Aug The myth of Conservative debt management

Newspaper editor turned civil servant turned citizen journalist Bill Turpin scraped data from the CBC website on the history of Canada’s federal debt and produced the following summary:

In nine years, Harper ran up $131 million billion in new debt, while Martin and Chretien took half again as along to run up just $60 million billion. (Martin’s contribution to this total was $17 million billion in debt reduction.) Yes, Harper had a historic recession to manage, but the history of debt accumulation under Joe Clark, Brian Mulroney, and Kim Campbell vs. John Turner and Pierre Trudeau would show a similar pattern—as does the history of federal debt growth in the US. Large deficits rung up by right wing governments; smaller deficits when the left is in charge.

This is not a new story. As the first socialist premier of Saskatchewan, Tommy Douglas introduced medicare, then a radical notion in North America, without incurring a deficit, because he didn’t believe he could govern progressively while in hock to bankers. Writing in the Globe and Mail, the late Neil Reynolds summarized this record:

When Mr. Douglas took office in 1944, Saskatchewan had a debt of $218-million – 38 per cent of provincial GDP. By 1949, he had reduced the debt to $70-million. By 1953, he had eliminated it. By 1961, when he left office, he had produced 17 successive budget surpluses. By reducing the debt, and thereby reducing interest costs, he was able to spend more on public services – without raising taxes.

The dirty secret is that right wing governments love accumulating debt because, as Douglas intuited, debt servicing charges crowd out social spending. So how, exactly, have conservative parties succeeded in maintaining their reputations for fiscal rectitude in the face of overwhelming evidence to the contrary?