Chapter 31 “was there any good from the COVIDs?: deficits both personal and governmental”
When I was a wee mite in the 1960’s the three dirty words I remember are homosexuality, divorce and credit. If you couldn’t fork up the cash for most expenditures you simply didn’t make the purchase unless the sum was large you had to buy on credit such as an automobile or a house. Most people didn’t have a credit card.
Homosexuality and divorce have lost their evil lustre for the majority and for that matter so has credit. When there were bricks and mortar bank branches I would ask the teller how many people paid off their credit card balances in full and they said around 25%. Given that interest rates were sky high and just about usurious that was unbelievably bad personal finance. Then with that Reaganonomic spirit consumer spending was seen as necessary to drive the economy so that bigger house, the Mercedes SUV and a cottage put people at the edge and if you had a job to support that went well as just chug along and enjoy your well dressed appearance as you hopped in a vehicle that was leased and all was OK.
By analogy governments that had any credit worthiness happily borrowed away spewing out billions in the arm’s race, space race, military hardware expenditures Olympic Games, G7 meetings and infrastructure projects. Many pointed out that as individuals needed a stash for a rainy day when they lost their jobs or became ill and disabled so too did governments need a surplus for that rainy day. There were plenty of opposition political parties that moaned about the pitfalls of running a governmental deficit particularly when the economy was running well but when hands are getting filled with money the spending governments bought their way to re-election. I have nothing against sailors but a popular phase in the 1950’s and 60’s was the expression “spending like drunken sailors.” This is what individuals and governments were doing prior to COVID . Spending money on Olympics in 1976 originally estimated as costing $120 million but ended up costing $1.6 billion virtually bankrupted Montreal and took thirty years to repay. Welcoming Syrian refuges with hugs and warm coats by Canadian Prime Minister Trudeau as they arrived in Canada on flights paid for by Canadian taxpayers was far sexier than saving money or at least cleaning up Canada’s shameful aboriginal social and living conditions.
So when COVID-19 hit there were many drunken sailors that woke up with a big headache. Millions lost their jobs, house and expensive vehicles and governments had no reserves only a big deficit so they had to spend trillions to fund mostly innocent but many greedy individuals that had been making good wages but living beyond their means. Yes there were many Mercedes and BMW’s waiting in the food lines. The health care system had faced cuts as flashy projects and government spending necessitated cutting the healthcare system. It seemed that veterans, aboriginals, minority groups and seniors were less important than medical care, housing and social costs for refugees.
To put it crudely and honestly those living beyond their means got caught with their pants down with the economic ravages of COVID. Deficit finally became a dirty word as there were not enough hospital beds, medicine and ventilators. Too bad it took millions of deaths to slap some sense into the social collective.