Friends, this should concern everyone…

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Friends: This should concern everyone. Dated April 1, 2020.

Please see the following two lines from Newfoundland Premier Dwight Ball’s letter to PM Justin Trudeau: “To put it bluntly, our recent attempts to finalize our borrowing program, both short and long term, have been unsuccessful. We have no other recourse to raise the necessary funds to maintain the operations of government, including our health care system, especially at this time.”

Newfoundland can no longer borrow the money to pay their bills. Their finances have hit the proverbial wall. Of course I feel bad for the pain that many individuals will have to endure because their government could not live within their means.
Peter Zeihan, author of DisUnited Nations, spoke in Red Deer Alberta in early March and he predicted then that THREE provinces would soon be unable to meet their financial obligations either through tax increases or borrowing. I did not anticipate that it would be this soon. Fareed Zakaria of the Washington Post said the following about Peter’s book: “A fascinating new book that says you ain’t seen nothing yet.”

I have some unsolicited advice for Premier Ball, at least two other provincial leaders and anyone else who cares enough about the future of their/our province to look realistically at their/our limited options.

  1. Check with Peter Holle at Frontier Centre for Public Policy: fcpp.org/about/. Peter has spent the past thirty years studying how Sir Roger Douglas, New Zealands Finance Minister, dealt with his countries radical economic restructuring when they ‘hit the wall’ in the 80’s.
  2. In the meantime, do what Alberta Premier William Aberhart did when Alberta’s finances ‘hit the wall’ in the thirties: “Add up how much money comes in each month, divide by the outstanding bills, pay on a prorated basis”
  3.  Captain Chesley Sullenbrger, besides being the pilot responsible for the ‘Miracle on the Hudson’, worked for the National Transportation Safety board and he concluded that the pilots that were the most likely to survive a ‘critical incident’ were the ones the quickest to realize the seriousness of their situation.

Our political leaders must be quick to realize what the ‘Covid Shutdown’ means to government expenses versus revenues and they must be quick to act accordingly. They must reduce their spending immediately. I realize that many folks will be offended at my suggestions. I take no comfort in that. If anyone has a better idea, I am open to hearing it.

The ongoing Covid-19 pandemic is pushing many government budgets from a difficult situation to the type of crisis that Newfoundland is now experiencing. The sooner that our leaders come to terms with that reality, the more likely we are to recover.

In Alberta, many of us are hoping that the Fair Deal panel will recommend that our government immediately act to implement what has become known as ‘The Firewall Letter’ which would keep more of Albertans wealth in Alberta while transferring thousands of jobs from Ottawa to Alberta.