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Tip for Tories: A grown-up conversation about debt will pay political dividends

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Peter Lougheed

As Alberta's Tories gather today in Calgary to celebrate Peter Lougheed leading them out of the Social Credit wilderness 41 years ago, they will expend plenty of energy feuding over disinviting their federal Conservative brethren from future affairs of this nature.

In the past, federal Conservatives have been automatically entitled to vast votes at Alberta Progressive Conservative bunfests like the Cowtown annual general meeting today and tomorrow.

But so many of Prime Minister Stephen Harper's Alberta caucus tilted openly in favour of the radically market-fundamentalist Wild Rosehip Tea Party during last April's provincial election that moves are afoot to sever the ties that bound.

Judging from her comments on CBC radio this morning, notwithstanding federal Conservative candidate Joan Crockatt's Calgary-Centre by-election sign on her home's front lawn, the idea of a Tory v. Tory political divorce appears to have Premier Redford's imprimatur.

Certainly the Harperites have come to be seen in Ms. Redford's inner circle as a Wildrose Fifth Column that needs to be driven from the encampment before the government faces, as they like to say in conservative circles, an existential crisis.

This will be entertaining, but it is nevertheless a pity since there are topics that could be more profitably pondered by the gathered Redford Tory weighty ones -- indeed, by all Albertans. Prominent among them would be a grownup conversation about debt, deficits and fair taxation, issues that are certain to bedevil this party in the months ahead.

For an awfully long time now out here in the New West, the only people we've listened to on those particular subjects have been pre-Wildrose market-fundamentalists like Ralph Klein, our (un)Progressive Conservative premier from 1992 to 2006 who through his government's mismanagement did so much damage to Alberta's infrastructure and social fabric it could almost be described as vandalism.

Klein has now passed from the political scene, of course, to be replaced in 2006 by Ed Stelmach, who realized that he needed to move his party toward the centre for it to survive, and last year by Redford, who confirmed and proved the wisdom of her predecessor's assessment.

But Klein's neoconservative nostrums and notions continue to be the conventional wisdom many in his old party and everyone in Wildrose circles, all of it amplified through the media echo chamber. These include:

1.    All debt is bad. Always.

2.    All deficits are bad. Always.

3.    Revenue may never be increased, except by happenstance.

4.    And, of course, we should run our province’s budget as if it were our family's budget.

The problem with this dogma, tattooed on the back of Wildrose Party Leader Danielle Smith's left hand for easy reference during public meetings, is that it is mainly baloney, and contradictory to boot. (The bit about the tattoo was a joke. I don't know Smith well enough to know if she has any tattoos. But you get the idea.)

Since the same fundamentalists and their media acolytes have persuaded us all for the moment that any kind of fair taxation -- or even bothering to collect 100 per cent of the ludicrously low taxes and royalties we levy against some businesses -- is just not on, this means reducing benefits to citizens, limiting public services and doing without needed facilities are the only mechanisms available to eliminate the supposed evils of deficits and debt.

One result here in Alberta, notwithstanding our famous petroleum revenues, is that we end up paying cash for everything so as to avoid the horror of debt. But paying cash for everything, as should also be obvious to anyone who’s run a real family budget, is like burning up your RRSP to pay your rent!

Slashing expenses when you need to spend, as Nobel Prize-winning economist and New York Times columnist Paul Krugman famously observed, "represents a stunning failure of policy."

What these Kleinite holdouts advocate is akin to not heating your house in December if your holiday bills outpace your income, never mind the lower heating costs in summertime. Some structural damage may result, not to mention hypothermia. When damage begins to threaten your house’s structural integrity, bet on it that the repairs will cost more and take longer!

This is essentially what Klein did to Alberta’s infrastructure as premier. He let it run down like a homeowner who refused to fix the roof so he could brag about having no debt. Eventually, the roof started leaking.

In the case of Alberta, roads crumbled, schools and hospitals started to fall apart and infrastructure didn't keep pace with population growth. Municipalities set to feuding over scarce regional resources. Emergency repairs cost a fortune, because we couldn't control the timing of the emergencies.

Of course, very few of us would have a house at all without a mortgage, that is, debt -- which is why no family waits until they have100 per cent of the money in the bank, as the Kleinian "family budgeters" advocate. Their way, most of us wouldn't buy our first houses until we were about 70!

That's OK, though, because we wouldn't have had the cash to buy a car either, so we'd have to live walking distance to work. Mind you, we wouldn't have a very good job, because we wouldn’t have had the cash to pay for an education, so we'd live in a crappy part of town.

Thanks to the Klein Government’s negligent mismanagement of Alberta -- which the Wildrose Party proposes to continue, presumably because that’s the easiest way to attack the government -- this has become the principal political problem the Redford Tories face today.

If they want to invest in the future, even with cash flow that’s healthy by Canadian standards, they're going to need to borrow money at the extremely low interest rates available to governments.

But if they borrow money, the Wildrosers are going to shriek, and when that happens the Pavlovian media will bark and proudly conservative Albertans will fuss. If the government doesn't, though, their choice is either to steal from our retirement fund (because, people, that oil's not gonna be there forever) or let the place run down like a Third World slum with a big bank account.

That might suit the Wildrosers, because it provides a bogus an argument for privatization, but it ought not to work for the Redford Tories, who insist they are committed to fair public services.

Then there's the matter of Klein's ridiculous flat tax -- which is semi-sacred in certain circles around here -- which benefits the extremely wealthy and penalizes the middle class at the cost of at least $1.5 billion a year in foregone revenue.

Well that -- no matter what is written on the back of Smith's hand, or wherever she keeps her notes -- is just nuts, especially with interest rates as low as they are right now. We really need to stop doing it.

So if Redford and her Tories want to solve the biggest political problem they are going to face -- which won't be Rosehipsters yelling "culture of corruption" -- they need to address the problem of how to build up this province, as the late Mr. Lougheed, Alberta's first PC premier, unquestionably did.

So they really should pause a moment during their scrap over whether members of Harper's Wildrose Party of Canada should keep their automatic influence over PC affairs to start thinking about how to encourage a mature discussion about debt, deficits, fair taxation and the way we run this place.

This post also appears on David Climenhaga's blog, Alberta Diary.

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