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A Federal budget looked more like Christmas giving Dollars & Sense Guest Contributor 29 | Thursday, March 31, 2016 | OAKVILLE BEAVER | www.insideHALTON.com pparently we had a federal budget last week. It seemed more like Christmas. Our new Minister of Finance, Bill Morneau, dressed as Santa Claus landed on our roof top and slid down the chimney bearing gifts for all. Throw nancial caution to the wind, this is the season for giving. To help celebrate Christmas in March, nicely wrapped gifts were placed under the tree for family, friends, and even strangers. If you live north of the 49th parallel you received something special. Don't get me wrong, I enjoy the season of giving as much as any of us. My problem is that little nagging question about who's going to pay for all this? Our new government's initial plan was to invest in Canada with signi cant infrastructure projects. Things like new highways, subways, and other public transit. Tangible bene ts that would add to the Canadian economy in the years to come. Very little of the spending was directed at investing on infrastructure. Money was spent on programs, a little here a little there. The second part of the initial plan was there would be a de cit of $10 billion. The Peter Watson logic appears if $10 billion of overspending is good then $30 billion of over-spending is even better. Lots of gifts and lots of de cit Under that formula, the budget gets a perfect 10 out of 10. Lots of gifts and lots of de cit. Regardless of how hard I try to understand this I keep coming up short. One of my thought processes has been: if I handed in this type of a budget back in my school days, how would an economics professor have graded my paper? If I was lucky, I could hope for an F . On the extreme side, this type of economic logic might have been cause to expel me from the course. This is not a political statement. I think the country was due for a political change and democracy works better when one party does not retain power for too long a period. I have great respect for our new nance minister and the new government's fresh strategy of giving a diverse cabinet more say in governing our country. Most of the handouts in our recent budget could be classi ed as admirable. You could make a strong argument some of these causes should have received even greater government support. The issue is not the worthiness of these government initiatives. It is simply a matter of nance. The world we live in is based on cash ow. That applies to individual investors who save in order to have cash ow to spend, and as they see t. Cash ow the guiding force Cash ow is the guiding force to how companies manage their own resources. It also applies to all levels of government. The government has been warning overindulgent consumers about overspending because of the nancial carnage that can occur when debt gets out of hand. Some Canadians will go bankrupt and that inevitable tragic result will happen sooner if interest rates start to rise. If I was a member of the federal cabinet, I would seek out some of the best economic minds in our country and ask them to form a committee to examine at what point Canada has to declare bankruptcy. That is not a doomsday prediction, it is simply arithmetic. Debt comes with interest and interest has to be paid. The consequences of having too much debt with unmanageable interest payments is bankruptcy. We know this to be true because we have seen it in other jurisdictions we refer to as developing countries. The laws of economic gravity mean if Canada does not start acting more scally responsible, we have the potential of bankruptcy. -- Submitted by Peter Watson, MBA, CFP , R.F .P ., CIM, FCSI., Certi ed Financial Planner For more news, visit insidehalton.com/oakville-on. `Like' the Oakville Beaver on Facebook. Introducing a member of our family, here to help your family. We're proud to welcome Robert Csele to our team of caring professionals. At your time of need or when planning ahead, rely on Robert for the personalized solutions you need. To start planning, call Robert Csele for a FREE Information Kit! 905-842-2252 by Arbor Memorial Arbor Memorial Inc. Look for us on Facebook FREE $ Visit www.oakviewfuneral.ca for a virtual tour of our funeral home. Oakview Funeral Home 56 Lakeshore Road, W., Oakville Family Owned. 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