The Minister of Finance, Ralph Goodale, may scoff at NDP Leader Jack Layton's numbers on the cost of reducing the federal debt to 25 per cent of GDP over 10 years (Focus On Paying Down National Debt Draws Mixed Reviews -- March 24). But he has not told us if the government plans to hit this new target, as the Prime Minister tackled the deficit, "come hell or high water."
If the economy failed to grow at all over the next decade, then it would indeed cost more than $200-billion in debt repayments to reach the new target. But if the economy grew just a bit faster than expected, or inflation was a bit higher, we could reach the new target even while running deficits.
We don't know the cost of hitting the target because we don't know how fast the economy will grow over the next decade. The target is meaningless if we don't know how serious the government is about reaching it.
What we do know is that a major focus on paying down debt through budget surpluses rather than growth in our economy will come at the expense of the public investments we need to make in our economic and social future.