Photo Credit: Les Bazso, PNG

The Vancouver School Board is trying to find $18.12 million in savings in order to balance the budget for the 2010-11 year. For their part, the VSB has blamed the province for downloading costs onto the schools. Increases in payroll costs in the form of employee benefit deductions, such as Canada Pension Plan, Employment Insurance, and Workman’s Compensation Board, are all straining the education system.

Because of this, Education Minister Margaret MacDiarmid has dispatched a “special adviser” to Vancouver’s board of education to try and find savings where the school board has failed.

“This is a serious situation. We felt it was important to take action,” Ms.MacDiarmid said yesterday in Victoria.

“They [members of Vancouver's board of education] have said they’re having trouble managing with their budget. They are talking about cutting programs they say are going to jeopardize learning,” she added.

“There are 50,000 students in Vancouver, and we owe it to them to make sure their educational outcomes are the best they can be.”

This kind of language has infuriated the VSB chair Patti Bacchus, who implied it’s ridiculous to believe the province can find $18 million that they missed, and is further annoyed at the shifting all of the blame onto the Vancouver school board.

Ms.Bacchus said she was not informed by the ministry of education about the appointment of B.C.’s Comptroller General, Cheryl Wenezenki-Yolland, who also looked for savings last year in BC Ferries and BC Rail.

“I hope she’s not considering this some kind of game, a political game,” Ms.Bacchus said.

But the education minister certainly seems to be playing some kind of game, particularly in her choice of words.

“The Vancouver board of education is either unable or unwilling to manage its resources to protect the interests of students,” Ms.MacDiarmid said in a press release.

Ms.Bacchus rejected those statements.

“It is inappropriate for her to make those allegations,” she said. “I find it insulting.”

Part of the problem comes from within the School Board itself, as the cost of teacher salaries and administration has risen despite the economic slowdown. But the idea that the province can find $18 million in savings that the VSB could not is a direct challenge to the board’s diligence in finding a solution to the deficit. It certainly comes off as being arrogant, coming from a government that is running a substantial deficit of its own by breaking its own no-deficit law last January.

The BC Liberals’ new-found “green” ideology is also straining school boards across BC, because the province has mandated that the entire public sector has to become carbon neutral this year. For many school boards, that means purchasing ridiculous “carbon offsets”.

For school boards across BC they see this as another example of giving with one hand and taking away with the other, particularly when it comes to things like the carbon tax, for which boards have to pay a heavy price in heating and electricity costs. To have the province then turn around and accuse the boards of being unable to properly balance their budgets is understandably infuriating.

Photo: Reuters

There are two entirely different articles in the media today, which are essentially about the same thing. The Financial Post has a somewhat optimistic article about how Ottawa’s budget shortfall has shrunk, while the CBC is reporting quite the opposite. The CBC says that the federal deficit has grown $300-million in January. But in the Financial Post, it reports that the deficit for January is only $265-million.

The confusion is in the difference between the focus on reporting. The CBC is focusing on the fact that Ottawa added $300-million in overall debt to the fiscal deficit, while the actual budget shortfall for January is only $265-million.

Then the Financial Post compares the $265-million deficit from this year to the small $118-million surplus from a year ago. But if you flip to the CBC article, they report “Ottawa was running a $500-million surplus at this time last year.” So which is it? Were they running a $118-million surplus at this time last year, or a half billion dollar surplus?

The CBC also says that the September projection of a $56 billion deficit has been “little changed” by the March budget that announced a deficit of $53.8 billion. But the Financial Post focuses on the fact that with two months left to go in fiscal 2009-10, the deficit is $39.6-billion. If we posted a $265-million deficit for January, it stands to reason that we could finish at least $12-billion under the projected deficit by the budget. That’s an entirely different story than we’re being told by the CBC.

At the end of the the CBC article, they report that Ottawa has lost $17.7 billion in revenues compared with the previous year, with corporate tax receipts accounting for about one-third of the drop-off. But the Financial Post reports tax receipts climbed to $17.6-billion, or 12.4% in January on a year-over-year basis. This is the first such increase since the recession began its effects in October of 2008. The Financial Post reports that revenue from personal income taxes climbed 0.9%, while corporate tax receipts were up by 73%.

But where the Financial Post points to the 73% increase in corporate tax receipts, the CBC uses the less impressive figure of a $1.7-billion increase, and attributes it as a temporary gain “due to year-end settlements.”

The only parts that are exactly the same is the admission that roughly $17-billion of the deficit is attributed to the government’s 2-year, $48-billion economic stimulus plan.

For Employment Insurance, the CBC reports that EI payouts alone have increased by $5.1 billion or 41.4% in the first 10 months of the fiscal year. The Financial Post, on the other hand, finds a silver lining here. The payout of EI increased in January by 15.4%, but is the smallest increase in a while, with the three months previous ranging from 20% to 57%.

Across Canada, the number of beneficiaries on Employment Insurance notched a fourth month of decline in January, with 698,800 EI beneficiaries, down 47,700, or 6.4 per cent, from December.

There are a lot of numbers being thrown around, but how those numbers are used seems to greatly affect the way the economic situation is being presented to Canadians.

This is reminiscent of the excellent video from April 24, 2009, in which a YouTuber explained in pennies just how bankrupt the United States is. The above video also does a pretty good job, since people tend to visualize a lot better than they conceptualize. Even without the visual aid, it’s easy to demonstrate just how meaningless $807 million in savings is with this government. They’re spending $179.4 million just to plan and prepare security for this summer’s G8 and G20 summits in Toronto in which they will discuss things such as reducing the public debt.

h/t SDA

If it’s not one thing in this province, it’s another. I’m beginning to wonder if the BC Liberals are deliberately making it so expensive to live in British Columbia, that the riff raff are forced to move to a cheaper province, hence killing two birds with one stone.

Not only do we have a carbon tax in this province, on top of the highest baseline gasoline prices in the country, but it goes up every July 1. Then we have mandatory medical services premiums which, for a family of three or more, costs an extra $1,368 in taxes. Those rates were raised for this year as well. Then there’s the new Harmonized Sales Tax, due to kick in on July 1, which will likely heave our housing market into the dumpster. Not that it matters anyway, since the average cost of a home in the lower mainland is already beyond the reach of the average person.

And if you live on the islands, it’s bad news for you. BC Ferries just raised their fares again, up by $1.75 more between Vancouver Island and the mainland. They even have a helpful chart on their website showing just how high fares have been raised since the BC Liberals turned it into a semi-privatized monopoly in 2003.

BC Hydro will be adding a little more pain to the equation if the Crown corporation has their way with us. The company will be seeking a 9.11% rate hike on electricity to cover new infrastructure costs, and provide a larger revenue cut for the BC government coffers.

BC Hydro says the increase would apply to all rate customers, whether residential, commercial, or industrial. The application will be filed with the BC Utilities Commission and should be approved for April 1.

That hike would increase your hydro bill by up to $0.25 a day on average, or as much as $7 a month. This, on top of previous increases totalling 11% over the past two years. The pain won’t end there either. The budget projected additional rate increases for the next three years of 6%, 12%, and 6%. The plan is to score a massive one-year increase in capital spending in order to repair hydroelectric dams and generating stations at a cost of $1.6 billion in 2011, almost three times the expected $566 million cost in 2010.

Although BC electricity rates have been fairly stable during the BC Liberal government, increasing just 17% from 2000-2009 while average rates in the U.S. have gone up 41% during the same time period, that could all change if BC Hydro gets its way. Documents from the Tuesday provincial budget project increases that would raise rates 33% by 2013 if all hikes are approved by the Utilities Commission.

The infrastructure upgrades include a 500-megawatt expansion of Revelstoke Dam, two turbines totalling 1,000-megawatts at nearby Mica Dam, and other regional upgrades.

But that’s not the full story here. The government is facing structural budget deficits until 2014, and we learned today that the BC Liberals pilfered the $778 million surplus from the optional insurance side of the public auto insurer, ICBC. The government will use $487 million of that money this year, lowering the actual posted deficit from $2.19 billion to $1.7 billion.

The Hydro rate increases give the province an increased divided, up to $150 million more each year for the next three years. That has to have figured in the massive 9.11% rate increases.

Photograph: Darryl Dyck, Canadian Press

The Gordon Campbell budget was released yesterday, but I needed a day to think about the impact of the announcements. Nothing really comes as much of a surprise, and the Liberals put the money into the two areas that they would have been crucified had they ignored: health care and education. But even in those areas there could be some improvement.

In some respects the budget is a restrained stimulus-free version that the federal government doesn’t have the political capital, or the political courage, to release on Thursday. Finance Minister Colin Hansen presented a budget with significant cuts to government workers, and tightened the belt toward a balanced budget, but not until 2013.

Although the targets are for 4,142 fewer government workers by that date, a 13% shrinking of the civil service, this budget is still one with record spending. With the September budget update that put the government in a deficit position of $1.6 billion, the province has been slowly letting go of people in the bureaucracy.

The Liberals had made numerous cuts to spending on the road to the Olympics, but that was to ensure that nothing got in the way of their Games glory. In August the government said it was forced to close 13.5 operating rooms in the Vancouver Coastal Health Authority from September of 2009 until the end of the Olympic Games in order to meet the challenges of their massive budget shortfalls. They postponed 5,800 surgeries in areas such as neurosurgery, vascular surgery, ortho trauma, ophthalmology and general surgery. They also reduced operating-room and hospital-ward staff by an estimated 112 full-time-equivalent jobs. And they cut 13 anesthesiology positions.

The perception of a struggling health care sector and strained education system left the government with no choice but to add spending to those areas. Expenses grew by $460 million since the last budget, including a further $105 million for school districts, $31 million for post-secondary institutions and $34 million for health authorities and hospital societies.

For all of the BC Liberals’ tough talk on no deficits, in which the Campbell government breached their own legislation last February, multiple deficit projections will accrue public debt by 2013 that will reach levels seen under the NDP in the late nineties.

Unfortunately, much of the increased spending in education doesn’t address the root problems that have caused record numbers of school closures in British Columbia and teacher layoffs during the past decade. Instead it’s going to a back-door universal daycare program for full-day kindergarten, and salary increases for teachers to keep the teacher’s unions happy. That means that school administrations will still be struggling with basic needs like transportation costs, increased Medical Services Premiums, and the expected hit from the July 1 HST.

According to Mr.Hansen’s latest forecast, B.C. will sustain deficits of $1.7 billion, $945 million and $145 million in the next three fiscal years, from 2010-11 to 2012-13, before returning to expected surpluses thereafter. That would bring B.C.’s public debt from $36.1 billion in 2001 to $55.9 billion by the end of the budget forecast, an increase of 35.4%. Moreover, that debt burden puts $14,300 per capita on B.C. residents, only $1,300 less than our per capita federal debt.

The other problem with the budget forecast is in repeating the mistakes of the federal government’s own optimistic revenue and growth forecasts. Mr.Hansen expects an annual revenue growth of 4.9%, but there’s little indication that British Columbia will continue to recover from the recession quickly enough to make that growth, or that the HST won’t throw a wrench into those plans. Not only will all HST revenue go into health care [no "stimulus" there], but the increased taxes on medical services premiums will also increase the tax burden on the base. The carbon tax is also slated to go up once again on July 1, the same day the HST will kick in.

And now that the Olympic party’s over, and the Liberal government became the photo-op beneficiaries of a record 14-gold medals performance by our athletes, they’ll be rewarding them by disowning the podium altogether.

The Canadian Centre for Policy Alternatives, an organization that has never heard of a spending program it didn’t like [unless it's a military program], has suggested that Ottawa one-up last years spending orgy increase of 14.1% over 2008. The $56 billion deficit forecast for this year is pretty bad, but the CCPA proposes an even larger one for next year, up to $65 billion deficit, in order to sustain “stimulus” and jobs creation.

Just to put things in perspective for you, the CCPA is calling for a 12.6% increase to the total public debt for a single year in order to ensure everybody has stimulus money for 2010. Currently, every man, woman, and small child who crawls along the carpet owes $15,606 because of our public debt. The CCPA believes that spending $65 billion, and increasing that per capita burden by $1,970, would be better than cutting taxes, or simply tightening the belt.

Let’s think about that for a moment, shall we?

For the sake of argument, let’s assume I have $1,500 of credit card debt. Under the circumstances of a bad economy, the best I can do is make the minimum payment, which is barely more than the interest amount. Over the span of a year, I could make the minimum payment on my $1,500 debt without ever really denting the principle amount. I’ve done nothing to stave off my liability, and everything to maintain a cyclic debt payment that becomes a part of my overall expenditures.

Adding a per capita burden of $1,970 is even worse, since the tax base isn’t made up of the population of 33 million people. It’s a much smaller amount, and when you consider the progressive tax system, that amount is even smaller, since the middle and upper classes pay the most money. But wait, it gets even worse.

The population that is over 65 years of age, the boomer generation, will continue to rise for the next 50 years as the tax base shrinks. The only means of sustaining the current government spending and programs is by incurring more debt, or by importing more workers. And even immigration won’t be able to solve all of the problems created by debt.

There’s no reason to believe that borrowing $65 billion in order to distribute stimulus money into the economy will provide a per capita benefit approaching anything close to $1,970. Beyond that, just as it does with your credit card, Canada increases its overall interest payments exponentially. In 1995-96 before the Paul Martin cuts that brought the deficit under control, interest payments peaked at $49.4 billion when the debt bottomed out at around $560 billion. That’s practically the amount of debt accrued just in “stimulus” spending this year.

The CCPA budget calls for things like $10 billion in Employment Insurance giveaways, environmental stimulus, and a federal carbon tax [if you can believe it]. To offset those costs, it advises cutting the military for $6 billion over five years, which would probably restore Defence back to the levels of 1.1% of GDP from the Liberal era.

There’s nothing to be gained by accruing more debt and gouging the military just after the federal government has restored levels to the point where we can actually sustain comprehensive long-term missions and emergency foreign aid for natural disasters like the Haitian Earthquake.

The first rule of holes is stop digging. We need to tighten the belt, weather the last of the economic storm, and then restore the budget to balance. If we don’t do that, we’re only setting ourselves up for a much worse crash in the future.

The National Post just completed a four-week feature of proposals to cut federal spending with the goal being to find $20-billion in cuts to balance the budget by 2013 or sooner. Incredibly, even with these extremely bold cuts, it would still take until fiscal 2013-14 to do it.

As David Akin writes in the Ottawa Citizen, cutting spending isn’t as easy as it sounds. Every new MP, Finance Minister, and Treasury President thinks they can come in and cut the fat, but almost none of them ever succeed.

The last time a government managed to cut a significant portion of the budget, was the 1996 Paul Martin Liberal budget that contained $11.7 billion worth of cuts. Some were good, some were bad, but they did manage to get the budget under control again. Of course, we mustn’t ignore the $54 billion surplus of Employment Insurance that the government used to pay down the debt.

Although it’s become more clear than ever that Canada’s deficit will spiral out of control unless spending is reigned in or taxes are raised, the Harper government is “spending the course”. We’ll get to see on Thursday what this “road map” back to a balanced budget will look like [some time in the year 2020].

Spending under Finance Minister Jim Flaherty, writes David Akin, has been almost uniformly unrestrained. He increased spending in the first budget of 2006 by 6.3%, in 2007 by 4.8%, and in 2008 by just 2.6%. But when the recession hit he threw caution into the wind and splurged for a 14.1% increase over 2008 with an unprecedented “stimulus” package.

So what would I cut? Looking at Terence Corcorans graph, I would definitely agree that cutting the Southern Ontario Regional Development Agency for $900-million would be a great start. This was a program owned solely by the Harper government. Unfortunately, this whole “stimulus” has been deeply integrated with the creation of new regional programs and agencies.

Killing the carbon capture program at a $1 billion savings is also a good idea. The various other regional development agencies and tax credits in Atlantic Canada could be axed for $3.4 billion. There’s no question the eHealth fiasco is a waste of money at $1.5 billion. The $9.4 billion cuts to the civil service is an inevitable and integral part of balancing the budget as well, and precisely what Paul Martin did. The elephant in the room is, of course, the equalization program and federal transfers, shaving over $25 billion over four years.

But $4.33 billion in cuts to the military over four years? Surely we don’t want to go back to a time where our military is underfunded and stretched to the breaking point again, after just coming out of decades of darkness? Even at current military spending, we’re due to fall behind on inflation alone.

Military spending in Canada is an embarrassing 1.38% of GDP from 2008, good for 120th place in the world ranking. We’re only doing 0.2% better than we were in 2005 under the Liberals, when we were in 130th place.

What other country in the G8 would spend such an abysmal level on their military? Only Canada can get away with it due to their proximity of the United States.

Of the G8 nations, the allied powers from the second world war all spend the recommended 2% minimum of GDP on defence: France [2.6%]; Russia [3.9%]; United Kingdom [2.4%]; United States [4.06%]; while Germany [1.5%] and Italy [1.8%] still exceed Canadian spending despite post-war restrictions to their military. And while Japan only spends 0.8% of GDP, it’s still twice that of Canada’s budget.

I wrote a piece last year identifying $4.98 billion in program spending cuts, including a suggestion to axe the following:

1. CRTC $55.6 million. What service does it provide other than ensure cell phone rates are prohibitively high?
2. Citizenship and immigration $667 million on an “integration” program that clearly doesn’t work.
3. Refugee Board $15.2 million. Eliminate appeals program.
4. Status of Women $25.3 million for affirmative action programs.
5. Human Rights Commission $22 million by eliminating this Stalinist legal authority.

Then of course there’s the $1.1 billion CBC subsidy and the $80 million long gun registry that nabbed the dangerous desperado Toronto Star columnist Joe Fiorito.

I took a little bit of heat in the comments of the National Post over my recent claim that Michael Ignatieff hasn’t forwarded a vision for Canada since he came back to live here, and no amount of consulting with students and so-called “experts” is likely to make that happen any time soon. The reason I’m speculating in that way is because when he was asked what his own solution to the financial problems in Canada would be, he responded:

“It’s not my problem. It’s Stephen Harper’s problem.”

Well, he’s half right. It isn’t his problem right now. But if he wants it to be his problem, he might want to let everybody else in on the magic bullet that is going to get him there. His current non-committal answers are coming off as phony as Stephane Dion suddenly pretending not to understand the English language in order to dodge the same exact question posed to him when he was busy not articulating his economic platform.

But quite a few readers at the Post mistook my reading of Michael Ignatieff’s emptiness as a sign I was defending the Conservative’s own equally empty plans to reduce the debt. Without raising taxes, even.

Those who have read my writing for longer than a few days know that I don’t give any quarter to the Conservatives on their fiscal record. They have failed miserably in this regard, and Michael Ignatieff was absolutely correct about one thing he said on his little “comfort zone” tour. The Conservative Party did spend their way into deficit before the recession hit or could have been responsible for their own revenue shortfalls. I know. I was there to see it happen.

It’s also pretty clear by this point that the GST cut of 2% was an unmitigated disaster. And yes, Peter Donolo is behind Strategic Counsel but I don’t think you need a poll to read the tea leaves in the consumption tax affect on the federal treasury. The 2% cut to the GST gouged $15-billion from the coffers, and I’ll be damned if you can find a single Canadian who will swear up and down about how much that tax cut has changed their lives. It certainly can’t be worth the current figures coming out of the PBO this month, a spine-chilling tale of $19-billion a year structural deficits.

So, sure, Stephen Harper can shuffle the cabinet, and make big promises about the Canada Action Plan, and the stimulus, and dispatch Stockwell Day do yet another spending review in Ottawa which, by the way, should have been done the moment Paul Martin vacated 24 Sussex Drive. But until we actually see some spending restraint, cuts to programs, cuts to the civil service, and a cutoff of federal transfers to the welfare provinces, as a basic start, there is no point speculating that this government has a plan that’s even remotely likely to succeed.

And speaking of Paul Martin, let’s hope that this time the cuts don’t come at the expense of our military. If you think it can’t happen on the Conservative watch, just wait and see how loud and petulant the opposition becomes when entitlement programs are even hinted of being cut back.

Prime Minister Stephen Harper said today that he has “no regrets” about posting a deficit, arguing it was the best move under the circumstances, and noted that several measures the government has taken will benefit the economy in the longer term.

This is the current M.O. the government is taking, and it’s an interesting bit of historical revisionism to be sure. While most governments have “regretted” posting deficits owing to the tough “economic circumstances”, this one seems to revel in it’s fiscal insolvency. It’s strategy now seems to be less about focusing on the necessary evil of stimulus spending, and more about getting down to the brass tacks of shameless party self-promotion while handing out gigantic novelty cheques.

And truly, little has been more dubious as to the economic stimulus benefits as ice hockey arenas in Conservative ridings. What’s particularly distasteful about using the concept of Keynesian economics to hand out recreational centres is outlined in an article in the Financial Post, which argues that continuing to stimulate as we exit the recession will be destabilizing rather than stabilizing.

The whole stimulus extravaganza has led to some chilling similarities between the Conservatives, and the former Chretien Liberals, as observed by Macleans Aaron Wherry. John Baird rose in Parliament recently to defend the Conservative blurring of the lines between government and party by saying:

“Here is what the Prime Minister said,” the Minister continued. “‘Listen. We are the government. I don’t see why we can’t try to get credit for what we do. I hope we do so. There is nothing to be ashamed in that.’ Do members know who said that? It was Prime Minister Jean Chrétien.”

Unwittingly, Mr.Baird made a rather serious gaffe. By trying to explain the rank hypocrisy of the Liberals for complaining about the Conservatives doing precisely what they had done before this government, the two are forever entwined in a kind of corrupt matrimony. The party that gained the votes of Canadians like myself by promising to be nothing like the Chretien Liberals, have come full circle by “wrapping himself in ideals of a man who represented everything the Prime Minister once despised.”

The fallout from wrapping the Conservative party in great big liberal ideals is they are now bearing Liberal fruit. And as though there wasn’t enough heat on Senator Leo Housakos, he passed the buck onto some anonymous colleague he described as “somebody in my own caucus,” and added, “I’m going to take care of him soon.” What is this, the Sopranos?

Meanwhile you’ve got the Prime Minister continuing to tell us that all of this was beyond his control, refusing to be regretful about anything, singing the praises of stimulus, and saying that the “focus has to continue to be on stimulating the economy.”

“I actually do think we are in a rare period … where deficits are not only necessary but actually advisable,” said Harper.

We’ve passed through the looking glass, Alice, and I really don’t like what I see on the other side.

Even if it were not for the fact that President Barack Obama has turned his eye to a devastating energy policy that could further reduce domestic manufacturing, or a health care reform that “significantly expands the federal responsibility for health care costs”, the administrations ill-considered “stimulus” bill has the federal public debt sitting on a staggering precipice. The deficit crossed the trillion dollar threshold on Tuesday, achieved in just half a year.

The jobs promised by Mr.Obama are nowhere to be found. The stimulus bill aimed at keeping unemployment at 8%, has risen to 9.5% and is heading higher. This is the highest level of unemployment since 1983, for some people it’s too long ago to even remember. But the advisers who crafted the bill, Christina Romer and Jared Bernstein, have by contrast done quite well for themselves. And even as the country falls further and further into the tank, Ms.Romer talks about how much worse it would have been without the stimulus. The administration has even claimed that it had “saved” 150,000 jobs, but even if one accepted such a dubious number, it’s nowhere close to the promises made back in January during the “hopenchange” movement.

The rather insane thing in all of this, is the idea that Americans might be facing the sequel to the first horror movie: Stimulus II. Congressional Democrats have begun to talk about a possible second bill, explaining that the first one wasn’t implemented properly. But by doing so, does that not acknowledge that the first stimulus round did nothing to provide jobs or stimulate the economy? Some banking institutions and those “too big to fail” got rescued, but little else has been achieved in the short term. And even if we admit that the first one is too early to recognize any potential benefits yet, would that not indicate that a second stimulus bill would be imprudent at this time?

As Phil Kerpen writes, this isn’t really even the second stimulus plan being floated in Washington. George Bush also tried his own stimulus in his final year, and we all know how well that worked out. $152 billion was spent, and the economy still went into the sewer. The main problem with the concept behind a political “stimulus” model for a free market economy, is that all you’re doing, at best, is moving money around. We now know that the Obama plan was far too optimistic and unrealistic. We know that while some of the money was spent by the government, vast portions of it was simply thrown out the door without oversight, in the hopes that the speed of delivery would help. And finally, we know that ultimately all that’s been accomplished is a heavier burden on the public debt:

It’s actually pretty simple economics. The government does not create resources by spending; it simply moves them around. Every dollar the government spends has to come from somewhere, but the only three options all make people poorer. Higher taxes take money out of people’s pockets, and deny them the freedom to spend, save, or invest that money according to their own values. Simply printing money is inflationary, and destroys the value of every American’s savings, slams people on fixed incomes with higher prices, and creates a huge hurdle to new investment.

The Congressional Budget Office forecasts a $1.85 trillion deficit for this year, and any more spending would only pile the debt even higher. In the long-run, rising interest rates will make it more difficult to pay back the public debt, hurt business and economic growth, and ultimately defeat the logic behind a “stimulus” plan in the first place.