Newfoundland and Labrador is up the financial creek, according to Charles Lammam, an analyst with the Fraser Institute, in a new opinion piece with a couple of his colleagues.. The cause is excessive government spending. "Had the government restricted program spending increases since 2004/05 to the combined rate of inflation and population growth, Newfoundland & Labrador would now have a small surplus, not a large deficit."
The fundamental problem with
Newfoundlandand Labrador’s approach to public finances over the last decade is that the government increased spending during the good times as though they would never end. When resource prices ultimately fell, the province found itself at an unsustainable spending level.
The problem is that over the last decade, Lammam and the rest of the folks at the Fraser Institute have consistently told us that Danny Williams and Kathy Dunderdale were the finest financial managers in the country among the provincial premiers. That's significant because they are the premiers during the period when Lammam now says the government was spending way too much. The two ideas don't fit together.
It's not as though we suddenly learned things we didn't know at any point over the past decade. Some of us have been criticising the excessive increase in spending by the provincial Conservatives since 2006. By the time we got to 2009, Williams had admitted government spending was unsustainable. Dunderdale admitted the same thing every year she was in office. It's not like the folks at the Fraser Institute could have missed the repeated admissions of fiscal mismanagement.
Yet they did.
Which Fraser Insitute conclusion should be accept?
The Fraser Institute has produced such laughable "analysis" of Newfoundland and Labrador over such a long period of time that we can only conclude their most recent observations are a fluke. What we should do is be extremely wary of pronouncements from folks like Fraser who can look at the same data and come to diametrically opposed conclusions. There's a fairly obvious problem with the way they do their analysis.
And anyone pretends to be a psychic forecaster who says "never saw that coming" is someone we should just laugh at.
This is a revised version. The original incorrectly identified the National Post as the source of the Lammam opinion piece