In today's Globe and Mail newspaper, national affairs columnist Jeffrey Simpson writes about economic stimulus spending viewed through a demographic lens. The issue he raises is that the economic hole of indebtedness that we're creating now will be worsened by the baby boomers departing the workforce and the increasing costs of health care to seniors. The issue is political procrastination.
Drawing on the work of Pierre Fortin of the University of Quebec at Montreal, a scholar that Simpson describes as one of the very best public finance economists in Canada, Simpson summarizes the costs of political procrastination, as we fail to prepare for the inevitable baby boomer retirements. As he notes, "Aging isn't a maybe or something that wise governance or chance can avoid. We've known about the fiscal impact of aging for a long time . . ."
We may know about it, and we may know what kind of things will better prepare North America for this demographic change, but still there is a needless, even irrational, delay of action.
Simpson closes his piece with this . . .
"Who in politics is talking seriously about this demographic fact? Which politicians have you noticed saying: We need to get the federal budget balanced, and then run surpluses as fast as we can after the recession ends, so that our country will be ready for what Prof. Fortin properly calls the “fiscal squeeze? . . .
The long-term options include going into long-term debt, raising taxes or cutting spending. Today's political leaders say they will contemplate none of the above. They are punting for their political lives. But Prof. Fortin is right: 'Procrastination conceals a trap. It will only make the problem bigger over time.'”
Of course, "our" politicians don't necessarily see it as procrastination. They probably would define it as a sagacious delay - "punting for their politcal lives" as Simpson writes. But, it is procrastination of the worst sort, with a focus on short-term gain that results in long-term pain. It is, from my perspective, the same sort of self-serving behavior that helped create (or simply "created") the recession in the first place.
In the most recent meta-analysis of procrastination-related research, Piers Steel (2007) summarized the definition of procrastination this way: "to procrastinate is to voluntarily delay an intended course of action despite expecting to be worse off for the delay" (p. 66). To be fair, perhaps the politicians involved don't have an intended course of action, hence it's not procrastination, it's simply ignorance. Either way, we've got a political problem that has long-term consequences.