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COMMENTARY: Islanders need a debt plan, not a debt committee

If the Lantz government wants advice on its debt, here’s some for free: Stop borrowing and start paying it back. Instead, the government has launched a debt and risk advisory committee. Four financial experts will spend the next two years reviewing borrowing strategies, setting risk parameters and recommending investment policies for the deputy minister of finance.

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Notice what’s missing? Any plan to pay down the debt.

The committee claims to be the “final piece” of the government’s debt management strategy and sets two targets: Keep net debt below 40 per cent of GDP and keep interest costs below 7.5 per cent of revenue.

Those targets are a trap.

A debt-to-GDP target isn’t a plan to pay off debt. It’s permission to keep piling it on. If the economy grows at all, the government can borrow hundreds of millions more every year and still hit its target. The........

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