Um, all of the above?

Rarely has the deficit's ability to distort and confuse the national debate been so well displayed. As the budget approaches, we are confronted with a series of false oppositions, usually drawn in the most apocalyptic terms: save social programs or cut the deficit, higher taxes versus social Darwinism, compassion or efficiency, all presided over by the granddaddy of false oppositions, left versus right. Best of breed goes to Morningside, which last week debated the question, "Can we afford to be Canadian?"

Yes, of course we can, unless we define a Canadian as "one who lives beyond his means." That this sort of thing is said in all seriousness is at least partly the fault of us debt hawks. Because the consequences of failing to rein in a runaway debt are undoubtedly severe, people tend to assume that the measures needed to avert a debt crisis are equally severe. But if you are standing at the edge of a cliff, it does not require any great exertion to step back from the precipice. Stepping forward, that's a drastic measure.

So perhaps some clarification is in order. We are a rich country, one of the richest the world has ever seen. We can afford a big, expensive, even wasteful welfare state. The country I want to live in would have, by all historical standards, a big-spending, high-taxing government. It just wouldn't be quite as big-spending as it is now, though for the time being it would be no less high-taxing. It would not mean tearing down the safety net if governments combined spent, say, 40 to 45 per cent of GDP instead of 51 per cent.

We should not confuse cutting spending with cutting social spending, and we should not confuse cutting social spending with destroying social programs. Even in the most radical proposals for cutting spending, social programs would take a less-than-proportionate share of the cuts. At the end of the day, federal spending would be more heavily weighted toward the social sphere than before. That is as it should be. However deep our fiscal problems, they do not (yet) require us to abandon or even diminish our obligations to the poor. Indeed, if we were serious about cutting spending in less essential areas, we could spend more on those who really need it.

Far from a slash-and-burn exercise, then, this ought to be the occasion to rededicate ourselves as a nation to the protection of the most vulnerable of our fellow citizens. Much time has been wasted in theological debates over whether the aim of social-program reform is to save money or improve the programs. Why need these conflict? If, for example, social-assistance benefits were not reduced at such punitive rates against recipients' earned income, fewer people would be trapped on welfare. This would undoubtedly save money over time, but would anyone argue this was not an improvement?

Of course, letting the working poor keep more of their benefits might cost more in the short run. Which is why it was such a huge mistake for the government to concentrate on hitting short-run deficit targets, rather than setting out a coherent multi-year program of spending cuts. The Liberals thought their deficit targets would be so easy that they wouldn't have to cut spending: that's why they put so much emphasis on them. Several hikes in interest rates later, they now find themselves caught on their own cleverness, forced to make big, hasty cuts in spending to meet their suddenly difficult targets, or lose all credibility. Had they focused instead on redefining the role of government in a way that would sharply cut spending in the medium term, markets would have been more forgiving of any extra costs incurred upfront.

Pressing as it is, the deficit is really beside the point, as is the debt. Even at this late stage, the only reforms needed are those that would be in order even if we had no debt. Let's make that stronger, a maxim for legislators: Do nothing in the name of controlling the debt that should not be done in its absence. But if it takes a fiscal crisis to get you to do what you should be doing anyway, well, whatever.