Much too much has undoubtedly been made of the news that the federal government did not run a deficit this year, for the first time in nearly three decades. The gates of hell do not open if a government fails to balances it books in any one year; neither do heavenly choirs sing if it manages the trick but once in thirty.

What matters, of course, is the debt. A balanced budget is at best a milestone on the way to putting the nation's finances on safer ground. At that, a more significant milestone was passed the year before, when the debt-to-GDP ratio began to fall, since the size of the debt is only meaningful relative to our ability to finance it.

Still, to have cut the deficit from $42-billion to zero in four years is an achievement worth recognizing. But you'd never know it from the dismissive catcalls that greeted the Finance minister's historic announcement. It was all done on the backs of the taxpayers, said Reform. It was all done on the backs of the poor, said the NDP. It was all done on the backs of the provinces, said the premiers.

We are left to conclude that the federal government deserves no credit at all for this performance. At best, say the critics, it shifted the burden of deficit reduction onto others, leaving its own empire largely untouched. Can this really be true?

Let's take the Reform critique first. The party delights in pointing out that total revenues grew by $31-billion between fiscal 1994, the last year of the ancien regime, and fiscal 1998. Spending, on the other hand, recorded a decline of just $11-billion. Ergo, they claim, higher taxes account for three- quarters of the reduction in the deficit. The Liberals took it all out of the hides of the taxpayers.

This is just silly. Taxes, like the debt, have no meaning as mere dollar figures. Is the $147-billion the government collected last year a lot of money, or a little? The only way we can tell is by placing it against some sort of relevant yardstick: namely, our collective capacity to pay our taxes, for which GDP is the usual proxy.

There's no doubt that the Liberals, for all their resort to such Clintonesque phrases as "no increases in personal income tax rates," have indeed raised taxes, by means of a slew of base-broadening measures. But the proper measure of that is not how much revenues have risen, but how much they have risen relative to GDP. A quick look at the budget shows that revenues increased from 16 per cent of GDP to 17.2 per cent during the four-year period under scrutiny.

That 1.2 percentage point increase, worth about $9-billion, is all that can be fairly attributed to Liberal tax hikes. The other $22-billion of revenue growth was nothing more than the dividend on a rising economy. The government would have collected that money even if it had left taxes entirely alone.

Likewise, it's hardly fair to measure spending in dollar terms and leave it at that. That doesn't mean we should expect spending, like revenues, to grow in line with the economy, automatically -- as implied by government claims to have cut program spending by a quarter, from 16.6 per cent of GDP to 12.4 per cent.

The proper measure of spending, rather, is in real per capita terms: the number of dollars per citizen, after inflation. If spending were to rise no more than was necessary to keep pace with increases in prices and population, we should say that real per capita spending had heldconstant.

Anything above or below that line would therefore be attributible to policy choices.

Looked at in this way, it's clear that the government did cut spending, substantially. Program spending is about $27-billion lower today than it would have been had it been left unchanged at 1994 levels, in real per capita terms.

That's about a 20 per cent cut: nearly three times as large as the 7.5 per cent tax hike imposed in the same period.

Very well. But perhaps the Liberals cut the wrong kind of spending. Did social spending, as the NDP complains, bear the brunt of the cuts? Hardly.

Social transfers in fiscal 1994, including cash transfers to the provinces, transfers to persons, and grants to native bands amounted to 58 per cent of program spending. Four years later, that ratio had declined ... to 57 per cent.

And that's not taking into account the effects of the decline in unemployment, which has cut billions out of total employment insurance benefits all on its own.

As for the provinces' complaint, it all depends how you look at it. Yes, total cash transfers, including equalization, have been slashed by 25 per cent, from $27-billion to $20-billion. But that $7-billion is barely 3 per cent of total provincial revenues -- hardly draconian.

A journalist is usually loathe to say anything nice about the government of the day. But on this one, give credit where credit is due. They'll screw up something else soon enough.