Confession, they say, is good for the soul, and so it is with a glad heart that I do confess that I have erred. The habits of a lifetime are hard to break, and for those of us who grew up in the shadow of the federal deficit, it became almost reflexive to believe that fiscal stability would always elude us, that the public debt would grow ever more mountainous, and that if ever things seemed to be on the mend, chance or profligacy would somehow conspire to put us back on the road to ruin.

But I do admit that doubts have increasingly crowded my pessimistic mind of late: a nagging sense that, somehow, something was all right. Oh, I fought it. I didn't want to believe it. But it is time for all of us to admit the awful truth. The debt crisis is over.

I say this not merely because our old friend Mr. Deficit is about to depart.

Balancing the budget, per se, was never really the issue: that only means we are not adding to the debt in a given year, which is neither the necessary nor the sufficient condition of fiscal security. It is the debt, or more precisely the cost of servicing the debt, that puts us in difficulty, if not in danger, and this only in relation to our ability to pay, best measured by gross domestic product.

So, on an annual basis, it is enough that the debt grow no faster than the economy, or that the deficit be no greater, as a percentage of the total debt, than the nominal rate of growth in GDP. That at least ensures that the debt- to-GDP ratio will not rise, i.e.

that things will not get worse. But to return public finance to stability, this has to be repeated over many years, until the debt-to-GDP ratio is brought down to more comfortable levels.

So, no, we cannot say that the crisis is passed merely because the federal debt is no longer growing faster than GDP, or even because, with the probable arrival of a balanced budget in the current fiscal year, it is not growing at all. it is not sufficient to stow our unease that the debt should remain stuck near $600-billion, even if arithmetic tells us that a growing economy would, over time, cause the debt-to-GDP ratio to shrink on its own.

No, what cinches it, what is causing me to officially retire as a professional debt-doomster, is that the debt is about to decline in absolute terms. And once it has begun to fall in earnest, it will go on falling, more or less whatever we do. That's not quite yet a given. But in a couple of years, once the surplus is large enough that even a pronounced recession could not throw us off track, it will be. Remember that feeling of fiscal vertigo in the 1980s, when it seemed no matter how much we cut spending or raised taxes, we just kept plunging further and further into debt? That same dynamic is about to work in reverse.

The natural tendency to focus on the annual deficit, and our uncertain progress against it, has obscured the huge underlying momentum for debt reduction that has been built up over the past ten or twelve years of seemingly endless austerity. The deficit has only hung on this long by virtue of the staggering costs of interest on the debt: in recent years, more than $40-billion annually, or about one-third of every tax dollar. That has caused us to overlook what has grown to be an equally staggering surplus of revenues over everyday program spending. Total federal revenues next year will exceed $150-billion, against program spending of a little more than $100-billion, for an operating surplus of nearly $50-billion.

The balanced budget we are about to attain is thus unlike any we have ever known -- if for no other reason than we have never run deficits of such size for so long. The last time the budget balanced, in 1970, it was at relatively low levels of debt and debt interest, and so required only a very small offsetting surplus on operations. In such times, with spending roughly equal to revenues, it was just as easy to run a deficit as a surplus in any given year.

But when you are taking in 50 per cent more in taxes every year than you are spending on programs, the world is a very different place. A surplus, once achieved, becomes almost unstoppable. Even if revenues and expenditures grow at the same pace, the surplus will increase: for every $2 you increase spending, revenues grow by $3. As the surplus grows, and the debt falls, the costs of servicing the debt also fall, increasing the surplus still further, and so on and so forth. And that's even without counting the third- and fourth- order effects of lower interest rates, and faster growth.

No one, not even the Liberals, has actually proposed increasing spending even that fast. Indeed, in a couple of years, once the surplus has reached 2 per cent of GDP, it would require a quite heroic rise in spending, or equally irresponsible tax cuts, even to slow the debt's fall.

We've all been in quite a state of denial over this, but there's really no getting around it. The debt crisis is over.