It's time to turn to reserves

AT BUDGET TIME, politicians at all levels of government would do well to look to the Scriptures for clues about good financial planning.

The lesson taught by an ancient king's dream of seven plentiful years and seven of poverty is that in good times the storehouses should be filled to overflowing, thus for there to be provisions available in bad times.

If the politicians prefer, they could turn to Aesop and the fable of the grasshopper and the ants — the summer of toil to prepare for the winter. The sunshine hours are the time to prepare for the inevitable darkness.

In modern budget terms, of course, this means that ample reserves should be created when cash is flowing, and those reserves to be used when money is in short supply.

It requires a lot of political will to do that. Society expects an abundance of governmental services in the good times, and complains when those services are not there when things go sour.

Everything is cyclical. The stock market rises and falls but generally has an overall upward trend. The edict there is "buy low and sell high." The wealthy among us do just that. The rest of us buy high and are forced to sell low.

We agree wholeheartedly with Orangeville Deputy Mayor Warren Maycock that the current recession is the time to use reserves to stabilize taxes — but only if the politicians had the foresight and the political will to create adequate reserves in the good times.

Therein lies the problem at many levels. Although our federal debt is low by comparison with those of other industrialized nations, it's approaching half a trillion dollars, with few if any reserves to offset the debt.

Locally, Mono is one of the few municipalities with no debt and even there, the town council has had to dip into its reserves to prevent a tax increase in 2010.