MY INTEREST IN THE STUDY OF PUBLIC FINANCE BEGAN IN THE MID- 1970S while I was a junior auditor with the Office of the Auditor General of Canada. It was during this period that the beginning of the public debt build-up began. Between 1945 and 1975, federal public debt had grown negligibly, and, as a percentage of gross domestic product, the public debt was a mere blip on the radar scene of Canadian public finance. This would soon change and with it the character of the debate on public debt. But this debate did not really commence for another decade. What tweaked my intellectual interest in the subject was the near religious views of economists that the public debt was not an issue. In fact, in those days there seemed to be a view that public debts hardly mattered at all.
When I began my research on politics, public debt and debt management in the early 1980s, I found a general indifference or bemusement about the subject of public debt and a lack of questioning as to the implications of growing debt on the political system. The issue was, and remains today, largely a nonissue for political scientists, with certain exceptions. 1 With the stratospheric interest rates witnessed in the early 1980s and stratospheric deficits arising from the "Volcker induced" recession, seminars on government deficits and debts became fashionable. During the early to mid 1980s academic opinion tended to be divided whereas the opinion of the financial press and most business economists was almost universal in condemning the continuing failure of the federal government to rein in their deficits. 2
By the early 1990s, the issue of public debts and deficits was no longer a matter for government technicians and investment bankers, the subject was now on the top of every government's agenda in this country.
By 1994, Canadian taxpayers and Canadian and foreign financial communities had finally discovered the magnitude and policy implications of the federal and provincial governments' deficits and accumulated debts. At that time, one frequently heard utterances from "think tanks," provincial politicians and officials that federal and provincial deficits were reaching