Ok kids, excessive debt drains taxpayer dollars down the interest rate hole.
Debt allows governments to create policy that on the surface appears to work but is in fact fundamentally flawed. Overpaid civil servants, subsidies for green energy, lack of accountability for First Nations, these are all policies that are ultimately fueled with debt and that are fundamentally flawed. In other words the Trudeau motto should be "Bad policy? Not to worry, just print money."
It should be illegal for governments and crown corporations to incur debt except for capital expenditures, and only if those expenditures pass a rigorous accounting analysis. The exception to this would be if the country were at war.
Here is the long-form report: https://www.fraserinstitute.org/sites/default/files/federal-fiscal-history-canada-1867-2017.pdf
And here is a nice observation :
PET ran up the debt drastically, while increasing taxes somewhat, most notably sales taxes. Since the government ran unchecked deficits for nearly thirty years, debt service charges grew, from 11.6% of government expenditures in 1975, at the apex of the debt run up, to 26% in 1990.
Harper, while he ran deficits and increased debt, got debt service charges down below 10% of expenditures. He was handed a bad hand and improved it.
IOW, PET's debt was NEVER TRULY REPAID, just rescheduled and re-serviced. Even when the economy boomed in the 1990, as actual federal debt to GDP dropped, debt service charges remained a significant expenditure, one quarter of federal revenues in 1990.
Mulroney managed only to staunch the bleeding by at least not having to borrow just to meet programmed spending obligations.
With the hangover of the PET debt still with us, despite the boom 1990s, even with Harper balancing her books after the world debt implosion, pushing the debt snowball uphill, Justin Trudeau wants to send her back down the mountain, hoping like his father the budget will balance itself.
Trudeau, Mulroney, Chretien, and to some extent Harper, could rely on a bunch of boomers increasing their productivity, their wealth and their tax bills.
Trudeau the younger cannot depend on that - the opposite in fact - as aging boomers decrease productivity through retirement/slowing down, consume their wealth and become drains on public coffers through pension and medical entitlements.
He is playing a good hand poorly, not learning from his father's misjudgment, indeed emulating it.
Unlike their parents, boomers are carrying more debt, especially consumer debt, regrettably Canadians are not doing any better than their governments.
It's Probably Nothing - Small Dead Animals
Debt allows governments to create policy that on the surface appears to work but is in fact fundamentally flawed. Overpaid civil servants, subsidies for green energy, lack of accountability for First Nations, these are all policies that are ultimately fueled with debt and that are fundamentally flawed. In other words the Trudeau motto should be "Bad policy? Not to worry, just print money."
It should be illegal for governments and crown corporations to incur debt except for capital expenditures, and only if those expenditures pass a rigorous accounting analysis. The exception to this would be if the country were at war.
Here is the long-form report: https://www.fraserinstitute.org/sites/default/files/federal-fiscal-history-canada-1867-2017.pdf
And here is a nice observation :
PET ran up the debt drastically, while increasing taxes somewhat, most notably sales taxes. Since the government ran unchecked deficits for nearly thirty years, debt service charges grew, from 11.6% of government expenditures in 1975, at the apex of the debt run up, to 26% in 1990.
Harper, while he ran deficits and increased debt, got debt service charges down below 10% of expenditures. He was handed a bad hand and improved it.
IOW, PET's debt was NEVER TRULY REPAID, just rescheduled and re-serviced. Even when the economy boomed in the 1990, as actual federal debt to GDP dropped, debt service charges remained a significant expenditure, one quarter of federal revenues in 1990.
Mulroney managed only to staunch the bleeding by at least not having to borrow just to meet programmed spending obligations.
With the hangover of the PET debt still with us, despite the boom 1990s, even with Harper balancing her books after the world debt implosion, pushing the debt snowball uphill, Justin Trudeau wants to send her back down the mountain, hoping like his father the budget will balance itself.
Trudeau, Mulroney, Chretien, and to some extent Harper, could rely on a bunch of boomers increasing their productivity, their wealth and their tax bills.
Trudeau the younger cannot depend on that - the opposite in fact - as aging boomers decrease productivity through retirement/slowing down, consume their wealth and become drains on public coffers through pension and medical entitlements.
He is playing a good hand poorly, not learning from his father's misjudgment, indeed emulating it.
Unlike their parents, boomers are carrying more debt, especially consumer debt, regrettably Canadians are not doing any better than their governments.
It's Probably Nothing - Small Dead Animals
