Deficit is growing ...150 Billion!

[Jerry J. Fortin]

I'm not hoping that the economy will grow, I know that it will. I'm not hoping the dollar will stay high (although it probably will), I'm hoping it's the exact opposite.

The government won't stay in deficit. Even if it does for a few years, we will still have the best position of any G8 country. There is nothing to worry about from this deficit, even if it is undesirable.

It's also worth noting that the government gets much of the money back in taxes and that much of the money being spent is in fact is investment in the future (in the form of transportation and knowledge infrastructure), and much of the money will come back in tax revenue anyway.

You are foolish to believe that the money now being spent will ever come back. It is gone dude. The only thing that remains is the debt. The fools in government don't even try to pay it off and the constant spending only adds to that total which requires billions of tax dollars just to make the interest payments on a principle that will never be repaid.

[CAMP]

They aren't indicators of much really. As a percentage of our GDP, the debt is now very small and will remain that way. As long as we can keep the service charges to a reasonable level and we have a plan to get out of deficit, we'll be fine

Really, and what about the debt that is still there from many other years of government spending. When is that going to get paid off?

[Smallc]

You are foolish to believe that the money now being spent will ever come back.

Money always comes back to the government. Case in point: In Manitoba, we're building a new football stadium. The provincial government is providing just over $20M and they will get just under $20M back in taxes through the construction of the $140M facility. I think that the federal numbers for the same project are $15M spent and $7M recovered in taxes.

Edited July 15, 2009 by Smallc

[CAMP]

Money always comes back to the government. Case in point: In Manitoba, we're building a new football stadium. The provincial government is providing just over $20M and they will get just under $20M back in taxes through the construction of the $140M facility.

So when is all the debt coming back?... it's been like what since Trudeau years since we've entered the debt zone.

[Smallc]

Really, and what about the debt that is still there from many other years of government spending. When is that going to get paid off?

It doesn't actually ever have to be paid off. As long as the level of debt doesn't grow substantially, the debt will make up a smaller and smaller ratio when compared to the economy and the debt service charges will make up a smaller and smaller piece of total government spending.

After the recession is over (which it probably is, but we should wait until normal growth returns before stopping stimulus), then we can work at getting back into the black and slowly paying down our debt to the optimal level of below 25% of GDP.

[Jerry J. Fortin]

It doesn't actually ever have to be paid off. As long as the level of debt doesn't grow substantially, the debt will make up a smaller and smaller ratio when compared to the economy and the debt service charges will make up a smaller and smaller piece of total government spending.

After the recession is over (which it probably is, but we should wait until normal growth returns before stopping stimulus), then we can work at getting back into the black and slowly paying down our debt to the optimal level of below 25% of GDP.

A student of Reaganomics, oh joy. I heard Enron is hiring..........

[Smallc]

I'm certainly not a student of Reganomics. I believe in responsible government fiscal policy, nothing less, nothing more.

[bush_cheney2004]

.....The US unemployment is still growing and so is ours and since our economies are so connected, there's no light at the end of the tunnel yet.

That means combatting the deficit is a lower priority.

[punked]

A student of Reaganomics, oh joy. I heard Enron is hiring..........

When is the right time to borrow anyway?

[Jerry J. Fortin]

When is the right time to borrow anyway?

Never.

[msj]

When is the right time to borrow anyway?

When the net benefit exceed the net costs.

[Jerry J. Fortin]

When the net benefit exceed the net costs.

By jove, you have it right!

[punked]

Never.

That seems silly.

[CAMP]

It doesn't actually ever have to be paid off. As long as the level of debt doesn't grow substantially, the debt will make up a smaller and smaller ratio when compared to the economy and the debt service charges will make up a smaller and smaller piece of total government spending.

After the recession is over (which it probably is, but we should wait until normal growth returns before stopping stimulus), then we can work at getting back into the black and slowly paying down our debt to the optimal level of below 25% of GDP.

Well I have to say you're an optimistic person... maybe you should check out this ....

http://www.debtclock.ca/

It's not going down is it. Moving up quite fast. See how much you own the government right now. 14,000 G's

when are you going to pay yours? Your probably planning on leaving the planet before you do and passing it off to your children, or grandchildren.

[Smallc]

This is the first time that the debt is growing is over a decade. Yes, it will go up for now, but eventually, the growth in the economy will outpace the growth in the debt, and even if the actual debt doesn't go down, the percentage of the GDP that is offset by the debt will will decline. The situation will fix itself provided that the government doesn't increase spending too much. I also expect that pressure from the people will force the elimination of the deficit before it fixes itself.

[jbg]

The problem is that consumption taxes are the best way for the government to garner revenue from everybody.

They should not be overused since by definition they tax people more heavily that really cannot afford to pay. I'm for a mixed bag; perhaps a GST of about 3% and income taxes and "sin taxes" for the rest.

[OddSox]

They should not be overused since by definition they tax people more heavily that really cannot afford to pay. I'm for a mixed bag; perhaps a GST of about 3% and income taxes and "sin taxes" for the rest.

What about the GST rebate? I know an elderly gentleman who lives a fairly comfortable life on CPP and OIS (about $14000 a year) and receives about $400 per year in GST rebates - and he spends nowhere near that amount. I agree that a 'mixed bag' is the best approach, but I think the VAT taxes should be higher, income taxes lower, and sin taxes should be almost eliminated. I'm getting sick of this concept that some L-shaped a**hole should be telling me what I should think, do or say...

Sorry.

[Smallc]

sin taxes should be almost eliminated.

You want to do things that are known to harm you...and society, you have to pay. It's a wonderful idea.

[Bryan]

You want to do things that are known to harm you...and society, you have to pay. It's a wonderful idea.

I'm absolutely in favour of of sin taxes. Hike those all you want. Make cigarettes cost enough that they directly cover the costs for all cancer treatment.

[Guest TrueMetis]

I'm absolutely in favour of of sin taxes. Hike those all you want. Make cigarettes cost enough that they directly cover the costs for all cancer treatment.

Legalize weed and tax it. They would make even more money off it then smoking.

Edited July 29, 2009 by TrueMetis

[jbg]

I agree that a 'mixed bag' is the best approach, but I think the VAT taxes should be higher, income taxes lower, and sin taxes should be almost eliminated. I'm getting sick of this concept that some L-shaped a**hole should be telling me what I should think, do or say...

My feeling is that all tax rates, whether consumption-based, income-based or "sin"-based should be set at levels low enough to minimize the incentive and opportunity for evasion. As far as "sin" taxes goes, at least, to some extent, the consumer can make his own economic and life-style decision as to whether to incur those taxes.

The problem with making VAT higher is that they fall most heavily on those who can least afford to pay them. Also, at present rates, particularly when in conjunction with PST or HST, the rates can be high enough to foster an underground economy built on the evasion of those taxes. The same result occurs when income taxes are set at unrealistically high levels.