200 Billion - no bank bailout bailout finally set to close

[William Ashley]

This was a key measure that turned me sour to the CPC over a year ago... and it is finally slated to be "killed" in the upcoming budget. Of the 200 Billion allocated it appears that about 135 billion dollars was given to the banks in a little over a year and a half - this would of paid off a quarter of the federal debt (with over 10% interest it would account for atleast 13 Billion in savings in debt interest this year - and still given the banks the "credit" it needed so badly - credit for billions of per quarter earnings companies". I am relieved that the other 65 billion was not spent but very disturbed that most Canadians don't recognize the magnitude of the corrupt practice that this program was, giving 135 billion tax dollars to very rich profit earning corporations that were stated as "at no risk" "healthy" and "not receiving a bailout". Good ridence to this program - although only a couple months ago before the prorogue that 100 billion was remaining it seems "while penny pinching" finding ways to cut spending they spent another 35 billion of the funds allocated to help banks "who didn't need the money" anymore. I hope people understand the underhandedness of this government, and how slimey and crooked it is. The thing that frustrates me is how much this government is two faced and playing off peoples lack of knowledge of the governments actions.

http://www.theglobeandmail.com/news/national/budget/ottawa-closing-the-tap-on-bank-support-measures/article1478910/

Edited February 25, 2010 by William Ashley

[M.Dancer]

Of the 200 Billion allocated it appears that about 135 billion dollars was given to the banks in a little over a year and a half -

One thing wrong with this post (mor than one thing but only one things needs addressing)...that is, the money wasn't "given" to the banks...it was not a bail out or a loan.

[Mr.Canada]

One thing wrong with this post (mor than one thing but only one things needs addressing)...that is, the money wasn't "given" to the banks...it was not a bail out or a loan.

Wow, no drive by smears this time Dancer? It must be too early for you to start trolling yet I guess.

I love how the secu socialists hate the banks and oil companies. If they were to all go belly up where do they expect the jobs to come from?

How do they plan to replace all the jobs from the financial and oil and gas sectors?

How about the revenue from both of these fields? We're talking hundreds of billions of dollars.

I want to hear where the socialists plan to rqaise this money from.

Oh wait, they'll raise taxes to the working class they claim to love so much, I almost forgot. The only thing they love about working people is the large cross section of society they can tax to death. They want workers money.

Edited February 25, 2010 by Mr.Canada

[M.Dancer]

Wow, no drive by smears this time Dancer? It must be too early for you to start trolling yet I guess.

But not to early for you it seems.

I love how the secu socialists hate the banks and oil companies. If they were to all go belly up where do they expect the jobs to come from?

How do they plan to replace all the jobs from the financial and oil and gas sectors?

How about the revenue from both of these fields? We're talking hundreds of billions of dollars.

I want to hear where the socialists plan to rqaise this money from.

Oh wait, they'll raise taxes to the working class they claim to love so much, I almost forgot. The only thing they love about working people is the large cross section of society they can tax to death. They want workers money.

Do you have any idea what you are talking about...because from my point of view the above is drivel..."secular socialists"? Who are you talking to? ...and why?

[William Ashley]

One thing wrong with this post (mor than one thing but only one things needs addressing)...that is, the money wasn't "given" to the banks...it was not a bail out or a loan.

What did Canada get for the 135 billion?

[M.Dancer]

What did Canada get for the 135 billion?

Outstanding secured debt. It's like this. X owns a company valued at 100 dollars. They got a loan from ABC bank for $50. X will pay back the $50 with interest. Canada bought the loan from the bank for $50 + interest. The bank nows has the capital they loaned, plus interest and they can now loan it out again. Canada has the secured note which bears more interest than what Cannada pays. It is at worst a zero sum trqansaction, at best a marginal profit for Ottawa and the end result is the credit crunch is mitigated.

[Mr.Canada]

What did Canada get for the 135 billion?

So the socialists hate the banks and oil companies right?

Want to destroy the banks and oil companies right?

Shut down the entire oil and gas industry not to mention the mining and forestry industries.

How do you plan to replace that GDP overnight?

That GDp which you need for all your cute cuddly social programs, hug a thug and what not.

I suspect the socialists have no answers.

Edited February 25, 2010 by Mr.Canada

[ToadBrother]

I love how the secu socialists hate the banks and oil companies. If they were to all go belly up where do they expect the jobs to come from?

What an odd phrasing. Are you asserting that God likes oil wells and bankers?

[Mr.Canada]

What an odd phrasing. Are you asserting that God likes oil wells and bankers?

Lol, I mean't to take that secu out then I forgot and it was quoted so now I'm stuck with it forever. To answer your question yeah he must. He created the oil in the ground and the humans who run the banks.

[M.Dancer]

Lol, I mean't to take that secu out then I forgot and it was quoted so now I'm stuck with it forever. To answer your question yeah he must. He created the oil in the ground and the humans who run the banks.

And to continue that brain fart...God also created the socialists who according to you want to do something or other....

What a tangled web we weave when we first practice to post word salads with poo poo dressing squeezed through a sieve.

[Mr.Canada]

What a tangled web we weave when we first practice to post word salads with poo poo dressing squeezed through a sieve.

Lol, that was funny as hell. Seriously write that one down....haha. poo poo dressing, lol.

[William Ashley]

I love how the secu socialists hate the banks and oil companies. If they were to all go belly up where do they expect the jobs to come from?

I'm neutral in regard to banks and oil - my problem is that the government heavily subsidizes them, and protects them rather than treating them as other businesses - these companies are the richest yet they get the most benefits. Something is wrong there.

How do they plan to replace all the jobs from the financial and oil and gas sectors?

There is no shortage of possible labour.

How about the revenue from both of these fields?

Let companies run themselves, no need for government intervention - Canada has more than enough natural gas and oil for domestic consumption.

We're talking hundreds of billions of dollars.

Hundreds of billions of dollars when the totality of corporate tax is 30 billion?

I want to hear where the socialists plan to rqaise this money from.

A good start is not to give hundreds of billions of dollars to them.

Oh wait, they'll raise taxes to the working class they claim to love so much, I almost forgot. The only thing they love about working people is the large cross section of society they can tax to death. They want workers money.

Actually both the NDP and Liberals would like to raise corporate taxes which are sitting at about half of the personal rate.

Personally I would increase the number of crown corporations, and alter the structure of trade. I actually favour a self funded government not one that taxes domestic parties, based on income. I favour royalties, enterprise to raise funds. While having service charges for non essential processes. I favor service charges, and reduction of non essential governmental processes, streamlining government, and better integrating government. Stopping of foreign funding to places like haiti and africa - except via crown corp business. I'd call on funding from private sources and remove government funding to political parties. I'd up sentences to optional death, gulag exile, work camps. Eg. opening up anticosti, and other remote islands as a penal colonies. I'd put the military to work in "construction" projects rather than "reconstruction" projects half way around the world. I'd stop transfers and have people "move" if they want a better place to live. Health care would be privatized except for "emergency care".

1A. The Public Debt and Property.(45)

The public debt would on a monthly basis be distributed to all new citizens. Individuals would be individually be responsible for this debt - and on their death would have their personal surplus applied to their outstanding debt. If they were married joint assets would be split by 50% of value to the maximum with the spouse deciding which assets would compose the 50%

Corporate tax would remain until the debt was paid off.

The government would gain 15% interest in all Publically offered companies - as a lump sum tax, with corporate taxes being ceased if the 15% ownership was granted. Private companies would continue to pay taxes at 15% earnings. The rate of public ownership would be reduced after the debt was paid off.

2. The Regulation of Trade and Commerce.

Nafta would be modified or left. If WTO too heavily constrained the needs of the economy it would also be left. Rates would vary based on needs of the long term development and would concentrate on domestic products to maximize employment and potential development. Low rates would be maintained for non domestically produced product.

2A. Unemployment insurance.(46)

EI would be an optional program, administered via a crown corp.

3. The raising of Money by any Mode or System of Taxation.

see above

4. The borrowing of Money on the Public Credit.

Borrowing money would be barred.

5. Postal Service.

The postal service would be internalized and be turned to a branch of the military. Canada post would continue to be run as a crown corp, but would be run for profit. This in mind of supporting an "electronic" medium that reduces waste of transfer of material and paper use in government. The military - intelligence or local government offices would be housed to handle government communications or public private communications. Things like telephone and internet and in person communication would be used where possible.

6. The Census and Statistics.

Census and statistics would be only performed if donations provided for it, leaving individuals to register their births and deaths.

7. Militia, Military and Naval Service, and Defence.

A public militia would be reformed with an annual mandatory service requirement based on age rankings in either civil defence or military purpose as a supplemental reserve in the event of emergency or disaster. Those militias would be localized by community.

Private militias would be legalized and entirely self funded with a small registration fee for an oversight officer, who would confirm allowances for specific training activity and insure compliance in training etc..

The CF would be geared to special forces, and allowed a discretionary fund to operate a military procurement program as a crown corporation with access to crown land to raise resources or acquire property to conduct profit earning operations - which they would be given free reign over spending of raised funds through self reliance.

8. The fixing of and providing for the Salaries and Allowances of Civil and other Officers of the Government of Canada.

Operating budgets would be provided for essential government services, and a pay base - other profits would be based on service charges - funds departments raised themselves could be redistributed in pay scale. Pay rate etc.. would vary by service, however government employment would be shifted to crown corporations.

9. Beacons, Buoys, Lighthouses, and Sable Island.

Shipping companies would pay an operating charge - and there would be a annual surcharge on boating registration and licenses. Foreign companies would be charged an operating fee in advance - failure to do so could result in confiscation of the ship unless the fee and fine was paid.

10. Navigation and Shipping.

as above although sailboats would be made for shipping in the great lakes and other lakes as a merchant marine (not "sailships" you might envision" the navy would be charged with operating the merchant marine - and supplement its size by increasing the size of the merchant marine - and given a portion of proceeds of the merchant marine for building war ships and other costs.

11. Quarantine and the Establishment and Maintenance of Marine Hospitals.

This would be given as a responsibility of the Navy

12. Sea Coast and Inland Fisheries.

This would be given as a responsibility of natural resources.

- and the navy (the coast guard would join the navy) - while park services would fall under the army

13. Ferries between a Province and any British or Foreign Country or between Two Provinces.

Would be operated by the navy where not private.

14. Currency and Coinage.

Paper currency would be phased out and coinage would be given as a norm for all coinage. investments in "commodities would be used to raise the value of distributed currency over the long term, as a form of investment. Melting would be reserved to only be legal for the government.

15. Banking, Incorporation of Banks, and the Issue of Paper Money.

A national citizens bank would be instituted, and the banking act would be reduced for private banks. Banks holding federal debt would be open for higher sector taxing unless they forgave the debt or it was paid off as a way "of supplementing debt repayment" But not done in a way to penalize, instead as to free up capital.

16. Savings Banks.

The government would operate a reserve and a citizens bank. Private banks could also operate

17. Weights and Measures.

The government would set standard wieghts and measures such as the SI system.

18. Bills of Exchange and Promissory Notes.

These would be controlled by private contract.

19. Interest.

The government would set its banks interest rates but would otherwise be private domain.

20. Legal Tender.

The government would offer, coinage.

21. Bankruptcy and Insolvency.

would be privately administered.

22. Patents of Invention and Discovery.

There would be a free period and an open period. IP security period would be set based upon category of IP.

23. Copyrights.

Fair use. With economic distribution rights being held by the copyright holder. Would focus on "original work"

24. Indians, and Lands reserved for the Indians.

Would be "self governed", and would liaison with parliament if they opted. - Bearing all treaties.

25. Naturalization and Aliens.

A fee would be set for naturalization - with higher fees for faster naturalization. Aliens would be charged and put into a work camp, killed or exiled. All individuals entering the country would have to put a "return deposit" which would be set at a rate that would pay for return to their country by their method of choice. Eg. they could pick rail, road, air, sea as were applicable given the circumstances. The deposit would be returned on their exit.

26. Marriage and Divorce.

would be privatized entirely, but would have to be registered with the government to be recognized.

27. The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters.

More courts, and more streamlined justice- judges would be given alternative sentences allowance, and the system would be altered to inquisitional with public voices allowed in trial.

28. The Establishment, Maintenance, and Management of Penitentiaries.

They would be closed down or turned for alternative purposes. Or turned into work camps, run by the military.

Old Age Pensions

would be honoured but monitored by a crown corporation which would need to raise funds to cover program costs.

Judges salaries would be paid on a per case heard basis, after a base salary.

Edited February 25, 2010 by William Ashley

[William Ashley]

Outstanding secured debt. It's like this. X owns a company valued at 100 dollars. They got a loan from ABC bank for $50. X will pay back the $50 with interest. Canada bought the loan from the bank for $50 + interest. The bank nows has the capital they loaned, plus interest and they can now loan it out again. Canada has the secured note which bears more interest than what Cannada pays. It is at worst a zero sum trqansaction, at best a marginal profit for Ottawa and the end result is the credit crunch is mitigated.

So they got 50$? When is the 50$ going to be paid back? How much is 50$ worth then?

Where is the list of all these assets? And what can Canada do with them?

Where are the actual deals?

What was actually gained. I don't need theoretical speech here, I need real examples of what 135 billion dollars bought. It is a lot of money to be theoretical purchases --- where is the stuff?

Edited February 25, 2010 by William Ashley

[M.Dancer]

So they got 50$? When is the 50$ going to be paid back? How much is 50$ worth then?

Where is the list of all these assets? And what can Canada do with them?

It would be paid back according to the terms of the loan.

[William Ashley]

So the socialists hate the banks and oil companies right?

I'm my own type of socialist who beleives in the free market - I beleive in a balance of jurisdictions. The government is responsible for public security, while private institutions are free to operate domestically within the framework of law.

Want to destroy the banks and oil companies right?

Personally, I'd like to offer public banking, and free up the private banks. That is offer a baseline service of currency storage by the government. Special financial things, loans etc.. would still be provided by private banks. Government programs involving distrobution of monies would be provided through the public bank, and public bank accounts.

I think natural resource industries ought to be supplemented by criminals, the military. I feel a natural resources strategic reserve should be established to insure "baseline" support for natural resource industries so they arn't as effected by fluctuations of commodity prices - domestically.

Personally I think socialists tend to support industries as they are very important, they just tend to keep private profit to a minimum.

Personally, I would seek to allow the military to speed up development if it was profitable for them, and I'd seek to establish baseline resource harvesting on a regional basis rather than wholely single ultra large sites owned by multinational companies, which may not be intersted in domestic interests but instead serving a foreign market. While I think private companies should be done, I think demand will still exist, so driving up the cost by establishing royalties on specific products or export surcharges - done intelligently would increase the costs of materials. Canada is natural resource rich - specific trade deals would be proposed with countries which have materials Canada requires. For example trade between russia and canada could be conducted for materials in shortage of each country, or usa and canada on the same grounds, but assets would be limited to other foreign entities, and the best deal would be given to the countries that gave the best deal. The companies would be required to sell to the government first - then they would be able to sell excesses after the strategic reserve quota was met. The tarrifs would be set based on "full range economic benefit" rather than direct private profit. If there is a a failure of sale of raw materials in Canada then it would be good to look at what these are. The same can be looked at processed goods to see how many of those processed goods are being imported, then raising a tarrif, so that local markets would be opened up at the cost of foreign markets.

Now you can say that this would cause trade problems, but I don't think it would - personally since trade deals would still be provided, foreign government will like to have their resources and money stay in their country so it is a mutual benefit - and select deals could be provided. While you can say this would create trade problems, I feel the opposite would be created, creating "select trade with partners"

In some cases it might even open up trade that didn't exist before. Part of the issue of multinational companies is that they sell to themselves, rather than taking the best deal for the people of any given country.

Shut down the entire oil and gas industry not to mention the mining and forestry industries.

This is lunacy. There is a lot of trade out there. I favour domestication and localization. I don't say bar export, I do say set the cost of trade based on the full benefits or negatives of trade, rather than direct profit of the deal to a private company alone. The whole economy matters far more than the profits of one person.

How do you plan to replace that GDP overnight?

Fear mongering - fact is the demand is there. Actually I think GDP would go up due to less turnover and work stopages based on orders existing.

That GDp which you need for all your cute cuddly social programs, hug a thug and what not.

What social programs? Social programs are generally under the control of provincial government with the exception of EI and Old Age Security - for both of these I favour establishing self funded crown corporations to administer those programs within their abilities.

I suspect the socialists have no answers.

and what are you?

[Moonbox]

William Ashley...your lack of understanding continues to astound me.

You have no idea how banking or government finances work and I'd not be surprised if you didn't know anything about personal finances either.

Basically all Canada did was buy assets from the financial system in order to get more moeny flowing in the economy.

The assets they bought were loans. Those loans get paid back with interest. Interest is what makes sure we're covered from inflation and time-value. The government doesn't lose any money.

[Moonbox]

Actually we should probably let William Ashley and Mr. Canada have it out with one another here.

Let's just see what happens. It's going to be like monkeys flinging poo at each other.

[Hydraboss]

Actually we should probably let William Ashley and Mr. Canada have it out with one another here.

Let's just see what happens. It's going to be like monkeys flinging poo at each other.

...inaccurately...

[William Ashley]

...inaccurately...

Oddly Myself and Mr. Canada I have found agree on a number of issues -- I think there is a wierd mix either we completely have the same ideas or totally opposite ones.

[William Ashley]

William Ashley...your lack of understanding continues to astound me.

You have no idea how banking or government finances work and I'd not be surprised if you didn't know anything about personal finances either.

Yeah I know exactly how it works from what is actual rather than do what you can. life is life it works the same way regardless of where you are in it, there are just different scenarios you work with.

Basically all Canada did was buy assets from the financial system in order to get more moeny flowing in the economy.

What assets, no one has shown me a list of what the 135 billion bought.. I expect every penny to be "on the books" fact is ... regardless the government gave 135 billion to the banks... that is private institutions.. 135 billion would of been 25% of the federal debt.. and that would of paid things off real quick and freed up an annual 10+ billion debt interest payment that is a proportion of debt servicing charges.

Fact is, it was the wrong thing to do, you do not acquire assets you do not need. You do not buy assets you already have absolute right to and the ability to exporpriate for fair market value if required... it is madness to get involved in the practice, it is serious meddling in private industry. AND THE BANKS DIDN'T NEED MONEY - you have the bank of canada (you know the government bank) complaining canadians have too much debt.. well geuss what... it is because debt was given while the federal debt was racked up.. it is in all ways a bad rip off for the government that only benefits banks...

The assets they bought were loans.

loans arn't assets, they are liabilities. And you are saying I don't know how it works.

lets see the government isn't loaning the banks money by buying loans from the banks.. wake up dude. also WRONG - over 100 billion was allocated specifically to buy mortgages not exactly a loan.. it is much more involved than a loan - it contains collatoral clauses.. but canada gets nothing here, they only expand their liabilities. also canada is in debt so its debt is compounded and it created more debt by buying these assets but won't be paying it for years.. meaning debt is aquired instead of assets... the asset has to outpay compound debt.. and these deals don't even come close.

Those loans get paid back with interest. Interest is what makes sure we're covered from inflation and time-value. The government doesn't lose any money.

Sure they are paid back... you obviously are in the business of trying to convince retards they are geniuses, because you are triyng to tell me liabilities are assets and loans banks don't want are good business.

Government ought not pander to private interests of a select few or a single industry - Government ought to work for its success in mind of whole public benefit, not pander to special interests while sacrificing the public interest. This 135 billion represents unneeded special intersts.. the public would not be hurt by inability to borrow money. If they don't have money getting money at interest does not make sense it only exasperates the cash flow shortage and hyper accellerates the demise of the financial party. Long term debt is fiscal irresponsibility - and that is what the government is supporting, it is not only bad for government and the public, but it is also bad for the economy. You may not beleive me but it will drive inflation an increase the cost of new and perishable goods.

Supporting long term debt spending is wrong, the government doing it or the people allowing it, it is wrong.

Edited February 27, 2010 by William Ashley

[Moonbox]

Sure they are paid back... you obviously are in the business of trying to convince retards they are geniuses, because you are triyng to tell me liabilities are assets and loans banks don't want are good business.

I'm in the business of trying to convince retards they are retards...that's why I'm talking to you here.

See below:

loans arn't assets, they are liabilities. And you are saying I don't know how it works.

You don't know how it works. You have no idea. From how you talk I'd be surprised if you had 5 seconds of education in finance, be it personal or federal.

If a loan is a liability to someone, then it's an asset to someone else. If someone has listed 'accounts payable' on their liabilities in the balance sheet then you can be damn sure the other party has an equal 'accounts receivable' listed on the 'asset' side of theirs. It's the EXACT same thing here.

lets see the government isn't loaning the banks money by buying loans from the banks.. wake up dude. also WRONG - over 100 billion was allocated specifically to buy mortgages not exactly a loan.. it is much more involved than a loan - it contains collatoral clauses..

A mortgage is a loan with collateral charge. That makes it safer than a loan. You're digging a hole for yourself here bud.

but canada gets nothing here, they only expand their liabilities.

No. Canada gets their money back + interest while the debts are paid down. What you're basically saying here, in your infinite wisdom is that if a bank lends me 400,000 to buy my home, they're actually GIVING me the money and getting nothing back in return. Think about it.

also canada is in debt so its debt is compounded and it created more debt by buying these assets but won't be paying it for years.. meaning debt is aquired instead of assets... the asset has to outpay compound debt.. and these deals don't even come close.

O RLY!? Hey how about you give us a cite for that and show us how we're losing money on this deal. Methinks you pulled that shred of wisdom out of your arse.

[William Ashley]

I'm in the business of trying to convince retards they are retards...that's why I'm talking to you here.

You talk to yourself a lot don't you.

You don't know how it works.

Oh I do, you are errored because you are trying to legitimize "government" finance as "regular business finance". It isn't there are different barriers and processes that apply to government that don't apply to businesses. Namely absolute allodial domain, power of taxation, control of interest rates, and power of inflation.

The key you are not taking into account is that the government owns all land, it leases this land out via tax deed, this translates generally into property taxes. But also any other laws applicable to land ownership that the government sets. If the government needs land it can exporporate it, the government however has more land than it requires.

You have no idea. From how you talk I'd be surprised if you had 5 seconds of education in finance, be it personal or federal.

Sounds like an airy rhetorical comment to me. Try to substantiate it.

If a loan is a liability to someone, then it's an asset to someone else

Dude, when you pay for a loan, the money you give is a liability.

While you can say accounts receivables is an asset, the actual money you pay out is a liability, and until you receive the money with interest it is a liability. If you have debt, by increasing your debt to aquire the so said asset in interest on return, you increase your level of liability. While a loan can have a higher ROI than keeping the money this isn't necessarily the case. In this instance 56+ billion of the loan amounting to over 30% of the loan was by borrowing money from the party you loaned money to. You might ask why you are borrowing money from the person you are loaning money to, it seems like a slightly redundant process to me, there is something to it.

You are looking at this in a very narrow way and not taking the BIG PICTURE into account. Look at all the assets changing hands and who benefits from it. it isn't the government because they are heavily in debt. While you may think half a trillion dollars isn't a large debt - it is. Acquiring assets wouldn't be issued if you weren't borrowing money to do it, and you weren't in debt. Both of these things are the ROI isn't larger than the LOI, so it is a bad deal and a liability. There is a time frame that a ROI could be positive, however, due to the state of national finances there will be no realized return on investment only loss.

If someone has listed 'accounts payable' on their liabilities in the balance sheet then you can be damn sure the other party has an equal 'accounts receivable' listed on the 'asset' side of theirs. It's the EXACT same thing here.

Explained above.. and it isn't a ROI in account payable until it is realized. Accounts payable is a book falasy. It ain't money until you have it. The dollar value currently is very high to the US - this could drop to 80 or 60 cents on the US dollar. By investing the money into FOREX you could of made a realizable gain. 135 billion into toxic assets are not safe. You say they arn't toxic but until you identify them "as actual objects" eg. a list of the properties or otherwise the government bought I won't believe you. To me it is embezzlement until you actually show something tangible and realizable and lay out when the money is being paid back and the rate of default and loss - those things you haven't showed, so it is talk.

A mortgage is a loan with collateral charge. That makes it safer than a loan. You're digging a hole for yourself here bud.

The government would incur a liability by holding property it has no use for. If the property was not sold then it shows poor market interest rural housing markets are in decline, and no one is moving to the country side. Population is being rallied into urban centers and there is a housing shortage there. I tend to think that the mortgages the government is paying for are toxic - as when the plan was first announced this is how the plan was explained - taking toxic assets from the bank. The spin after the fact is another matter, but since the CPC lies constantly about everything they do, I tend to see what has proven true to date as what is going on rather than what they say after the fact.

No. Canada gets their money back + interest while the debts are paid down.

You are wrong - because the government borrowed money to loan the money. You can say this but it doesn't make it true. Show proof or go home.

What you're basically saying here, in your infinite wisdom is that if a bank lends me 400,000 to buy my home, they're actually GIVING me the money and getting nothing back in return.

Int this case, the person selling the home gets money (depending on the status of ownership - for all we know the same bank may have held the mortgage of the property owner and was paid the full balance of the previous mortgage plus the interest on the mortgage paid to date plus the penalty. They then transfer you the house and you pay them money, they are only up for the original amount. The banks "have lost" 400,000 dollars. You have lost nothing except for the deposit, and the property owner gets whatever they had after paying all costs (likely a loss over time unless they paid off the property but since you are paying property taxes worth more than an average rental value for a property chances are you have incurred a large loss)

The government gets a slight profit on property tax transfer.

So the bank may profit, the government will profit, and the other two people are loosing large sums of money.

Now when the government becomes the owner at loss (the only way they will acquire it is by default - the government is then responsible for upkeep costs and municipal taxes on the property, which could be $50,000 a year or more. In the case that it is rural then sale of the property could be difficult meaning the government could take losses and would be unable to write the loss off, incurring perpetual loss, after 10 to 20 years they not only loose $400,000 but an additional $400,000 that one property could prove to be an over 1 million liability over the lifetime of the government.

You are assuming it works the same way, but the banks don't want these properties. Also a 20 or 30 year mortgage means the money the government borrowed is a loss with debt interest. With low interest rates which they are, the goverment is not gaining much. If interest rates go up, any at risk properties become even more a burden.

While in your ideal picture everyone pays their loans, in reality it doesn't happen that way, and the default rate in canada is increasing.

The government ain't a financing firm, it shouldn't spend public money like one.

YOu are saying this money is a sure thing, but the government is borrowing money from the banks to lend to the banks so they can lend money to people who can't afford loans. It seems sorta bad business, and a measure that will weaken the economy.

O RLY!? Hey how about you give us a cite for that and show us how we're losing money on this deal. Methinks you pulled that shred of wisdom out of your arse.

I've done this in a different thread.

56 billion debt load - and another 20 billion debt load over the next 4 years

70 billion debt.

135 billion would of paid 1/4 of the federal debt off.

Debt interest payments and accumulated interest.

Only a portion is paid back at a time, and in that time the debt interest accumulates. Any defaults based on the default rating will show only a 30% ROI with 70% loss on investment working to a reduction of asset value by 40% meaing an additional 54 debt accumulated over the span of the investment.

Meaning the government lost 54 billion and destabilized their financial position, requiring a further drain on the economy, which increases debt load - which will only benefit banks while damaging the consumer economy leading to economic downturn.

Edited February 27, 2010 by William Ashley

[Moonbox]

Ask yourself what rate the government borrows at and then what rate a bank or consumer borrows at.

Once you've come to that revelation, consider the fact that housing prices have continued to increase in Canada over the last year or so.

With these two questions answered, even a crap flinging monkey should be able to figure out that the scenario you're laying out to us doesn't make any sense. The numbers you've provided are fabricated stupidity.

The difference between the housing market in the US and Canada is that housing prices tanked while default rates soared down south. Since housing prices have largely remained stable (or in a lot of cases increased) in Canada it's simply not true that the assets bought were 'toxic' like you're trying to tell us.

I'll say it again. You don't get it. You don't understand. Every post you've made here has made it more and more clear you don't have a clue.