What's the Big Deal About Government Debt?

[TimG]

Government in China goes to great lengths to ensure that citizens are not being gauged by corporations! It's called Communism! Not capitalism!

China has long since abandoned all of the major tenets of Communism in favor of a Capitalist system with an authoritarian government. The only part of China that is still Communist is the thoroughly corrupt Communist party which enriches itself by exploiting its people by colluding with property developers to force people off their land and pocket huge bribes in the process. Edited May 17, 2014 by TimG

[TimG]

So where is that borrowed money coming from? Care to explain that? If taxes are not enough to cover the budget or the costs of running government for the year, where exactly is this money coming from?

People who save money for retirement who buy bonds directly or via institutions like pension/mutual funds. A high savings rate is why Japan is able to support a debt of 200% of GDP which would have triggered a crisis in any other country.

[WWWTT]

Gauged of gouged? If the latter, then you are quite wrong. What is in China is not quite communism, and not quite capitalism.

Ripped off.

And yep, sorry to tell you this but I actually seen some of the bills that they pay there.

Canadians are getting scammed left right and centre!

WWWTT

[WWWTT]

China has long since abandoned all of the major tenets of Communism in favor of a Capitalist system with an authoritarian government. The only part of China that is still Communist is the thoroughly corrupt Communist party which enriches itself by exploiting its people by colluding with property developers to force people off their land and pocket huge bribes in the process.

And this coming from someone who doesn't even know anyone in the Chinese government party!

Good luck with your kaleidoscope vision!

Nice evasive tactic about why capitalism is still failing in the west!

Like I said before, why is it that capitalists think that capitalism works better in a communist country?

Got news for you TimG, capitalism isn't so great.

WWWTT

[Keepitsimple]

I don't understand all the doom and gloom of government debt. Debt is necessary to provide valuable services to the citizenry. You cannot compare government debt to individual debt. Canada is a rich country with lots of money, so really, debt will never seriously harm our country. Some people foolishly predict an economic collapse, but offer no evidence as to why they make that dire prediction. My word to all those concerned about debt; stop worrying; it's no biggie in the big game.

There's a lot of truth to the old adage that "Socialism fails when it runs out of other peoples' money". Not only does increased debt cause countries to pay more interest...but as debt increases, the credit rating gets downgraded and the interest rate goes up causing even more debt. Canada is only as rich as its ability to enable its citizens to earn money and pay taxes.

[WWWTT]

There's a lot of truth to the old adage that "Socialism fails when it runs out of other peoples' money". Not only does increased debt cause countries to pay more interest...but as debt increases, the credit rating gets downgraded and the interest rate goes up causing even more debt. Canada is only as rich as its ability to enable its citizens to earn money and pay taxes.

Ah the credit rating story again.

Set by standard and poor.

The final debating point from capitalists whom somehow are under the illusion that cutting spending/infrastructure to pay for corporate tax cuts will attract more business or corporations at the same time, destroying the competitive ability of the working class!

It's the same old story of the upper class telling the lower class that they are worthless and need the upper class.

When in fact it's the other way around

WWWTT

[Shady]

Ah the credit rating story again.

Set by standard and poor.

The final debating point from capitalists whom somehow are under the illusion that cutting spending/infrastructure to pay for corporate tax cuts will attract more business or corporations at the same time, destroying the competitive ability of the working class!

It's the same old story of the upper class telling the lower class that they are worthless and need the upper class.

When in fact it's the other way around

WWWTT

There is no class system in our country. Try and check some of you Marxist language at the door. Regardless, because of dangerously high debt to GDP levels, we had to cut spending dramatically in the mid to late 90s. And yet, we became a more prosperous country, as well as paying off debt and balancing budgets. How did this happen?

[Shady]

[socialist]

The problem with Canada is that our system keeps the down, down, and doesn't give them much of a chance to climb up .Neo -liberal corprotists need to keep people down to fill jobs that the neo-liberal cronies don't want for their own family members. Why do you think that everywhere you look, Neo-Liberal governments are underfunding public education while using tax dollars to fund private schools? The elite look after their own. They know the average person can't afford private school, so they gut the public system making it hard for teachers to work. Some of you have no clue what lies beneath the layer you reside in. Understand how the world works before giving an uninformed opinion.

[cybercoma]

There is no class system in our country.

Class absolutely matters in this country. The connection between socioeconomic status and academic achievement in children and youth is indisputable. If you would like to read more about it, look into any of the studies done using the National Longitudinal Survey of Children and Youth from Statistics Canada. For an example, you can check the following link. http://web.b.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=03802361&AN=48316169&h=G3HCT1%2f4IKKlM6smhiU3xzrBEeZkr8WXlbhX5GSefo4peX9dC7M0PcOET2FZM4nRhf8GuugWbufKk0JOL4B3OQ%3d%3d&crl=c

[WWWTT]

There is no class system in our country. Try and check some of you Marxist language at the door. Regardless, because of dangerously high debt to GDP levels, we had to cut spending dramatically in the mid to late 90s. And yet, we became a more prosperous country, as well as paying off debt and balancing budgets. How did this happen?

Nice Shady, it's called downloading on the provinces!

When you set the bar low, it's easy to look like a freekin hero!

In the early 90's, the deep corporate tax cuts that the later liberals/conservatives NEVER EXISTED. It's real easy to create any reality you like when you're omitting facts and transposing different realities.

WWWTT

[Shady]

Nice Shady, it's called downloading on the provinces!

When you set the bar low, it's easy to look like a freekin hero!

In the early 90's, the deep corporate tax cuts that the later liberals/conservatives NEVER EXISTED. It's real easy to create any reality you like when you're omitting facts and transposing different realities.

WWWTT

Actually, taxes were raised during the same budget cutting. The ratio was about 6 to 1, spending cuts to tax increases. Which led to a more prosperous Canada. How did this happen?

[WWWTT]

Actually, taxes were raised during the same budget cutting. The ratio was about 6 to 1, spending cuts to tax increases. Which led to a more prosperous Canada. How did this happen?

I don't think that taxes were increased. Rather tax breaks/loopholes were cut/eliminated.

But essentially we are in agreement here.

WWWTT

[Keepitsimple]

The problem with Canada is that our system keeps the down, down, and doesn't give them much of a chance to climb up .Neo -liberal corprotists need to keep people down to fill jobs that the neo-liberal cronies don't want for their own family members. Why do you think that everywhere you look, Neo-Liberal governments are underfunding public education while using tax dollars to fund private schools? The elite look after their own. They know the average person can't afford private school, so they gut the public system making it hard for teachers to work. Some of you have no clue what lies beneath the layer you reside in. Understand how the world works before giving an uninformed opinion.

Canada is one of the top countries in "income mobility" - the ability to move from a lower income level to a higher one. Not sure where an attitude like yours comes from - but if you are not born here and don't like our system, I suggest you try somewhere else and see if you can find what you're looking for. Hard word, a plan, and persistence go a long way in Canada.

Link: http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/measuring-income-mobility-in-canada.pdf

[Wilber]

There's a lot of truth to the old adage that "Socialism fails when it runs out of other peoples' money". Not only does increased debt cause countries to pay more interest...but as debt increases, the credit rating gets downgraded and the interest rate goes up causing even more debt. Canada is only as rich as its ability to enable its citizens to earn money and pay taxes.

It would seem only when they are not willing to pay for it. Scandinavian countries rank among the highest when it comes to social programs, per capital incomes and income taxes. They also have much lower debt to GDP ratios than either Canada or the US.

[dre]

Whatever the federal government does: borrow or tax, It makes no difference to my daughters.

Actually it makes a huge difference. If we borrow too much now your daughter will pay higher taxes, get crappier healthcare, drive on unsafe roads and bridges, etc, etc.

Under the current debt/money system theres really no difference between the government and an average household as far as the outlook. Is borrowing good or bad? Depends what you spend it on.

The real question is that in the absense of high inflation why does the government borrow any money at all? As long as inflation remains under 3% or so, they could simply make money at the mint to pay their employees and fund their programs. They wouldnt owe anybody a dime. In theory of course this would cause inflation, but until it actually DOES it makes no sense to sell bonds or bills, or pay anyone a dime in interest. Especially since a lot of governments have been easing credit to prevent deflation.

Edited May 18, 2014 by dre

[socialist]

exactly. SOCIALIST countries like Sweden,Norway, Finland have the highest standard of living in the world. Finland has the world's BEST public education system in the world. Coincidence? Nope. Just socialist societies that care about the little people and not driven by neo liberal corporatist profit first capitalist pigs; It amazes me how little a majority o members on this forum are ignorant about the way the world works., I'm tired of dumb-dumbs., and this forum is full of dumb-dumbs.

[Shady]

exactly. SOCIALIST countries like Sweden,Norway, Finland have the highest standard of living in the world. Finland has the world's BEST public education system in the world. Coincidence? Nope. Just socialist societies that care about the little people and not driven by neo liberal corporatist profit first capitalist pigs; It amazes me how little a majority o members on this forum are ignorant about the way the world works., I'm tired of dumb-dumbs., and this forum is full of dumb-dumbs.

If you don't care about government debt, than you don't care about public education. You're a closet neo-liberal.

[PIK]

I wish the 1st 12 billion ONT brings in, was going to anything but servicing the debt.

[Keepitsimple]

exactly. SOCIALIST countries like Sweden,Norway, Finland have the highest standard of living in the world. Finland has the world's BEST public education system in the world. Coincidence? Nope. Just socialist societies that care about the little people and not driven by neo liberal corporatist profit first capitalist pigs; It amazes me how little a majority o members on this forum are ignorant about the way the world works., I'm tired of dumb-dumbs., and this forum is full of dumb-dumbs.

If you so "exactly" agree with Wilbur, you might want to focus on his last point:

It would seem only when they are not willing to pay for it. Scandinavian countries rank among the highest when it comes to social programs, per capital incomes and income taxes. They also have much lower debt to GDP ratios than either Canada or the US.

.

Countries can choose their priorities - but you have to pay for them - with real, hard-earned money, not debt. Who's the dumb-dumb now?

Edited May 18, 2014 by Keepitsimple

[GostHacked]

People who save money for retirement who buy bonds directly or via institutions like pension/mutual funds. A high savings rate is why Japan is able to support a debt of 200% of GDP which would have triggered a crisis in any other country.

Japan like most industrialized nations have a large elderly population. And supporting the debt is only as good as the last year's budget. It won't take much for the entire Japanese economy to collapse because of this. A growing old population that needs care beyond the projected years, and a young workforce that is having problems finding work due to the explosion in technology that replaces people in many jobs. So you have a work force shift at the same time of trying to support the old people while barely supporting yourself. Crunch time is coming. Are you ready?

[GostHacked]

This thread smells like classic troll bait.

I know what triggered this. I was in chat (for once) and Socialist was having a hard time wrapping his head around the notion of a global economic collapse.

[socialist]

I know what triggered this. I was in chat (for once) and Socialist was having a hard time wrapping his head around the notion of a global economic collapse.

Because a global economic collapse is tin foil hat stuff. You and Charles Anthony said a collapse could happen before 2015, causing Canada not to have an election. I was talking in school about our chat the other night and we all concluded that you guys have your tin foil hat on too tightly. I proved you wrong and you got upset.

[Shady]

Because a global economic collapse is tin foil hat stuff. You and Charles Anthony said a collapse could happen before 2015, causing Canada not to have an election. I was talking in school about our chat the other night and we all concluded that you guys have your tin foil hat on too tightly. I proved you wrong and you got upset.

A global economic collapse is irrelevant. Too much debt means funding for other programs get squeezed out. Like public education.

[TimG]

The real question is that in the absense of high inflation why does the government borrow any money at all? As long as inflation remains under 3% or so, they could simply make money at the mint to pay their employees and fund their programs.

Any government that adopted a policy printing currency instead of issuing bonds would quickly see hyper-inflation appear. That said, you are not completely wrong. When inflation is low the central bank can reduce pressure on governments by buying government debt. The only caveat is the government cannot depend on this assistance since inflation can emerge at any time. This means governments still have to control spending even if the central bank is helping out in the short term. Edited May 18, 2014 by TimG