Stephen Harper knows alot...

[ReeferMadness]

That's right. Harper blew nearly a billion on ads during NHL games about government plans that didn't even exist, or the party itself.

Shhhh!!

You're going to destroy their mantra. "Harper was a great fiscal manager. Harper was a great fiscal manager. Harper was a great fiscal manager"

[On Guard for Thee]

Shhhh!!

You're going to destroy their mantra. "Harper was a great fiscal manager. Harper was a great fiscal manager. Harper was a great fiscal manager"

[On Guard for Thee]

Shhhh!!

You're going to destroy their mantra. "Harper was a great fiscal manager. Harper was a great fiscal manager. Harper was a great fiscal manager"

Ah right, forgot about that. I guess I just got a little miffed at having a good game interrupted by such drek, and knowing I was paying for it.

[August1991]

How do these type of threads even stand?

The OP is nothing more than unsubstantiated insulting opinion.

There is absolutely no substance to it unless one happens to agree with the ad hominem BS.

Insulting?

I happen to think that Stephen Harper, like Pierre Trudeau, has a remarkable understanding of our country.

Trudeau Snr wrote much about Canada before he became a federal PM. I would be curious to know what Harper thinks about Canada after being one.

[Argus]

Probably because they aren't remotely the same thing.

No? How are they different? If you just pay the minimum payment on your credit card, and keep charging stuff, the minimum payment keeps getting bigger and bigger until it eats up more and more of your disposable income. That is exactly what governments in Canada have been doing, building up their debt so that they now pay $60 billion a year just on servicing it. And those debt service charges rise higher year after year after year.

[Argus]

Shhhh!!

You're going to destroy their mantra. "Harper was a great fiscal manager. Harper was a great fiscal manager. Harper was a great fiscal manager"

Trudeau gave away $2.5 billion to foreigners his first month in office. As a sign of things to come, it doesn't get much worse.

[PIK]

And giving in to the PS on sick days is another 900 million added on. We are doomed.

[Smallc]

No? How are they different?

But the government is not like a household. There are many reasons why financially, governments are not like households. In this context, I am speaking solely of sovereign, currency-issuing governments with floating exchange rates. This means Greece, Ireland, Portugal, Italy and the other Eurozone countries are excluded. I’m talking about the U.S., the U.K., Canada, Japan, Australia, Brazil, and others. There are many reasons why governments are not like households ranging from tax powers vs. wages to unlimited life. But I want to emphasize one in particular: governments are the sole monopoly issuer of their money. Households cannot issue money, only governments can.

So what does this have to do with debt? It means government debt is not like private debt. Government debt need never be paid off. It can be rolled-over. As bonds become due, they are replaced with new bonds. Households can’t always do that. Governments cannot be “foreclosed” or “repossessed”. Households and their goods can be. Households and private firms can go bankrupt and default. Sovereign governments only default when they choose to do so.

http://econproph.com/2011/07/14/private-debt-vs-government-debt/

[Smallc]

Trudeau gave away $2.5 billion to foreigners his first month in office.

Actually that's not true. Nearly half of that sum is previously committed money by Harper, being rolled into the announcement. Much of that money was also a direct fulfilling of campaign commitments (incidentally, the kept to broken promises now stand at a ratio of 4:1). Don't let the truth stand in your way though.

[Smallc]

And giving in to the PS on sick days is another 900 million added on. We are doomed.

The contracts are up for negotiation. Wide ranging strikes would have resulted from that rule being maintained.

[Wilber]

So what does this have to do with debt? It means government debt is not like private debt. Government debt need never be paid off. It can be rolled-over. As bonds become due, they are replaced with new bonds. Households can’t always do that. Governments cannot be “foreclosed” or “repossessed”. Households and their goods can be. Households and private firms can go bankrupt and default. Sovereign governments only default when they choose to do so.

http://econproph.com/2011/07/14/private-debt-vs-government-debt/

It means you don't have to take responsibility for the debt you incur because your great, great, great grandchildren will still be servicing it a hundred years after you are gone and the things you borrowed it for no longer exist.

Debt is debt until it is paid, regardless of the weasel words use to justify not doing so.

Edited January 25, 2016 by Wilber

[TimG]

So what does this have to do with debt? It means government debt is not like private debt. Government debt need never be paid off.

Tell that to Argentina who has been forced to pay back several billion owed to US hedges funds: http://www.huffingtonpost.ca/2014/06/18/lawyer-says-argentina-wil_n_5509926.html

There are two classes of countries when it comes to government debt: countries that can issue debt in their own currency and those that can't. By 1990 a lot of new debt issued by Canadian governments was issued in USD or Yen. This trend would have sent Canada into a Greek style crisis if Chretien did not have the guts to deal with it.

Your kind of thinking will only piss away all of the hard work from the 90s. Debt for Canadian governments can be very bad. The only protection we have from a return to those days is a government that believes in balancing the budget even if difficult times means short term deficits. Trudeau clearly does not and that spells doom for the country. Your logic only applies if a government is committed to balancing budget without paying back existing debt.

Edited January 25, 2016 by TimG

[Smallc]

Your kind of thinking will only piss away all of the hard work from the 90s.

My kind of thinking will continue Canada's debt to GDP ratio on a negative trend. That is the important measure - the growth of debt must be less than the growth of the economy.

Actually, I'd prefer to raise the GST to 7%, but, I doubt you're in favour of that.

Canada has a revenue problem.

Edited January 25, 2016 by Smallc

[Smallc]

It means you don't have to take responsibility for the debt you incur because your great, great, great grandchildren will still be servicing it a hundred years after you are gone and the things you borrowed it for no longer exist.

And that they debt will be so small, that as a percentage, it won't much matter anymore.

[The_Squid]

Your kind of thinking will only piss away all of the hard work from the 90s.

It was the Conservatives who did that in their time in office.

Record deficits. Poor fiscal management.

[Wilber]

And that they debt will be so small, that as a percentage, it won't much matter anymore.

It was that attitude that almost bankrupted us in the early nineties. In April, JT is going to borrow 30B or so and say it is for infrastructure. I can just as easily say he is borrowing it to pay interest on existing debt because if he built the infrastructure without borrowing, he wouldn't be able to pay the interest on the money we already owe.

Servicing our debt does matter because it stops us from doing things without borrowing and the more we owe, the less we can do because we are giving the money to bond holders instead.

[Argus]

And giving in to the PS on sick days is another 900 million added on. We are doomed.

As I've already explained to you, that number is fictitious.

[Argus]

So what does this have to do with debt? It means government debt is not like private debt. Government debt need never be paid off. It can be rolled-over. As bonds become due, they are replaced with new bonds. Households can’t always do that.

This is utterly beside the point. You don't have to pay off your credit card bill either. All you have to do is keep making minimum payments. That is what we're doing with the debt. We're making minimal payments to the tune of something like $29 billion per year. That's money completely wasted, money which could be spent on programs or tax relief. To put it another way, if it weren't for our debt we'd have no deficit. We are borrowing money to pay our credit card bill, which is growing larger every year. And if interest rates ever normalize the debt service cost will double or triple very quickly.

[Smallc]

The difference is that government revenue, with a growing economy, can grow indefinitely. As long as the debt grows slower than the economy, the debt eventually becomes meaningless.

[Bonam]

But the government is not like a household. There are many reasons why financially, governments are not like households. In this context, I am speaking solely of sovereign, currency-issuing governments with floating exchange rates. This means Greece, Ireland, Portugal, Italy and the other Eurozone countries are excluded. I’m talking about the U.S., the U.K., Canada, Japan, Australia, Brazil, and others. There are many reasons why governments are not like households ranging from tax powers vs. wages to unlimited life. But I want to emphasize one in particular: governments are the sole monopoly issuer of their money. Households cannot issue money, only governments can.

So what does this have to do with debt? It means government debt is not like private debt. Government debt need never be paid off. It can be rolled-over. As bonds become due, they are replaced with new bonds. Households can’t always do that. Governments cannot be “foreclosed” or “repossessed”. Households and their goods can be. Households and private firms can go bankrupt and default. Sovereign governments only default when they choose to do so.

http://econproph.com/2011/07/14/private-debt-vs-government-debt/

How many governments in history have had "unlimited life"? Just because governments don't die of old age, doesn't mean they don't die from other causes. Governments have a statistical average life span of about 250 years, it is not perpetual, and is in fact only about 3-4 times longer than individuals.

[Smallc]

Also, governments don't pay interest based on prime rates.

[Argus]

Also, governments don't pay interest based on prime rates.

That actually makes it worse in that the low rates they currently pay will easily double or triple when rates return to normal.

[Smallc]

That actually makes it worse in that the low rates they currently pay will easily double or triple when rates return to normal.

That depends. The Bank of Canada can lend money to the government if need be.

[Bonam]

The difference is that government revenue, with a growing economy, can grow indefinitely. As long as the debt grows slower than the economy, the debt eventually becomes meaningless.

A perpetually growing economy is not guaranteed. As long as everything is going well with the country that the government controls, one may be able to expect a long term average growth rate of a few %. But that doesn't preclude periods of economic contraction or stagnation, which can last decades. And yet these periods are the ones when it would be most helpful to borrow more to try to stimulate the economy. A government that is constantly in debt and relying on continuous growth to keep from drowning in it leaves itself no margin of safety should real world economic conditions turn out less rosy than optimistic forecasts.

The US was able to stimulate its way out of the recession by spending obscene amounts of money, doubling its debt-to-GDP ratio from about 50% to about 100%. When the next recession hits, will it be able to double it to 200% to pull off the same trick again? Chances are not, because at debt being 200% of GDP and typical historical interest rates of 5%, 10% of GDP would go just to debt-servicing, and that's over half the government's total budget, and that level of debt corresponds to credit downgrades which lead to increasing interest rates.

Edited January 26, 2016 by Bonam

[Wilber]

The difference is that government revenue, with a growing economy, can grow indefinitely. As long as the debt grows slower than the economy, the debt eventually becomes meaningless.

If your income keeps increasing you can keep increasing your debt but every dollar you pay in interest is money you can't spend on other things that are important. So why don't governments just borrow for everything and only tax enough to pay the interest on what they borrow?

What happens when the debt eventually increases to a level where growth isn't enough to cover the interest?