August1991 Posted January 27 Report Share Posted January 27 This is a common discussion/argument. Here are my arguments: 1. I first tried that a State will live forever. (I will not live forever.) 2. I tried the idea that my ex-wife can use my debit card or credit card, I still pay. 3. I noted that the Quebec government can borrow at lower interest rates - it can put me in jail if I don't pay. 4. State debt? It could be a Ponzi scheme if a State sells bonds more than the GDP growth rate. Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 27 Report Share Posted January 27 The state has the ability to raise money through taxation. And can pay off the debt over several generations. So, no…. It’s clearly not the same. Quote Link to comment Share on other sites More sharing options...
herbie Posted January 28 Report Share Posted January 28 (edited) 17 hours ago, August1991 said: I first tried that a State will live forever. (I will not live forever.) Just until they take everything you owned when you die. Just read how the wife of an MP who was a CBC camera operator was "forced" to pay her CERB debt. No such headline for mine wife who earned $600 in CPP payments and that's all the year she died was also "forced" (her estate was) to repay $2200 in CERB and an EI overpayment. Lucky she had that much in the bank. Or would they go after 'her half' of the house? Unlike govt you can't play half the games with your debt. Or pull a 1980s Mulroney/Chretien and take and invent more wages from your Boss like they do with taxes. Edited January 28 by herbie Quote Link to comment Share on other sites More sharing options...
Moonlight Graham Posted January 28 Report Share Posted January 28 (edited) The citizens who borrow money, through their government, should have to pay it back. That would be the ethical thing to do. Imagine if we as individuals had the ability to charge our credit cards and force our grandchildren, or other's grandchildren, pay for it. Edited January 28 by Moonlight Graham Quote Link to comment Share on other sites More sharing options...
August1991 Posted January 31 Author Report Share Posted January 31 On 1/27/2024 at 3:21 PM, TreeBeard said: The state has the ability to raise money through taxation. And can pay off the debt over several generations. So, no…. It’s clearly not the same. IOW, the State can borrow at lower interest rates than any individual. Most lenders look at credit rating. history before deciding the interest rate. Borrower A: I missed a few payments last year. But I have a job. Borrower B: My rich uncle gives me money every month. Borrower C: I have access to the bank accounts of Bill Gates and Laurene Powell Jobs and I can take money from them any time I want. Guess which borrower gets the lowest interest rate? 1 Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 31 Report Share Posted January 31 (edited) On 1/27/2024 at 10:11 PM, Moonlight Graham said: The citizens who borrow money, through their government, should have to pay it back. That would be the ethical thing to do. Imagine if we as individuals had the ability to charge our credit cards and force our grandchildren, or other's grandchildren, pay for it. What if your grandchildren benefited from the widget you borrowed money to build? Say one of them was poor, so he only had to pay back a little, and the other was rich and he had to pay a bit more? But neither paid for the whole thing, as it was also being paid for by their children or grandchildren as well? Multiple generations benefitting from the widget that the original loan built, paid off over generations based on how wealthy they were. That would be a better analogy. Edited January 31 by TreeBeard Quote Link to comment Share on other sites More sharing options...
Michael Hardner Posted January 31 Report Share Posted January 31 11 hours ago, TreeBeard said: What if your grandchildren benefited from the widget you borrowed money to build? Let's make this example more relatable by changing widget for BRIDGE. A government builds a bridge, and the benefits are spread over decades. How does it make sense to use all of today's reserves for it? This is how it was explained to me... 1 Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 31 Report Share Posted January 31 5 hours ago, Michael Hardner said: Let's make this example more relatable by changing widget for BRIDGE. A government builds a bridge, and the benefits are spread over decades. How does it make sense to use all of today's reserves for it? This is how it was explained to me... Yes, I agree. I was trying to meet them at the “household debt is the same as government debt” argument. It’s a terrible argument, but conservatives use it a lot. 1 Quote Link to comment Share on other sites More sharing options...
Moonbox Posted January 31 Report Share Posted January 31 1 minute ago, TreeBeard said: Yes, I agree. I was trying to meet them at the “household debt is the same as government debt” argument. Except in a lot of ways it is. Frivolous spending is still frivolous spending, whether it's financed by government or household debt. 1 minute ago, TreeBeard said: It’s a terrible argument, but conservatives use it a lot. In some contexts yes, in others no. Michael brings up a good example about financing a bridge that will provide value to its community for generations. The same can't be said the non-productive expansion of our public service and bureaucracy or for wasteful subsidies/handouts. Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 31 Report Share Posted January 31 (edited) 8 minutes ago, Moonbox said: Frivolous spending is still frivolous spending, whether it's financed by government or household debt. The difference is not the value judgement we make on whether it’s frivolous or not, it’s how the debt is serviced and how government funds are different from household funds. Like servicing a debt over many decades, or being able to raise money via taxation, or the debt becoming lessened by GDP growth. 8 minutes ago, Moonbox said: The same can't be said the non-productive expansion of our public service and bureaucracy or for wasteful subsidies/handouts. Thats a value judgment still, and not how government debt actually works vs household debt. Saying “this is wasteful” tells me nothing about how the debt is actually handled. https://en.wikipedia.org/wiki/Government-Household_analogy Edited January 31 by TreeBeard Quote Link to comment Share on other sites More sharing options...
Moonbox Posted January 31 Report Share Posted January 31 27 minutes ago, TreeBeard said: The difference is not the value judgement we make on whether it’s frivolous or not, it’s how the debt is serviced and how government funds are different from household funds. I don't think anyone is seriously arguing that household debt is managed the same way as public/government debt. The comparison is drawn as a simple heuristic to bring one simple reality home: Money spent on things you want today, must be repaid in the future. If the thing you want today provides no future benefit, you've impoverished future-you for the sake of today-you. Quote Link to comment Share on other sites More sharing options...
Michael Hardner Posted January 31 Report Share Posted January 31 3 minutes ago, Moonbox said: If the thing you want today provides no future benefit, you've impoverished future-you for the sake of today-you. Sure but it's all subjective and arguable on intangible grounds... Did CERB provide future benefit for millions of Canadians and future Canadians being able to continue with their lives or did it impoverish future Canadians. Interesting debate, for some... 1 Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 31 Report Share Posted January 31 1 hour ago, Moonbox said: I don't think anyone is seriously arguing that household debt is managed the same way as public/government debt. The comparison is drawn as a simple heuristic to bring one simple reality home: Money spent on things you want today, must be repaid in the future. If the thing you want today provides no future benefit, you've impoverished future-you for the sake of today-you. If we’re going to boil it down to a meaningless slogan like “don’t waste money”, then I agree; government debt is the same as household debt. But…. Is that really all that useful? Quote Link to comment Share on other sites More sharing options...
Moonbox Posted January 31 Report Share Posted January 31 1 hour ago, Michael Hardner said: Sure but it's all subjective and arguable on intangible grounds... Some of it is, but some of it isn't. There are objective measurements that can be used. None of them are perfect or comprehensive on their own, but they can pull away the veneer of "subjectivity" when studied together. 1 hour ago, Michael Hardner said: Did CERB provide future benefit for millions of Canadians and future Canadians being able to continue with their lives or did it impoverish future Canadians. Both. CERB was needed and justified, but not at the level it was provided, nor for as long as it was. The amount of excess savings that Canadians built up while receiving CERB benefits is one of those objective measurements we can use, and it's something that the economists have commented on extensively. 21 minutes ago, TreeBeard said: If we’re going to boil it down to a meaningless slogan like “don’t waste money”, then I agree; government debt is the same as household debt. But…. Is that really all that useful? Evidently it is, because our ballooning public debt is barely a topic worth mentioning today. Quote Link to comment Share on other sites More sharing options...
Michael Hardner Posted January 31 Report Share Posted January 31 9 minutes ago, Moonbox said: 1. Some of it is, but some of it isn't. There are objective measurements that can be used. None of them are perfect or comprehensive on their own, but they can pull away the veneer of "subjectivity" when studied together. 2. Both. CERB was needed and justified, but not at the level it was provided, nor for as long as it was. The amount of excess savings that Canadians built up while receiving CERB benefits is one of those objective measurements we can use, and it's something that the economists have commented on extensively. Evidently it is, because our ballooning public debt is barely a topic worth mentioning today. 1. Well, I agree that's true for components of the whole but we talked about 'value' which is philosophically subjective. 2. Yes, I can agree with that part. 3. If the US is deficit spending to a huge degree, isn't something askew if we don't spend a *little* more ? I think the IMF has something to say about such things too. Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 31 Report Share Posted January 31 21 minutes ago, Moonbox said: Evidently it is, because our ballooning public debt is barely a topic worth mentioning today. Except you’re discussing the topic by making a false analogy. Not useful at all. Quote Link to comment Share on other sites More sharing options...
Moonbox Posted January 31 Report Share Posted January 31 27 minutes ago, TreeBeard said: Except you’re discussing the topic by making a false analogy. Not useful at all. What analogy is that? 39 minutes ago, Michael Hardner said: 3. If the US is deficit spending to a huge degree, isn't something askew if we don't spend a *little* more ? I think the IMF has something to say about such things too. I really don't think Canada should be following the US's example, and not just because we don't have the luxury of sheltering behind the USD's reserve status. Quote Link to comment Share on other sites More sharing options...
TreeBeard Posted January 31 Report Share Posted January 31 8 minutes ago, Moonbox said: What analogy is that? The government debt is like household debt analogy. Quote Link to comment Share on other sites More sharing options...
Moonbox Posted February 5 Report Share Posted February 5 On 1/31/2024 at 4:13 PM, TreeBeard said: The government debt is like household debt analogy. But it isn't. Your assessment of the analogy, or analogy in general perhaps, is false. An analogy is not comparing two of the same things, but rather two things that share some similarities. In this case, (I think) August is bringing up the point that there's no free ride when it comes to debt. The fact that government can take longer to pay it back wasteful debt spending and hoist the burden on future generations is about as smart as borrowing to buy big screens. Feels good now, not so good later. Quote Link to comment Share on other sites More sharing options...
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