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Welcome to Walter Moore Canada's Blog. These comments are strictly opinion. You can disagree!

Thursday, January 21, 2010

Government Debt Is Killing Us

Updated 2009-11-24
Little did I know when I originally published this how bad things would get around the world. We in Canada are actually looking good(and that scares me). We are still around the same debt as when I originally published this but at least we have not gone further in debt over that time. Paying off debt during surplus years has saved us from spiraling further in debt during this worldwide recession. The USA on the other hand just went 1.2 TRILLION dollars in debt for ONE year!!! That is around $4,000 in debt for every person in the USA. Your family of four owes $16,000 to pay for the debt the government racked up just in 2009. Don’t forget about the other approximate 14 Trillion of previously accumulated debt of the USA. Added up each person in the USA owes over $40k. Got the $160k for you family? What about your neighbours, do they have their money?  And of course we are only talking about Federal debt…don’t forget about state & local debt.
Published 1999-07-08
This should be no surprise. Here in Canada our federal debt is 600 billion(+- a dollar) and we have around 30 million people. This works out to a debt of $20,000 for every person in Canada. So if you have a family of four you owe $80,000. Cough it up. Or pay the $8,000 per year interest in taxes forever. Oh ya, don’t forget your provincial debt.
Close to 50% of all the money our government takes in goes to paying interest on the debt. Think if your personal debt ratio was so high….ya right, as if anyone would let it get that bad(can you say bankruptcy). If the debt was cleared today the government would only need 1/2 the tax money it currently grabs. Not just income tax, all taxes. Our entire society gains, not just one individual or group.
I guess it is me me but I just can’t understand how any government is allowed to get this much in debt. Even stranger is that Canada is actually quite well off in the global economy(says something for the rest of the world). If you walked into any bank and wanted to borrow money and told them that every person in your household was already in debt $30,000 I am fairly sure of the response.
For any person bankruptcy would have occurred long ago. We would not be able to go further in debt. Furthermore we would have to budget ourselves, cut out unnecessary expenses, and probably have items repossessed. We would not like it, but it is a necessary evil.
Now our government actually got a surplus for one year. This only means we didn’t spend as much as we took in. Big deal, we are expected to act this way in society. Instead of taking as much a possible and reducing the debt everyone talks about spending the surplus. That is how we got into this mess. Pay off the debt! Our children and country will be better off for the sacrifices we make now. Although I have been saddled with this debt does not mean my children have to as well. We can make things better for everyone if we are just patient and apply everything we can to reducing the debt. It sucks in the short term but somebody has to pay for this mess.
Government can’t make money……
I have worked for federal and provincial governments at one time or another and this is beyond my comprehension. This is a pervasive situation that needs resolution. At various times while working for governments we would develop a solution that was easily marketable. As IT we would demonstrate the potential to sell the solution. Sometimes we even had a company willing to purchase the solution. We couldn’t do it. Repeatedly I heard “The government is a service, not a business. We don’t make money.”. Personally I think the government is put in charge of Canadian assets and is responsible to maximize their potential. Failure to comply is grounds for dismissal. There is no reason a country as rich as Canada should have any taxes if assets are managed properly.
We can’t go back…..
I hate when government talks about new initiatives. It’s not that I hate the initiative, rather it is that once implemented it is almost impossible to remove it. Even if it is a total failure. Also that future maintenance is rarely calculated or at least under estimated and government income is always overestimated(that is how we got in debt). I would love it if we could support everybody that needed something but we can’t. We must choose carefully where society should intervene. Society provides schools, if you want a special school then it is up to you and your community to support the special school. In no way does society support the special school since the special school takes resources away from society.
Boy am I on a rant today……I could go on forever but I will shut up now.

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