Some Uncomfortable Facts For the Entitlement Generation

"Those were the days my friend
We thought they'd never end
We'd sing and dance forever and a day"

We're in the same boat as the EU, no politician wants to be the villain who bursts the bubble.

Maybe we should send our PM the phone number of Chris Christie.

Canada (like the rest of the so-called western world) has a major one-two punch coming at us as a result of debt and demographics.

The following link is to a blog post which discusses the demographic hit which is coming at us. The first part of the post has the Canadian debt statistics from several months ago. The second part of the post which starts with the phrase "To add insult to injury another huge challenge facing us is the demographic time bomb which is coming at us." (which begins about 1/4 of the way down the page) discusses the demographic challenges coming at us'

http://www.bloggingtories.ca/forums/topic10119.html

I no longer believe that Mr. Harper is listening.

Its going to make its come back.
Thank you Obama.
Thank you Mr. Harper fo so quickly forgetting what Albertans know all to well. Boom & bust.
This generation hasent even got the population to keep what they have , let alone recover. Thank you Margeret Sanger.
Add in PC, kangaroo courts, Multiculturalism & you have a rip tide of economic woe cresting.
JMO

Great Depression in Canada Pictures

Pictures of the Great Depression in Canada

By Susan Munroe, About.com Guide

The Great Depression in Canada lasted for most of the 1930s. Pictures of relief camps, soup kitchens, protest marches and drought are vivid reminders of the pain and desperation of those years.

http://canadaonline.about.com/od/historyphotos/ig/Great-Depression-Canada/

Taxes now consume more of the average Canadian Family Budget than Food, Clothing and Housing Combined. These are criminal levels of Taxation. Government spending on useless Liberal Programs is now consuming food from the mouths of Canadians. Even a homeless man living in a cardboard box under the freeway, that panhandles has to pay tax, when he spends his money. Ontario is over 320B in debt, Quebec is over 400B in debt. Total of all Provincial Debt and Municipal debt is over 900B. CPP is unfunded to the tune of over 600B. Quebecs QPP is around 500B in unfunded liabilities. The time is fast approaching when Canadian Trough Pigs are going to have to decide what to keep and what to cut. Official Bilingualism around 700B wasted, CBC 1.3B per year, settling Immigrants in comfortably 24B every year, Quebec Treaty Money 8B a year, Indian Treaty Money around 8-10B per year. The crash with austerity is fast appraoching. The Liberals sold off 700Metric Tonnes of Canada's Gold Reserves as well. Nothing to shore up our paper money.

OK, stupid question time:

What are the real world consequences of imminent financial doom?
To me this means that gov't will be forced to roll back the welfare state and get out of areas it has no business being involved in. Short term pain but better in the long term, right?

Is the biggest worry Greek-style social unrest or some type of financial insanity like Zimbabwe?
The first type is inconvenient but survivable while the latter seems unlikely for reasons I suggest below.

If all of the wealthiest countries are in the same situation (and the rest of the world relies on us for financial aid, technology, etc.) then will there not be some sort of massive re-ordering that prevents a complete Zimbabwe-like collapse?

Real assets will not disappear in the event of financial Armageddon. Sure, paper transactions will be destroyed but essential services and products (hospitals, electricity water treatment plants, food production) will still function, right? Already poor countries will suffer but modern countries with modern infrastructure will muddle through (just with far fewer entitlements). Modern countries that no longer trade, mine or manufacture real products will of course experience rapid decline but places like Canada, US, Australia, Germany etc. can return to these industries.

In most other doom scenarios the real world implications are clearly spelled out but global financial bankruptcy is strangely missing this key component.

I was tempted to post anonymously to retain a shred of dignity when my question are answered with something obvious that I should have figured out on my own. Then I thought back to the last Canadian election - if journalists, pollsters and other professionals don't mind looking foolish and wrong so often, then why should I.

Short answer: no. Longer answer: maybe, and thinking about how he'll expand government to 'fix' it.

Get out of debt, get some hard assets, some real estate.

When the music stops, you won't have to scramble for a chair and you can enjoy the spectacle.

If you owe the bank a million dollars - you got a problem.

If you owe the bank a billion dollars - the bank has a problem.

It's the only simple way of hoping this doesn't turn out too horribly?!?

LC Bennett's rhetorical question has at least one sobering answer. Those who have not will resort to violence to take what they need from those that have. The division will not necessarily be between have and have not countries - even in the richest countries there are have not factions who are currently kept at bay by the welfare system.

Philanthropist

I don't have a lot of faith in "the too big to fail" doctrine.

It seems to me more like "the bigger(read indebted) you are the harder the fall".

I hope I'm wrong.

Paper money represents a store of value for work that has previously been done. paper money has its problems, but as long as work is being done, value is being stored and the quantity of paper money in circulation grows at the same rate as value in the economy the system works.

I think the problem is that the money supply and central banks are controlled by governments and governments stay in power by buying off voters with "entitlements". When the value of entitlements grows at a greater rate that the value of the economy and all the past stored value is spent the wealth of the economy will shrink. This shrinkage will be reflected in the value of paper money. If there are no goods or services left in the economy paper money becomes worthless because there is nothing to buy with it.

In the US, the government is broke. They can't or won't tax any more, they can't borrow any more, so they print money. If the wealth of society has not increased, but there is more money in circulation, the money isn't worth anything. By allowing inflation to occur, the government is stealing your savings. All the money that you saved over the years becomes worthless in a high inflation economy. It also has the effect of wiping out debts. This is how they are trying to bring their debt problem under control. They will inflate it out of existence. Of course if they also have no plans to change their spending habits it won't get any better.

I think we are heading for a period of hyper inflation. Best thing to do is borrow as much money as you can and buy something of real value and then pay off the debt with worthless paper. This is basically what governments around the world are trying to do.

There was a time in Canada when the different banks issued their own bank notes. If you didn't like the way one currency held its value, you could always use a different one. You still can, you can buy a different currency with your savings and hope that it retains its value, but all currency is now controlled by governments and as such can't be trusted

Canada is a very wealthy nation: we have minerals, forests, food, and fresh water. Canada, however, does not allow citizens to use the land - we are, as my Grandad would say, land poor; too much land to pay taxes on and no way to develop it because the taxes eat up all the cash.

Why are Canadians allowing the Chinese communists to mine gold in the Yukon - with their own slave labor -the gold not for Canada to buy and keep but for the Chinese to keep? Canadian companies cannot use slave labor to mine for gold in the Yukon. Why do we sell our lumber dirt cheap to Asia instead of insisting on selling finished products? Why are there no pasta or flour plants located in the prairie provinces? Why do Parks and reservations occupy so much good agricultural land? Greenie Bolsheviks are dictating our approach to wealth and that approach is to regulate citizens into poverty. The PC approach makes free enterprise impossible unless a person has lots of money or/and is sponsored by the greeies. Nobody wants what the PC/greenie crowd peddle because it is dull as dirt.

Canadian farmers/ranchers cannot sell their own beef/produce to other citizens without a middle man. A person cannot open up a donut shop in their backyard porch, everything is regulated by 10 gument paid regulators (except foreign profiteers)!

All entertainment and eateries are regulated to the point of stupidity. In Whitehorse people cannot smoke on patios - but they can on the sidewalk one foot from the patio tables. One local eatery has lost half it's summer revenue because of that bone head law. Fishing has lost much of the fun because most citizens cannot keep and eat what they catch.

Canada is a PC brainwashed nation and if the citizens choose to have a depression it will be their own fault, not the fault of our big beautiful country. Most of the people I know do not even bother to grow a garden because land for building lots is so expensive and postage stamp sized; we have millions of acres of arable land; unpeople and untilled. Citizens sit in rinky dinky city apartments watching T.V. because the land is not for sale. To build a house on any land that a person owns is also regulated to the teeth.

Over taxation creates depressions. We have that in Canada and we have people in debt. The people are so over regulated that they would be as helpless as new born babes if the system shut down. Most of them don't have a clue about shooting a rabbit and cooking it or shooting and dressing a goose or a moose. The citizens of Canada who conquered the great depression and the Nazis were tough and savvy and they had strong morals (pounded into them at home and at school), they were the sons and daughters of pioneers and soldiers; they knew how to fight and they knew how to survive - they did not turn into a blood thirsty mob - they saved our nation from the Communists - they did not save it for what it has become today.

For the first time in our history we have a Prime Minister who is on the same side as the freedom loving, independent thinking spine of the nation. We should have his back on this because there are a whole flock of msm and gument 'entitled' ilk who are desperately trying to knee cap him and the Conservative government before they turn this country into a big, prosperous, nation with independent entrepreneurs running the show. Think of how the Troika (dippers/Liberanos/blocheads) would be doing had they won the last election. The Good Lord was looking out for Canada during the last election; the good guys won; however, the good guys have to get along with the commi outfit in USA and the same ilk of blood thirsty slavers lurking in dark corners all over the world. Our PM is faced with a big pink mountain in foreign affairs, he has a lot on his foreign plate - then there is the artsy fartsy progressive msm and whiners (including con conservatives) on the domestic plate. Everyone wants a piece of the gument, nobody wants to help.

The Yukon is a good example of the 'gimme, gime' crowd, this territory is fueled with billions of $$ from the productive provinces (Alta and Sask!), the gument throws $$ around like water to their pals and 'eco projects' and first nation chiefs. Start by demanding that the 30,000 people here pay their own way; instead of sitting on their resources (like toads on a stool) and farming out the gold treasure to the Chinese for a pittance of royalties - mine their own gold and pay for their own projects. Mine natural gas and help Alaska build that pipeline. The Yukon is a mini Quebec; both in dire need of a reality check, IMO. I'm speaking of the squawking citizens living in these jurisdictions, not the actual land that they are sitting on. The land is excellent and waiting for a worthy man to mine the riches ("The Law of the Yukon" - Robert Service).

Good comments and thoughtful insight all SDA commentators.

I commend the Blogging Tories blogger for putting some facts behind his analysis by linking to sources which detail aggregate debt but that doesn't excuse trotting out an incomplete argument.

Debt levels are usually compared to both income and assets, not just income alone.

Personal debt levels have been rising, OK, but what's been happening to personal net worth? The day before I take on a home mortgage I may be debt free, and the day after I'm loaded with a huge debt but I also have a corresponding asset tied to that debt.

Business debt has been increasing, OK, but what is the cause of that increasing level of indebtedness? Are businesses operating at a loss and borrowing money to keep operating while they're unprofitable or are businesses increasing debt levels because taking on more debt creates more opportunities to earn even greater revenue and generate larger profits?

Governments are piling on debt but where is the spending going? Is it predominately going to the redistribution Ponzi scheme or it is being used to develop assets which, in the aggregate, increase Canada's economy?

I'm not saying that the blogger was wrong in his conclusion rather my point is that the evidence he marshaled didn't support his conclusions because his evidence is only one piece of the puzzle.

Look, a young person can take on debt in order to train to be a welder or an engineer or a performance artists specializing in lesbian angst. It's highly probably that two out of the three career paths are going to generate positive returns that justify taking on the personal debt in the first place. Simply pointing to increased debt levels doesn't tell us anything useful.

Precisely right, Bobby. What's missing in the piece is any consideration of what the debt was invested in. By the logic of some posters here, all new business investment is bad, because it is all done on credit. No sane company plunks down working capital to build a new plant; it's all done through debt.

Now, what was the government recession package invested in? Primarily infrastructure. In short, hard assets which have value and will enable more over time.

Jema, think before you type. "- with their own slave labor -"

Since when did Canada suspend its own labour laws? Prove that allegation, buddy, or confess that you're just blowing smoke out of your @$$.

"Canadian farmers/ranchers cannot sell their own beef/produce to other citizens without a middle man."

Since when do ranchers want to run their own mini-slaughter house? Hence a middleman. And do try to remember just how many cattle infections there have been over the past 20 years. Every one of them has meant a ban on Canadian beef exports. Your dumping of middlemen means abandoning any verifiable quality control, killing Canadian beef exports and putting most of the cattlemen out of business.

Just so you know, Canada averages 1600 fatalities annually from food borne illnesses, half of which come from salmonella. The hospitalization rate is about 24/1000. And if the boneheads who want to make pasteurization optional, the disease rate will be much higher thanks to bovine tuberculosis.

Regulations save lives. The question for you is, how many people are you willing to let die to dispense with regulation.

"Regulations save lives. The question for you is, how many people are you willing to let die to dispense with regulation" cgh

From reading past posts of yours, I assume you know that not all regulations save lives. The better question is, how many regulations are actually necessary and let's dispense with those that do nothing but enrich gov't and unions.

LC if they did that there would only be a few regs left.

Perfect!

I think Jema 54 meant wheat and barley growers.

bobby has it right. Not all debt is bad. We had debt during our whole farming career and used it to improve our efficiency or expand the land base. It was not used on frivolous items.

Too much or too easy consumer debt is bad. In my opinion all government debt is also bad.

As has been shown lately, both in the Craven valley water pumping and in the BC sport and industry fishing, Oceans and Fisheries has too much power and accompanying regulations. They also have too much power in regards to culvert replacement.

I heard yet another story about DFO: One of Sask's hydro stations bought $100,000+ worth of ATVs to comply with the the DFO's fish rescue nonsense. After spilling, an employee has to travel up to 2 miles along each bank to save fishies. These regulations have nothing to do with wildlife management. It's all about maximizing revenues through fines by making up silly rules that are virtually impossible to comply with 100% of the time.

LC: "From reading past posts of yours, I assume you know that not all regulations save lives. The better question is, how many regulations are actually necessary and let's dispense with those that do nothing but enrich gov't and unions."

There's no question about this, LC. But to jump from this to "no regulations are necessary at all" as some are prone to do here is nonsense.

The problem is that most of the public, including many here, are delusional about what constitutes real risk as opposed to perceived risk. In a democracy, governments have to respond to the perceived risk of the public. Or they get voted out.

Which is the first reason why we have so many stupid regulations.

The second basis for stupid regulation is government coercion regarding life style. Again, mostly this is foisted on us by coercion and pressure exerted by special interest groups and a lot of questionable science in epidemiology.

The third major reason is the fetishization of the environment. Twenty years ago, environmental protection meant protection of species. Today it means protection of all individual members of species. No, to refer to your DFO example above, it's not about maximizing fines. It's much worse than that. It's institutionalizing religious crazies and their religious beliefs. Again, mostly this comes as pressure on government from the ENGOs.

In all three cases, the ignorance of the public, the voters, is largely to blame for why these things happen. Blaming government simply avoids placing the blame where it belongs: on us for allowing idiots to stampede us into one bogus health or environment scare after another. The result is that necessary regulation gets lumped in with stupid or vicious regulation and all gets condemned together.

Ken, you won't have me arguing about the fact that DFO has too much power. That however is the way their enabling legislation is written. The Canadian Environmental Assessment Act is riddled with references to DFO and its Act. In many instances like this, stop blaming the bureaucrats automatically for all this stuff. They're doing what the politicians ordered them to do by statute. Start blaming the stinking ENGOs who are the authors of all of this garbage.

The situation with debt is that debt becomes bad when it exceeds the individual, corporation or countrys ability to repay the debt in a reasonable amount of time. the banks used to look at the income and the debt liabilities and assigned a maximum percentage that was allowed. The other factor that must be considered is the amount of unsecured debt because it is a measure of the risk involved due to forfeiture.
When I hear the Americans talking about raising the debt ceiling alarm bells go off. If we can just keep raising our debt ceiling when will we make the decisions to become fiscally responsible. The second fact that disturbs me is the ratio of debt to GNP that exceeds 33% and in some cases is threatening to exceed 100%. The countries are spending so much of their revenue to service the interest on the debt that they will never be able to recover, especially when their debt rating deteriorates and the interest rate climbs. Governments that continue to accept the entitlement culture are definitely doomed to failure down the road.
we have seen some change of direction by government of Canada in the last while, they they need to continue down this path. I agree that it is difficult to change this overnight but like the song 'I need 40 acres to turn this rig around' the government must turn the wheel and lock it in place to be successful. As long as there is movement in the right direction Canadians need to be patient, but any diversion from this need to be met with condemnation from the right thinking Canadians.

Comments on Regulations etc. Do we need some regulation? Yes. Do we need the amount of regulation that we have in Canada today? NO. In Canada today the taxpayer suffers under a burden of laws, rules and regulations that amount to a stack of paper consisting of over 500,000 PAGES of rules, laws and regulations made out in both official languages. This is a stack of paer over 10 stories in height, that our union scale bureacrats cannot reach the top of with an extension ladder. The regulatory burden is over 100B per year on the consumer as all such regulation is passed down to the lowest common denominator. The only ones really benefitting from the massive Velvet Gulag of Canada are the civil servants who are shuffling the mostly useless regulations. Canadians long ago contracted out their own common sense to governments who now dispense reams of regulations trying to control every aspect of all Canadians lives. Under the chant of it takes a village, and if even 1 life is saved it is worth it. ie; see recent regulations in the US regarding the wearing of life jackets while going near any body of water. Unpasteurized milk, CWB etc, etc, etc. Canadians have become slaves inside a Velvet Gulag. It has reached the absurd. In Alberta, for example a licensed carpenter with 4 years of trade college can not legally build a roof rafter, unless it has been certified by an engineer. Yet noone can show just cause. Has Alberta had a plague of crushed and dead homeowners in the last hundred years to justify this level of regulation? NO. But it is a easy way to skim more money from trembling, frightened, citizens who believe that their homes are all going to fall in and kill them. Even tho people have been building homes in Alberta for over 100 years and no one can show cause for the regulation. Do we need some regulation on building homes probably. Do we need some common sense? Yes. Ah the sweet caccoon of regulation and control. But, but will Canadians still do something stupid that will lead to their harm etc? YES. Even if we are so regulated that each one of us is finally assigned our own civil servant to live with us and try to make sure we follow all the rules and regulations, some of us will still make mistakes or fall victim to our own follies. The Velvet Gulag and one more Slave Rowing At The Oars of the Slave Ship Canada. Bound and Gagged for their own good. Order some more SOMA the b*stards don't know what is good for them.

cgh http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=94640&sn=Detail
Most mining companies in the Yukon are not based here. Chinese multinationals and Chinese government backed mining companies are currently driving the vast majority of mining development in the Yukon. The high paying jobs in mining are definitely not in the Yukon. Head offices and investors are, by far, located somewhere other then the Yukon.
The profits from Yukon’s resources invariably go outside the Yukon. Royalties on those resources are a joke (Yukon’s royalty on gold is based on a price of $16/ounce - current world gold price $1400/ounce.) A large part of the future workforce needed for mining in this territory will come from somewhere else (the days of mining towns are over). These workers will live and pay taxes somewhere else. For this we should give up a world class wilderness area that can never be restored to what it is now. The planning commission was correct in advising caution.
Bob Wagner

"Canadians long ago contracted out their own common sense to governments" From experience I would have to have limited disagreement with that statement. Canadians by and large are too busy getting by to pay attention to what the 'civil service' is cooking up. Most 'regulations' don't come to the fore at the behest of 'frightened' Canadians seeking a nanny to take care of their every boo boo. Most regulations come, fully grown, from the minds of bureaucrats who personal agenda is 'making Canada better' through regulation. Its not limp wristed Canadians you have to worry about, its agendized bureaucrats you need to keep in check.

Posted by: RFB at 9:02 AM

excellent post, covers a lot of area

the other day OZ posted that he wanted value (gov't regulated work) for his tax dollar, which in my opinion is "velvet socialism". I want the basic service, privately administered when ever possible, with minimal tax dollars extracted, and I will take care of any exceptional items that arise, or hire someone to do them.

Joe, kristians have contracted their common sense out to the "religious dictator" (the church), so socislism is not a large step for someone like you to take!!

Well GYM it would seem your blind hatred for things that last, Christianity, has led to your inability to read or understand what this Christian wrote. I'm not for socialism. I don't want a bunch of regulations controlling my life. My observation was simply that Canadians as a whole are not clambering for more regulation. However leading a full and active lives Canadians are not always in the know as to what will be the next silly regulation that is some bureaucrat's wet dream. Being ignorant of all the regulations we Canadians really can't fight them. Personally I would love to see Ralf Klein's idea of a 'Stupid Rules' tribunal whose mandate is to go through all the regulations and toss about 99% of them in the trash bin of history.

Jema, none of that document you quoted supported your "slave labour" statement. This is a Canadian mining operation of which a Chinese company has equity as a joint venture partner.

Yukon is a tiny place economically. NO mining companies are headquartered in Yukon or at any mine site. They are all headquartered in large financial centres for the purpose of raising capital. Tell me, big guy, just when did Whitehorse become a world-leading financial centre?

Now if you don't like that, then, as good Yukoners, raise your own capital for starting a mine. But don't come sniveling if you want someone to take an equity stake and they want a reasonable profit for the risk they're taking.

Try to understand this; without capital from outside, Yukon would be an uninhabited wilderness. There's lots of places to dig holes in the ground, and if you make life too difficult, the capital would go somewhere else. Just be glad that someone like the Chinese is willing to invest with Canadian partners in that God-forsaken tundra.

So now we see what your cry of "slave labour" really is. A cheap and dirty libel to extort more of the profit from the investors taking all the risks. You're the ones who set the royalty rules. And if you set them too high, well, welcome to Ed Stelmach's Alberta. The greatest gift Alberta ever gave Saskatchewan.

And why are your royalty rates low? Because the transport costs out of Yukon are huge, much higher than say mining gold in Timmins, Ontario. And you're landlocked for all practical purposes. Don't complain to me; geography is a b!tch. Tough noogies, get over it.

I confess I'm still not certain whether you're advocating mercantilism or state socialism, but the net effect is still the same.

cgh - your comments are all correct. My point is that the eco lefties and the Dippers (voted into power in the Yukon in the late 1980's) chased all the Canadian/American independent miners out of the territory with stringent regulation. The last Premier was part of the Dipper crew that drove out the North American miners. The Chinese are being welcomed with open arms, they do not spend money here, they take the gold out of Canada, they are working in open pit mines...it does not cost them as much because they do not have the labor costs because...they use State workers (state owned workers, I call them slaves because they are owned by the state of China, they have no rights)... they are not our friends...wake up cgh!

The link I provided was from a local who has first hand knowledge of Chinese workers (state slaves) from China working in the gold mines. I feel sorry for those poor souls who are dumped in the cold foreign tundra to dig minerals from the unforgiving frozen ground. I have seen the state reps in town but never the workers - they pass through in buses I have been told. When Yukon Nevada signed a deal with the Yukon government it was understood that they could import some of their own labor.

The North American companies that invested here in the 1970's/ early eighties employed Canadians and Americans and paid them well. The employees of the mines in the past lived in the Yukon and made the territory prosperous and vibrant. I know very well how the Yukon has fallen into a welfare state ditch but climbing out is not going to happen if it depends on Chinese 'investors'. The answer is to welcome Canadian/American miners by changing the regulations so that they can afford to mine here, IMO.

Read Kate's header to see where I am coming from.

There will not be a deflationary depression. That can happen only when a country is on the gold standard and cannot expand the money supply. On a fiat currency standard the government can and will print money to sustain the process until the debt is worth a lot less or the money is no longer accepted.
An inflationary depression is what we face as the government transfers the wealth of savers to itself and other debtors. Those that do not understand this will be wiped out. We are about to witness the largest transfer of wealth the world has ever seen.