Ironically, while government officials and top policymakers continue to sound the alarm about growing household debt, government debt is arguably a far more pressing concern. Over the past 26 years, government-sector debt (gross) in Canada has grown from approximately $700 billion in 1990 to more than $2.5 trillion in 2016. However, whereas recent increases in Canadian household debt have been accompanied by increases in net worth, the same cannot be said about government debt.
They say that like the “government” is somebody else.
The bankrupt welfare state(s) is the single most important issue and yet one of the least most covered topics in modern politics. Party till you puke!
A not-so-happy 100th birthday to income tax in Canada
the 100th anniversary of federal income tax—introduced in Parliament in the summer of 1917—we have a reminder of how taxes often start: wars, with the new imposts rarely ending after a conflict stops.
…
Did White intend the federal income tax to be permanent? Given his reluctance over multiple years to introduce it, it seems unlikely. He anyway realized the decision about its permanence was not likely his to make. From his speech that year: “I have placed no time limit upon this measure, but merely placed upon Hansard the suggestion that a year or two after the war is over, the measure should be definitely reviewed by the Minister of Finance and the Government of the day, with a view of judging whether it is suitable to the conditions which then prevail.”
Thus was Canada’s first federal income tax born; the rate began at four percent for any income above $1,500, or about $24,500 in today’s dollars.
http://www.msn.com/en-ca/news/canada/a-not-so-happy-100th-birthday-to-income-tax-in-canada/ar-AApgEr7?li=AA521o&ocid=ientp
“…top policymakers continue to sound the alarm about growing household debt…”
Because they don’t want us riding the inflation gravy train like they do.
“Ironically, while government officials and top policymakers continue to sound the alarm about growing household debt, government debt is arguably a far more pressing concern…”
Yup. If the government cannot be fiscally responsible with its debt, what incentive is there for the average citizen to care about household debt?
Why scrimp and sacrifice when government-sector debt makes a mockery of your efforts and contributes to devaluing your savings?
As I like to say to people, what exactly are we getting in return for 20 trillion in current U.S. debt? What fantastic feats of civil engineering like we at least got in the Great Depression (GG Bridge/Hoover Dam)? Are the streets paved with gold? Are our schools the envy of the world? Do we feel secure walking our city streets at night?
What the Fraser report didn’t say, was that governments consider OUR assets, as theirs.
IF, governments ever need to access them……..like our friends in Venezuela appear to be on the verge of.
Just look at the NDP, they don’t view taxes as taxpayer’s money, they view it as THEIR money, until they run out of it……….
“Just look at the NDP, they don’t view taxes as taxpayer’s money, they view it as THEIR money, until they run out of it……….”
Yes. If your money can simply be seized, why have any? Let ’em seize your household debt instead.
Perhaps we should also consider, that quantum physicists, like Justin, believe that they can just print more money and VOILA! Problem solved! All his third world idols have done that. What could possibly go wrong?
“They say that like the “government” is somebody else. ”
Amen. As if public debt isn’t private debt.
Pity the banks wouldn’t say, “A loan? Sure thing. Just pay off your forty-odd thousand share of the public debt first.”
Dan,
Government debt is our debt as much as the article author wanted to put ‘government’ into some kind of distinct entity. Canadians are one of the highest per capita debt societies in the world. When you consider that much of the net worth gain by people is their houses it gets scarier.
Most financial institutions book a loan to market ratio as a indicator of how threatened they would be with a housing downturn. The standard loan to market ratio is 60%. The inferred reassurance is that property values would have to drop 40% before the bank would be in the red in the event of default. What they do not dwell on is the economic scenario that would drive real estate that far down. Nor do they talk about demand for real estate if it dropped. This is a ‘black swan’ scenario which would threaten the entire economy.
Politicians being what they are (wanting their paychecks as well) will take whatever assets they have to from people who have assets to take, so they can stay in power. The classic was the previous NDP government who simply ‘taxed’ 1% of investable assets whether a profit was made with that money or not. It was the late great Dave Barrett who campaigned for a federal seat with a platform of taking the governments ‘share’ of RRSP’s now rather than when owners wanted to draw from it.
I wonder when they will want a buy in from people like me who have cash. the dip sh its in Europe have done it. when will the dip sh it liberals in Canada put us far enough in the hole to steal what we have worked for. that might the one thing that would push me over the edge. Pay attention to who you vote for, YOU IDIOTS.
Back in 2008 the Bank of Canada, along with most other central banks, responded to the financial crisis in the U.S. by slashing interest rates close to the zero bound. This despite the fact that there was no grave financial crisis in Canada and absolutely no threat on the horizon to our banking system. The move was basically done in order to maintain the relative value of the U.S. dollar and its status as a reserve currency. The end result of this tsunami of monetary pumping, however, was to create a housing bubble in Canada and along with it a bubble in government debt. Now that the economy is slowing and interest rates are finally creeping up, several provincial governments are in serious fiscal trouble. With housing prices in major cities rising to unaffordable levels, what will be the impact on our banks when mortgage holders find themselves unable to cope with their payments?
Government debt is not like household debt.
To assume that it is at the start of your argument is to disqualify everything that follows.
Conservatives do themselves no favours when they distort or overstate their case
Canada’s GDP went from 675 billion in 1990 to 1.7 trillion in 2017 – a 250% increase.
The Debt went from 700 billion to 2.5 trillion a 350% increase.
So yes the ratio of debt to GDP is deteriorating but nowhere near what this thread above implies.
We need to be better than those in the left…
‘the government’. ooooh, Kate, very insightful. ‘da gubbamint’ has NEVER been anything than *other humans*.
it is NOT some disembodied thought control machine that . . . . . uh, ummm, well . . . . .
p.s., the world economy is a giganormous Ponzi scheme. all Ponzi schemes eventually collapse.
I have a gut feeling I’m going to be pretty much free of my high interest debt in time to miss the ‘asteroid’.
at which time the cash I have will have HUGE buying power.
350% MINUS 250% AND THAT IS SUPPOSED TO BE A GOOD THING?