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Comments Effecting Canadian Events – Ken McGregor

Government Debt – The Next Generation Pays

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Someday this will be all yours

Someday this will all be yours

When looking at the way Canada subsidizes its budget deficit and debt to pay for all the goodies we can’t afford, it sure looks like a skeptical scheme to me. It appears they take our savings to finance our budget debt, then pay us interest from the taxes they collect from us . It’s not done quite that straight forward, but in a roundabout way we never question.

Most just look at the national debt as a part of the system. Its  always been with us and always will. So who cares. Well , the next generation taxpayers better care because the higher the debt the more interest it cost to service , and it doesn’t take a Liberal professor or NDP’s Mulcair to figure out where that money is coming from. Presently the net debt is around $580 billion and growing with interest to service the debt of $35 billion annually or $16,500 per person. A dismal start for the next generation considering they also have to pay the provincial debts left to them, especially in Ontario.

The majority of Canada’s debt (80%-85 % ) is owned by Canadians through pension funds, Canadian banks saving accounts etc. , mutual funds and provincial governments. These entities use their funds (that are given to them by you) to buy up government debt. In return these entities get safety for their investment and a return on the investment paid  by the Canadian government, you, the taxpayer. In other words the government borrows money from you through mutual funds etc then pays interest to the fund with tax dollars. The higher the debt grows, the more they borrow, the more tax dollars they need to pay. A seemly never-ending cycle that will eventually come to an end. Like a Pyramid scheme there is no way the government can pay back the debt holders unless each Canadian chips in $16,500, their share of the debt . Fat chance of that, so, around and around we go. As long as the free benefit goodies keep coming , who cares.

Note: It is interesting to note that the government deficit forecast for 2012 is around $25 billion and the amount of interest paid on the debt is $35 billion.

NDP surging in polls. 99% want a bigger piece of the pie

As I mentioned in the beginning , it just seems little deceiving. The more debt the government piles up on our behalf, the more they borrow from us to finance it, using some of that cash to pay us interest. If the government is ever going to get of this merry-go-round it has to start paying off the debt by growing the economy. As citizens we have to get behind government efforts and stop throwing road blocks up like were doing to the Oil Sands developement, a resource that could bring billions into the Canadian economy, and stop demanding unrealistic benefits. if we are to prosper and leave a future for the next generation, who incidentally may be voting in the 2015 election for a social left government like the NDP if their prospects look dim with a mountain of debt to pay, we had better start to take our national debt seriously.

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