Author Topic: Government Day-to-Day  (Read 13996 times)

0 Members and 0 Guests are viewing this topic.

Offline MH

  • Full Member
  • ***
  • Posts: 9017
Re: Government Day-to-Day
« Reply #180 on: February 10, 2020, 11:30:16 am »
  Conservative politicians feed on this ignorance to dupe working class people into voting against their interests (ie, conservative parties engaging in reverse Robin Hood policies).

That's not always true, Cyber.  Republicans have stopped talking about the deficit for some reason and the Tea Party is strangely silent.

In serious news, I agree that people are woefully uninformed about debt, deficit and so on.  I feel that we are currently paying for infrastructure with our deficit which is ok by me.  That said, we can probably afford to hike taxes a little bit and improve our services, ie. INVEST in our services.

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #181 on: February 10, 2020, 11:49:15 am »
Someone on twitter described measuring debt nominally as crayon economics.  I think they might be on to something.

Tell that to your bank.
"Never trust a man without a single redeeming vice" WSC

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #182 on: February 10, 2020, 11:53:19 am »
That's not always true, Cyber.  Republicans have stopped talking about the deficit for some reason and the Tea Party is strangely silent.

In serious news, I agree that people are woefully uninformed about debt, deficit and so on.  I feel that we are currently paying for infrastructure with our deficit which is ok by me.  That said, we can probably afford to hike taxes a little bit and improve our services, ie. INVEST in our services.

We aren't paying for infrastructure, we borrow to build it all we do is carry the interest, we aren't actually "paying" for anything.

It's the same as me buying a car on a personal line of credit and never doing more than paying interest on the balance. One day the car is worth nothing but I still owe the same amount of money for it.
« Last Edit: February 10, 2020, 11:55:21 am by wilber »
"Never trust a man without a single redeeming vice" WSC

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #183 on: February 10, 2020, 12:00:28 pm »
Today's Republican party is socially conservative and its primary objective is staying in power regardless of the cost. They are certainly not fiscal conservatives.
"Never trust a man without a single redeeming vice" WSC

Offline cybercoma

  • Full Member
  • ***
  • Posts: 2922
Re: Government Day-to-Day
« Reply #184 on: February 10, 2020, 12:09:50 pm »
Tell that to your bank.
National economies do not work like personal finances.

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #185 on: February 10, 2020, 12:19:14 pm »
National economies do not work like personal finances.

Yes they do. If you borrow more money, you need more income to finance the debt. If you don't pay off the debt, you have to carry the interest until you do. What did you think debt to GDP means?

A few years ago BC replaced the Port Mann bridge at a construction cost of 2.5 billion. In another 60 or 70 years that bridge will need replacement and will probably cost four or five times as much. Aside from paying interest on that 2.5 billion for 60 or 70 years, do you think that 2.5 billion debt will just disappear along with the old bridge when it is torn down?

This is pretty basic stuff.
« Last Edit: February 10, 2020, 12:26:04 pm by wilber »
"Never trust a man without a single redeeming vice" WSC
Dumb Dumb x 1 View List

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #186 on: February 10, 2020, 12:24:29 pm »
National economies do not work like personal finances.

If you don't think borrowing and not paying it off matters, just look at the US.

When Obama left office, interest on the US federal debt was 280 billion, now it is over 400 billion and is on track to be over 700 billion by 2024 at current US 10yr bond rates. That's over 700 billion they will have to raise through taxes or additional borrowing just to pay interest on what they already owe. You don't think that will have an affect on the economy or services government will be able to provide in future?
"Never trust a man without a single redeeming vice" WSC

Offline cybercoma

  • Full Member
  • ***
  • Posts: 2922
Re: Government Day-to-Day
« Reply #187 on: February 10, 2020, 12:35:43 pm »
If you think national economies work like household finances, then you really don't understand economics. It would take way too long to explain exactly why you're wrong, but consider that you don't change your household revenues with the stroke of a pen. It's an entirely different system.

However, as has been mentioned to you numerous times before, even in household finances, what's more important than your absolute debt is your ability to service your debt. If someone has millions of dollars tied up in assets, a $100,000 loan is nothing. When someone makes $25,000 per year, a $100,000 loan is massive.

When it comes to debt $1 is not the same as another $1.

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #188 on: February 10, 2020, 12:49:27 pm »
If you think national economies work like household finances, then you really don't understand economics. It would take way too long to explain exactly why you're wrong, but consider that you don't change your household revenues with the stroke of a pen. It's an entirely different system.

However, as has been mentioned to you numerous times before, even in household finances, what's more important than your absolute debt is your ability to service your debt. If someone has millions of dollars tied up in assets, a $100,000 loan is nothing. When someone makes $25,000 per year, a $100,000 loan is massive.

When it comes to debt $1 is not the same as another $1.

Canada's debt got out of hand in the late eighties and early nineties, the result was Canada's credit rating was going in the dumpster forcing Chretien and Martin into slash and burn fiscal policies. Transfers to provinces, including health care were significantly reduced, military spending was cut by 30%.

So are you seriously saying our country would be in a good position if it had to sell off its assets in order to manage its debt?

You can have a 5 million dollar home but if you have a million dollar mortgage and a $100K income, you won't be living in it for very long. You would have a tough time paying the taxes and maintenance on it even if you had no mortgage.
"Never trust a man without a single redeeming vice" WSC

Offline MH

  • Full Member
  • ***
  • Posts: 9017
Re: Government Day-to-Day
« Reply #189 on: February 10, 2020, 01:01:44 pm »
We aren't paying for infrastructure, we borrow to build it all we do is carry the interest, we aren't actually "paying" for anything.

It's the same as me buying a car on a personal line of credit and never doing more than paying interest on the balance. One day the car is worth nothing but I still owe the same amount of money for it.

Are you sure ?  Last time I checked it was a pretty close match between investment and the deficit.

Maybe Waldo can help us.

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #190 on: February 10, 2020, 01:08:50 pm »
Are you sure ?  Last time I checked it was a pretty close match between investment and the deficit.

Maybe Waldo can help us.

I'm not saying we shouldn't borrow to finance infrastructure, I'm saying pay off the debt, don't just pay the interest on it, passing the debt on to your grand children who will be stuck with replacing that infrastructure while carrying your debt as well. That is only an investment for you, it is a liability for future generations. Debt to GDP are just weasel words justifying never having to pay anything off.
"Never trust a man without a single redeeming vice" WSC

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #191 on: February 10, 2020, 01:14:56 pm »
Contrary to what some of you are maintaining, the only difference between personal debt government debt is we don't pass our personal debts down to our children and grand children.

On edit.

« Last Edit: February 10, 2020, 01:46:08 pm by wilber »
"Never trust a man without a single redeeming vice" WSC
Dumb Dumb x 1 View List

Offline waldo

  • Full Member
  • ***
  • Posts: 5014
Re: Government Day-to-Day
« Reply #192 on: February 10, 2020, 01:43:18 pm »
Contrary to what some of you are maintaining, the only difference between personal debt government debt is we don't pass our personal debts down to our children and grand children.

oh really!

Offline wilber

  • Moderator
  • Full Member
  • *****
  • Posts: 7476
Re: Government Day-to-Day
« Reply #193 on: February 10, 2020, 01:46:33 pm »
oh really!

Ya really.

Let me put it this way. Say you are 23 years old, just finished university and have your first job in the permanent work force, the government debt doesn't change by one penny from what it is today and interest rates remain the same. If you make it to 90 years old, over 1.7 trillion dollars in interest will have been paid on money that was borrowed before you were 23.
« Last Edit: February 10, 2020, 01:55:28 pm by wilber »
"Never trust a man without a single redeeming vice" WSC

Offline MH

  • Full Member
  • ***
  • Posts: 9017
Re: Government Day-to-Day
« Reply #194 on: February 10, 2020, 01:55:02 pm »
Why should I have to pay 100% of the costs of a bridge that will be around 50 years after I die ?

I'm ok with that stuff being paid off over time.