Live Small: National debt is a silent, deadly avalanche Part 2

Let’s start with the good news:

“Uncharacteristically, 1996 was followed by 11 straight years of budgetary surpluses, and in that time period our country’s national debt was reduced by approx. 100 billion dollars, and in 2007 it sat at 458 billion.”

I don’t know how many times per week you can squeeze good news out of me, but I mentioned the above yesterday - so that’s once.

[Please click here to read National debt is a silent, deadly avalanche Part 1 for more context.]

However (you knew bad news was coming, right?), I finished yesterday’s post by saying, “to those who think those (11 straight years) were really great years and we made tremendous progress, and, as a country, we’ll be able to continue that path with ease, let me say two things.”

Well, here are the two things:


["We'll throw a party. Pop a few balloons"]

First, at that same rate of ‘tremendous progress,’ it would take until the late fall of the year 2056 (approx. 46.7 years from last Sunday) to reduce the rest of the debt, i.e., 458 billion as of 2007.

You might think that sounds great. We’ll throw a party. Pop a few balloons.

Me?

In 46.7 years, at 107 years old, I’ll likely be a little too tired to raise a glass of good cheer or eat a crumpet to celebrate.


["Dance, Gordie, dance!"]

Pop a balloon? Who will hold the pin? Me or one of my two sons, 86 and 84 years old at the time? We’d be lucky to even see a balloon.

Second, as many Canadians already know, our national debt is headed in the wrong direction again.

Why, last year alone saw us spent more beyond our means (a deficit of over $55 billion) than at any other time in human history, and that’s a long time, even in dog years.

Now, I’m not here to debate whether stimulus spending by the Conservatives was a good thing or not (time will tell), but the spending forecasted by Canada’s Department of Finance tells us we’ll pass the $600 billion barrier for the first time in 2012.

But not the last time. It will peak at approx. $620 billion in 2014.

And if we’re able to start reversing the trend, as forecasted by Finance Canada, at the same steady rate as in the earlier, uncharacteristic 11 year period, it will take us 62 years, or until 2076 (I’ll be 126, so popping a balloon will be out of the question), to pay off our national debt.


["Will we ever save $620 billion?']

Sixty-two years.

That’s a long time, and considering the recent recession, its impacts on global economies and a few other matters, i.e., I’d like to save up for a vacation, a few questions about our national debt spring to mind.

And isn’t that always the case?

***

Where will you be in 2076?

If alive, pop a balloon for me.

Please click here to read Part 3.

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