Canada’s national debt will peak at approx. $620 billion in 2014.
[Please click here to read National Debt Part 2]
Second, good news from my crystal ball.
If we’re able to start reversing the trend in 2015, as forecasted by Finance Canada, and start paying the debt down at the same steady rate as in an earlier 11 year period (from 1997 - 2007 we reduced the debt from $563 billion to $458 billion), it will take us 62 years, or until 2076, to pay off our national debt.
Unfortunately, paying down debt is an uncharacteristic habit of the Canadian government.
In the bar graph I’m referencing (compliments of Dept. of Finance and the London Free Press, Feb. 27) that indicates national debt from 1961 - 2014, there appears to be only one period we tackled the debt, i.e., the aforementioned 11 year stretch that ended 2 years ago.
It’s not that we don’t have the money. Corporate and household wealth has grown since 1961, but so have expenses (there's so much stuff to buy!) and our collective penchant for paying lower taxes.
In fact, for some government leaders, ‘lower taxes’ is their motto, because they hope that the economy will carry the day and our debt away, and they'll get elected for another term.
["Growing debt can act like an avalanche"]
Again, unfortunately, not only is paying down debt an uncharacteristic habit, but other things sometimes get in the way of progress.
Recessions rear their ugly heads on occasion.
Intense and costly weather-related problems occur, and are occurring more frequently as years go by, and damages must be paid for by someone.
There has been much written lately about how growing household debt is a major problem for the Canadian economy (our economy is driven by consumer spending, so spend, spend, spend), but little has been said about growing provincial and national debt and the major problems to be imposed one day on future generations.
Will they feel an even greater need to spend all they earn, and take on even more debt than today's families, to keep their country’s economy afloat?
Will there come a time when natural damages are so great that the country they live in cannot repair it or move on?
Will they feel smothered in debts as if under a silent, deadly avalanche?
Time will tell, but for now, we’re heading in the wrong direction and the snow pack is getting thicker.
In conclusion, I think we’ll be facing smaller lifestyles and smaller disposable incomes as we face growing pressure to pay down our growing household, provincial and federal debts.
***
Raise your hand if you think taxes should be off the table?
If taxes are off the table, what will have to happen instead?
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