Canada – Federal Government Total “Market Debt” Now Tops $1 Trillion (with a T)…Yes $1 TRILLION

and interest rates are going up! Is there a single Canadian province that has a balanced budget?

This is what our high salaried residents of City Hall just don’t understand.  Any money that comes from Queens Park or Ottawa is borrowed money.  That money is taxes paid by people who are not yet old enough to work or people that have not yet been born.

The overspending has to stop.  We cannot continue to live beyond our means. All levels of governments have to stop trying to be everything to everyone. We just cannot afford it.

previous related  posts here and here

What does $1 Trillion look like?

Federal government’s total ‘market debt’ now tops $1 trillion, documents show

Former budget officer warns federal books at risk of fiscal shock in the face of rising interest rates

The federal government’s market debt — the debt on which Ottawa pays interest — has topped $1 trillion for the first time, Department of Finance documents show.

It is a milestone, says former parliamentary budget officer Kevin Page.

The threshold, he said, highlights the urgent need for the Liberal government to have a strategy to both balance the federal books and manage the debt in an era of rising interest rates.

“It’s important for Parliament to wrap its head around borrowing,” Page told CBC News.

Market debt is different from the federal debt and deficit figures, which are regularly presented to and debated by Canadians and reflect the federal government’s estimated total liabilities, or cash needs, and what must be borrowed from the markets.

Think of market debt as something like a mortgage — or the balance on a line of credit.

“It’s debt that generates interest,” Page said. “And Canadians will be surprised at how fast interest on the public debt is going to grow over the next five years.”

The market debt figure for 2017-18 does not reflect the cash, land or other assets the federal government has on hand.

“When I think of of my Ukrainian mother in Thunder Bay, [Ont.], she understands debt is going up,” he said. “Most Canadians understand that. And it’s going up by a lot.”

Passing the $1 trillion threshold

Buried in the recent federal budget is a passing reference to both the market debt and the limits of the federal government’s ability to borrow.

Officials at Finance say the country’s total “debt stock” will be $1.029 trillion when the fiscal year ends on Saturday.

It will go even higher in the coming fiscal year.

Finance Minister Bill Morneau’s recent fiscal plan noted that “outstanding government and Crown corporation market debt is projected to reach $1,066 billion ($1.066 trillion) in 2018-19.”

The estimate includes $755 billion in “projected year-end government market debt and an anticipated Crown corporation debt stock of approximately $311 billion.”

Page said crossing the $1 trillion threshold is extraordinarily important.

“We’re a $2-trillion economy. So, to have at the federal level more than a trillion dollars of liabilities, most of which is market debt, it’s significant,” he said. – CBC

read full article here

Print Friendly, PDF & Email

One Response

  1. James Clayton
    James Clayton at | | Reply

    As you point out, any money that comes from Queens Park or Ottawa is borrowed money. And taxpayers in Canada collectively spend billions of dollars each year on interest payments for all levels of government debt.
    But we have to keep in mind that every dollar is “borrowed” into existence as interest-bearing debt.
    Politicians speak as if money is still something tangible that can be physically deposited or borrowed, but money in the present system is basically credit; it is generated with a few clicks of a keyboard by making digital accounting entries. Legal tender notes and coins are merely tokens of credit.
    The financial institutions basically create money by extending our collective credit to us—but all of this money is created as interest-bearing debt. That’s where the real problem begins. Total aggregate debt, including principal and interest, is always more than the entire amount of money in existence.
    Governments and banks depend on each other. The banks simply allocate some of our collective credit to government; this creates more money for politicians to spend. Governments have the option of letting their debts grow without any fear that the banks will step in and shut them down. The banks can keep providing additional money—as long as we keep paying the interest.
    Taxpayers, consumers and businesses in Canada are collectively spending billions each year in interest payments.
    To make matters worse, inflation is like a hidden tax that erodes the purchasing power of every dollar.
    The monetary system is an instrument of control that is designed to confiscate and concentrate wealth. This restricts legitimate economic activity, drives unsustainable economic growth, contributes to involuntary unemployment, and keeps us in a collective state of perpetual debt.
    Money nowadays is credit. We can take control of our credit to facilitate the exchange of our goods and services.
    I highly recommend ‘The End of Money and the Future of Civilization’ by Thomas Greco. He describes the problems with the monetary system and suggests some possible solutions, including mutual credit clearing. Chapter 19 even outlines the role that governments could play in establishing economic and financial stability.

    James Clayton

Leave a Reply

enter code *

This site uses Akismet to reduce spam. Learn how your comment data is processed.