I learned in one of my macroeconomic courses that debt actually doesn't matter unless it is held by foreigners. If canadians hold the debt then interest payments aren't a problem because they stay within the Canadian economy. The more important number than the total debt, is the amount that is held by foreign sources. In that case all interest payments are money leaving the Canadian economy. So debt may effect the government, but it doesn't really effect the economy.
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Originally Posted by simmer2
Does Mr. Layton not understand simple economics? If we continue injecting money into social programs with a surplus, then what happens when we don't have a surplus? Those programs people have now relied on get removed and that government gets pissed on. |