Quote:
Originally Posted by Slava
^ Really a lot of this is just pure right-wing fear mongering though. Governments can have debts, and frankly budgeting for the government is not anywhere near the same as budgeting for a household. I'm really tired of that line of though; its wrong and there are marked differences:
1. The government can not only go into debt, but here's an enormous difference for you; if they choose the government might literally never pay the debt back. There's honestly not a huge issue with that. We all expect (regardless of political spectrum) that the province will be here in 100 years, right? They aren't facing the deadlines of a normal household and likewise the constraints regarding debt repayment aren't there either.
...
Long story short, the reason that the governments budget the way they do is because they can.
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I'm not trying to fear monger Slava. In fact I agree with much of the above. If the government chooses to fund its debt by making interest payments for a hundred years or even to practically the end of time, they can indeed do that. It
is very different than a household.
I have little problem if 10-15 cents on every tax dollar collected every year were used in such a manner (ideally less of course).
Where it becomes a problem is when a larger and larger portion of the budget is used to fund prior borrowings. Yes the government can take practically forever to pay it all back. But the more they borrow the more they have to pay in interest and when that starts to be at a level of 20 or 30 cents for every tax dollar that gets to be a huge problem.
Fighting any social problem by borrowing more and more every year, including the infrastructure deficit, or even other domestic issues like healthcare costs, will eventually lead us there.
Again, I have to reiterate that sometimes deficit financing is appropriate. But not to my mind during growth years and not so much that we can't recover from it short term.