Quote:
Originally Posted by mrkajz44
While the $30B deficit number is a bit of a surprise to me, I'm not that concerned overall. Personally, I think the Debt to GDP ratio is much more important than just a deficit / surplus number. Here is a Debt to GDP ratio chart for Canada:
We've come a long way from the mid-90s and even with these deficit numbers projected, we are actually still looking to be in good shape going forward. Couple that with the fact that GDP growth was very conservative in the budget and could actually grow much more than anticipated, I'd say the deficit is not as bad as everyone thinks.
I think people have to remember that a government budget is very different that a personal budget. If I am personally spending more than I earn, I'm doing something wrong. But a government can effectively run deficit budgets and have it be a good thing. Government earnings will continue to increase over time, while personal earnings plateau and then drop off. That's a key fact that is often overlooked.
If Canada's economy continues to grow, then it doesn't seem unreasonable to have debt grow at a similar rate as well, especially when times are tougher. It's sort of like a corporation. Notice that some of the biggest company's have large amounts of debt on their balance sheets. As the company gets bigger, their debt loads tend to grow as well. The banks are fine loaning the money so long as debt ratios are met, similar to debt vs GDP ratio for the government. |
Why did you post a chart that uses real data until 2010 and then projections from 2010-2015? Is it really old?
Also, there is a lot of apples to oranges going on with the debt ratios that have been posted in the last page or so (not pointing this at you). This looks like net federal debt to GDP, then there was a chart of the US total public debt to GDP as a comparison. The US one may include state debt while the one you posted looks like it's only federal. There are a lot of different metrics to look at when comparing countries public debt loads, and it's important to make sure that it's apples to apples. The last I checked total public debt in Canada was around 90% of GDP while total public debt in the US was around 75%.
Canada (including the provinces) is currently very indebted.