Quote:
Originally Posted by IliketoPuck
I agree that government debt is not the same as consumer or business debt. That is reflected inherently in the credit rating governments receive. So while governments can incur, and continue to incur substantial amounts of debt on a year over year basis, the long term ramifications can be far more severe.
As we saw in Europe with the Greeks, and other countries, once that debt level reaches a critical mass, suddenly it becomes a monumental, existential, crisis. Far beyond simply a single company declaring bankruptcy. Suddenly, our entire social system is jeopardized, our savings are at risk, and heaven forbid we are forced to default on our debt.....
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Totally agree with all your points. The illustration of a closed system is to show that government debt has more benefits than just "paying interest to the banks, and an equivalent amount could've been spent on healthcare." There's definitely leakages in that model, just like there are issues with a zero debt model (check our property tax bills!).
I think your characterization that Notley's 4 years have put us into a Greece like situation where we have a monumental existential debt, or that we are anywhere near default is a bit hyperbolic. Our balance sheet is one of the best in North America even with Notley's 4 years. If we're defaulting on our debt, that means the entire continent is already defaulted and there'd be much bigger things to worry about.