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Originally Posted by Regorium
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.
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I'm not saying we are anywhere near Greek levels of debt. Far from it.
Merely using them as the example of what to expect with a run-away debt scenario that continues for a long period of time, since they are one of the more recent jurisdictions to have to deal with the fall out.
Ultimately, I think a prudent usage of debt, be it provincially, or at a corporate level, is a good thing. It can help maximize your returns if used correctly.
But when Alberta needs debt to cover off 25% of our operating expenses, that's a really big structural and systemic issue.
Prudent use of debt? Absolutely.
Borrowing to keep the lights on? Irresponsible.