Ottawa posts $14.2B surplus

[jolinar of malkshor]

Originally Posted by Canada 02

totally agree! by cutting taxes, they can foster saving or spending by Canadians, both would have beneficial effects. Likewise tax cuts for businesses could lead to more capital spending and hiring workers. The later may not be that important, in general, since unemployment is low, but that is not sector wide, nor region wide. The manufacturing sector could certainly use some help right now, given the high dollar. Tax cuts could lead to using more efficient, more productive technologies; likewise, it could stem the tide of layoffs in that sector. Conceivably, lowering taxes could lead to a larger tax base and actually increase government revenue. Harper and the boys need to find the right balance here

I think most people are saying lets have a tax cut of some kind but to suggest that we are being over taxed is wrong. My parents put us into this situation and until the debt is paid there is no overtaxation IMO.

[Lurch]

Originally Posted by peter12

Canadians are being overtaxed by $14.2 billion. Let's see some tax cuts.

Depends on if you believe we should be paying off the debt right down to 0. Paying $14.2b on the principal equates to about a 20 year loan on the rest of the debt. However, it will get harder and harder to maintain a 20 year pace with rhetoric like the above - the last year on a 20 year pace requires about a $40b surplus. Next year requires nearly $15b to stay on pace. In case this doesn't make a lot of sense, note that the math works like a mortgage where you pay off a lot more principle towards the end and in this case principle equates to government surplus towards debt reduction.

[Azure]

http://www.theglobeandmail.com/servl.../National/home

TORONTO — The Harper government announced it ran a larger-than-expected budget surplus of nearly $14-billion last fiscal year and immediately pledged to return $725-million of this to voters as tax breaks.

The rebate, offered up as election speculation rises, would amount to $30 to $40 for each taxpayer if doled out broadly.

[CaptainCrunch]

See above, screw the rest of you, we need to have a 30 million person battle royal to decide one winner who gets the $725 million, we sell it on ppv world wide for about $500 dollars each and pay off the debt in one big cash payment.

[JiriHrdina]

A quote from last year.

Finance Minister Jim Flaherty said, "We're going to budget much closer to the line...No more so-called surprise surpluses at the end of the fiscal year."

So much for that.

Government surpluses are always positioned as a 'good news story' and while paying off the debt isn't a bad thing, being overtaxed is.

[4X4]

Re: the user fee comment above...

I disagree. A user fee will (probably) only discourage people who can't afford it. And I'm just thinking about whether a single mom might try to google "gash on skull" rather than take kid to hospital. It's already bad enough that an ambulance ride costs a few hundred dollars.

IMO, simple user fees only alleviate the health system because poor people stop showing up.

[Hack&Lube]

Canadian Public Debt: $467.3 Billion

American Public Debt: $4.9 Trillion
Total American Public Debt: (Including intra-governmental debt, social security, Medicare) $59.1 TRILLION

[jolinar of malkshor]

Originally Posted by Hack&Lube

Canadian Public Debt: $467.3 Billion

American Public Debt: $4.9 Trillion
Total American Public Debt: (Including intra-governmental debt, social security, Medicare) $59.1 TRILLION

Canada's population 33 million
USA population 300 million

[peter12]

Originally Posted by MarchHare

We're not being overtaxed so long as we still have a large accumulated debt that needs to be repaid. Once the federal government is debt-free in a few decades, then we can start talking about tax cuts.

[Edit]
Beaten!

Haha, I'm not talking about $14.2 billion in tax cuts. However, incremental tax cuts would indirectly increase economic production.

[peter12]

Originally Posted by 4X4

Re: the user fee comment above...

I disagree. A user fee will (probably) only discourage people who can't afford it. And I'm just thinking about whether a single mom might try to google "gash on skull" rather than take kid to hospital. It's already bad enough that an ambulance ride costs a few hundred dollars.

IMO, simple user fees only alleviate the health system because poor people stop showing up.

Well, there are alot of things you can do to avoid this. You can do something along the lines of what Singapore has done and give people a flat pay-out per year that is to be used to pay hospital user fees.

If you wanted, you could even waive the user fee for people under a certain income.

[Phaneuf3]

Originally Posted by jolinar of malkshor

Canada's population 33 million
USA population 300 million

what everyone seems to forget when comparing canada to the us.

A+ post. will read again.

[octothorp]

Originally Posted by Hack&Lube

Canadian Public Debt: $467.3 Billion

American Public Debt: $4.9 Trillion
Total American Public Debt: (Including intra-governmental debt, social security, Medicare) $59.1 TRILLION

So what's the deal with the US and their trillions of dollars of debt... Is this something that is likely to come back and bite them at some point, or can they simply continue to spend without regard for this figure? I think I read something about China trying to buy up US debts from other countries in order to attempt to become a greater US creditor, but I don't really understand the logistics in doing so.

[skins]

Originally Posted by peter12

Canadians are being overtaxed by $14.2 billion. Let's see some tax cuts.

The Canadian government pays something like $30 billion in interest payments every year. That's money that is lining the pockets of banks (some foreign) that could be spent elsewhere or provided in tax relief.

No tax cuts until the debt is at least mostly paid off.

[Hack&Lube]

Originally Posted by octothorp

So what's the deal with the US and their trillions of dollars of debt... Is this something that is likely to come back and bite them at some point, or can they simply continue to spend without regard for this figure? I think I read something about China trying to buy up US debts from other countries in order to attempt to become a greater US creditor, but I don't really understand the logistics in doing so.

The US strategy is that "debt is a good thing" and that whenever they run out of money every year, they just buy more debt. They can foreseeably keep this up in a healthy economy by growing their GDP and thus, virtually making debt smaller by making it a smaller portion of GDP.

The way this works is that if you can stimulate growth and investment though debt-financing, just keep borrowing if you can manage to grow faster so that what you borrow becomes less signifigant. Of course, the US debt is like 67% of GDP but that tell that to Japan who's debt is like 175% of GDP.

The problem though is that if the U.S. economy finally tanks and does it hard, they are totally screwed.

[mykalberta]

I would like to see where the projections went wrong. Admittedly 5 billion over projected on that kind of budget isnt a large % but the Cons did make a big deal about proper forecasting.

MYK

[mykalberta]

Originally Posted by skins

The Canadian government pays something like $30 billion in interest payments every year. That's money that is lining the pockets of banks (some foreign) that could be spent elsewhere or provided in tax relief.

No tax cuts until the debt is at least mostly paid off.

I think they should increase the minimum exemption and that is it for taxes. It hits everyone fairly and the poor buggers get a bigger % cut.

Put the rest to debt and covert op financing.

MYK

[IntenseFan]

Originally Posted by jolinar of malkshor

Canada's population 33 million
USA population 300 million

So Americans per capita share of their public debt (of about $5 trillion - not the 59.1 trillion) is around $16,000 per person.

Canadians per capita share of their public debt (of about $467 billion) is about $14,000 per person.

It still seems like a big difference, but economically speaking, I'm not sure that it is.

[jolinar of malkshor]

Originally Posted by IntenseFan

So Americans per capita share of their public debt (of about $5 trillion - not the 59.1 trillion) is around $16,000 per person.

Canadians per capita share of their public debt (of about $467 billion) is about $14,000 per person.

It still seems like a big difference, but economically speaking, I'm not sure that it is.

My point exactly.

[CaptainCrunch]

Originally Posted by IntenseFan

So Americans per capita share of their public debt (of about $5 trillion - not the 59.1 trillion) is around $16,000 per person.

Canadians per capita share of their public debt (of about $467 billion) is about $14,000 per person.

It still seems like a big difference, but economically speaking, I'm not sure that it is.

I have to ask if a per capita calculation is truly accurate in the case of a national debt, as opposed to a per person calculation based around contribution to the economy.

In other words a calculation that removes the elderly, the too young to work or those that are unable to work would give a clearer picture of debt repayment.

Also right now the U.S. debt ratio is increasing while theoretically the Canadian debt ratio should be decreasing which could be another economic indicator.



I'm just to lazy to look up the required data.

[IntenseFan]

Originally Posted by CaptainCrunch

I have to ask if a per capita calculation is truly accurate in the case of a national debt, as opposed to a per person calculation based around contribution to the economy.

Oh, I don't think my simple population to debt calaculation is economically meaningful in the least. There are all sorts of ratios and formulas going into these types of measures that I couldn't begin to understand unless I was an economist.

The reason I did a quick calculation of the per capita / per person share is because that is what that debt clock in Vancouver was doing. It took the total debt, divided it by the population and stated "your share". I always found that to be interesting.

As I recall, when the debt clock started, it was around $20k per person, on the basis of that calculation. It has shrunk significantly (no doubt due to factors such as debt reduction, population increase and perhaps even currency valuation).