Debt gone by 2021!

[GoreBag]

All this clap about the debt in the US was oddly auspicious. During the Backroom's break, it was anncounced that Canada's conservative government has come up with a plan to terminte the debt by 2021, with tax cuts to follow. Huh.

[Lemur]

Color me jealous.

[Adrian II]

Color me jealous.

Is that all you have to say? I mean I am sure Brother GoreBag put this thread up specially for the Lemur.

Here's the deal, Canada. Go and develop your economy into the largest of the world, and I mean by far the largest, most unwieldy (from a policy point of view) and monstrously successful economy of the world. Build some rockets that take you to the moon and back. Win a couple of wars in the Balkans and the Middle East, get stuck in one of them for, say, three years.

Then come back and show us your funny little budget again.

Okay?

[lars573]

Colour me unconvinced. Tory pipe dreams, the lot. Debt reduction is all well and good but not at the expense of today. Does this "net debt" concept take into account the provincial debts?

[InsaneApache]

Is that all you have to say? I mean I am sure Brother GoreBag put this thread up specially for the Lemur.

Here's the deal, Canada. Go and develop your economy into the largest of the world, and I mean by far the largest, most unwieldy (from a policy point of view) and monstrously successful economy of the world. Build some rockets that take you to the moon and back. Win a couple of wars in the Balkans and the Middle East, get stuck in one of them for, say, three years.

Then come back and show us your funny little budget again.

Okay?

Harsh

[Adrian II]

Harsh

Okay, I'm just joking. I was hoping to entice the Lemur, but I should have included a piece of cheese for that.

[InsaneApache]

Brie or Gorgonzola?

..or perhaps .......

[Adrian II]

Brie or Gorgonzola?

..or perhaps .......

My God, the Cheese Shop. Is that from 1972 already?

Still, a nice instalment of dapper old Cleese.

MOUSEBENDER: Have you got any Limburger?

WENSLEYDALE: No.

MOUSEBENDER: No. No. That figures.

[Ice]

Is that all you have to say? I mean I am sure Brother GoreBag put this thread up specially for the Lemur.

Here's the deal, Canada. Go and develop your economy into the largest of the world, and I mean by far the largest, most unwieldy (from a policy point of view) and monstrously successful economy of the world. Build some rockets that take you to the moon and back. Win a couple of wars in the Balkans and the Middle East, get stuck in one of them for, say, three years.

Then come back and show us your funny little budget again.

Okay?

[Papewaio]

Drive by shooting.

What is this government debt you speak of?

Even the Chinese owe us money.

http://www.budget.gov.au/2005-06/ove...verview_07.htm

Friday, 21 April 2006

Well, it is another important day today, today is 'Debt Free Day', it is the day on which the Australian Government will eliminate its debt. We started off in 1996 with a debt of $96 billion, we have been servicing that debt, paying the interest costs and we have been repaying it and today we eliminate the last of the $96 billion debt of the Australian Government. And that will take the debt monkey off the back of Australian taxpayers. Our saving in interest alone is now about $8 billion a year and that means that we can free up that $8 billion for more important investments – health, education – and it also means that after we have attended to important spending we can work on reducing tax burdens.

[AntiochusIII]

Drive by shooting.

It would've been twice as funny had it not been for the fact that I'm already half-American and will bear the burden of America's legendary debts.

[Adrian II]

Drive by shooting.

Be our guest, Papewaio.

[Louis VI the Fat]

Here's the deal, Canada. Go and develop your economy into the largest of the world, and I mean by far the largest, most unwieldy (from a policy point of view) and monstrously successful economy of the world. Build some rockets that take you to the moon and back. Win a couple of wars in the Balkans and the Middle East, get stuck in one of them for, say, three years.

Then come back and show us your funny little budget again.

Rubbish Adrian. Neither the singular scale of the American economy nor it's unique position and challenges have created America's federal budget deficit.

It is fiscal irresponsibility that has created the largest, most unwieldy and monstruosly unsuccesful deficit of the world.

Clinton ended his presidency with a surplus. Bush's series of tax cuts and profligate spending have since transformed it into a record deficit. Both had to deal with the same unwieldy economy. Even when granted that a great deal of that difference is explained by the economical boom of the nineties and the high costs of Iraq, the main difference still is budgetary discipline.

[Vladimir]

Rubbish Adrian. Neither the singular scale of the American economy nor it's unique position and challenges have created America's federal budget deficit.

It is fiscal irresponsibility that has created the largest, most unwieldy and monstruosly unsuccesful deficit of the world.

Clinton ended his presidency with a surplus. Bush's series of tax cuts and profligate spending have since transformed it into a record deficit. Both had to deal with the same unwieldy economy. Even when granted that a great deal of that difference is explained by the economical boom of the nineties and the high costs of Iraq, the main difference still is budgetary discipline.

No sir you're mistaken. He's Dutch and was refering to the Dutch economy.

[Adrian II]

Rubbish Adrian. Neither the singular scale of the American economy nor it's unique position and challenges have created America's federal budget deficit.

It is fiscal irresponsibility that has created the largest, most unwieldy and monstruosly unsuccesful deficit of the world.

Clinton ended his presidency with a surplus. Bush's series of tax cuts and profligate spending have since transformed it into a record deficit. Both had to deal with the same unwieldy economy. Even when granted that a great deal of that difference is explained by the economical boom of the nineties and the high costs of Iraq, the main difference still is budgetary discipline.

Oh deficit schmeficit. Ever since WWII we have been hearing the same nonsense about the U.S. going broke the day after tomorrow because of their - Oooh! Aaah! - record deficit!

Precisely because the U.S. economy is such a monster, they can handle it. They have a status aparte in the international economic system. All the world will help them handle it, for fear of going broke themselves if the American economy breaks down. Haven't you heard about the Chinese sales of U.S. treasury bonds? They say it's a prime investment!

As for Clinton, he may have reduced the deficit, but during his Presidency the U.S. national debt rose from $4000 billion to $6000 billion. You do the math.

[Sigurd]

Good on you Canada...

We got rid of our debt in 1994...
That is until we realized that being debt free not always is a good thing. We borrowed some for show and tell but have more claims than debt. In addition we can redeem our debt if we chose to do so.

Now to the impressive stuff:
We have canceled our claims to the following debtors (in NoK):

Burma – 1.5 billion
Ecuador – 225 million
Egypt – 168 million
Jamaica – 19 million
Peru – 48 million
Sierra Leone – 60 million
Sudan – 772 million

[Husar]

Wait a second, a Norwegian posting in a debt thread???
We all know you have oil and are rich, your GDP per capita is the second highest right after Luxembourg IIRC.
Yes, this comes from a jealous German who wants some of your oil.

And I didn't figure out yet what's so good about debts, we have huge debts and no money for schools and stuff which would most likely better if we didn't have to pay interest because of those debts...

[Adrian II]

Now to the impressive stuff:
We have canceled our claims to the following debtors (in NoK):

Burma – 1.5 billion

Is that necessarily a good thing? The Burmese generals are always strapped for cash because they spend so much money on bolstering their oppressive regime. The less cash they have, the better it is for Burma, I would think. No?

[Sigurd]

Yes, this comes from a jealous German who wants some of your oil.

You get it ... every day. We just make sure we are paid around $60 a barrel.

And I didn't figure out yet what's so good about debts, we have huge debts and no money for schools and stuff which would most likely better if we didn't have to pay interest because of those debts...

I am not an economist and can not elaborate on why debt is good for a state that has 1, 5 trillion in a slush fund.
I guess liquidity is a factor. To always have enough cash when payments vary in size and you don’t always know how much is to be paid or when.
I guess loaning currency is better than buying is some cases.

Is that necessarily a good thing? The Burmese generals are always strapped for cash because they spend so much money on bolstering their oppressive regime. The less cash they have, the better it is for Burma, I would think. No?

When it comes to countries like Burma and Sudan they spend more paying off debts than what they spend on education and healthcare. Even though they have an oppressive regime, we can always hope they find good ways of spending their now reduced debt payments. They can’t say now that they have no money for the people because of large debts.

[Adrian II]

When it comes to countries like Burma and Sudan they spend more paying off debts than what they spend on education and healthcare.

Burma spends $2.84 billion a year on its army, which is 222% more than it spends on health and education combined.

Even though they have an oppressive regime, we can always hope they find good ways of spending their now reduced debt payments.

Oh, great. The U.S. has frozen Burmese government assets. Asian countries are threatening to expel Burma from ASEAN because of its horrible record on human rights, violation of international and bilateral treaties and government corruption. And then Norway gives them a $1,5 billion birthday present.

They can’t say now that they have no money for the people because of large debts.

Hardly. Burmese foreign debt stands at $6 billion.

[Sigurd]

We could always give them a new loan...

[Louis VI the Fat]

We have canceled our claims to the following debtors (in NoK):

Burma – 1.5 billion
Sierra Leone – 60 million
Sudan – 772 million

Ah, so that's how those piss-poor countries manage to pay for our arms supplies: at the end of the chain, there's a Norwegian taxpayer.

This is so much better, so much more elegant, than a Norwegian membership of the EU and having your taxmoney flow into our coffers through elaborate yet cumbersome devices like the CAP.

[Adrian II]

Ah, so that's how those piss-poor countries manage to pay for our arms supplies: at the end of the chain, there's a Norwegian taxpayer.

This is so much better, so much more elegant, than a Norwegian membership of the EU and having your taxmoney flow into our coffers through elaborate yet cumbersome devices like the CAP.

You French scoundrel, why don't you choke on your Dutch-subsidized Camembert.

Leave the Fourme D'Ambert alone though. Please?

[Louis VI the Fat]

Oh deficit schmeficit. Ever since WWII we have been hearing the same nonsense about the U.S. going broke the day after tomorrow because of their - Oooh! Aaah! - record deficit!

Precisely because the U.S. economy is such a monster, they can handle it. They have a status aparte in the international economic system. All the world will help them handle it, for fear of going broke themselves if the American economy breaks down. Haven't you heard about the Chinese sales of U.S. treasury bonds? They say it's a prime investment!

As for Clinton, he may have reduced the deficit, but during his Presidency the U.S. national debt rose from $4000 billion to $6000 billion. You do the math.

I was thinking - are we talking about the same thing here? There's the federal budget deficit - Dubya's legacy to future generations of Americans - and there's the US trade deficit.

If we're talking about the trade deficit I agree with what you've been saying in this thread. There's no point in comparing Canada's or Bolivia's trade deficit with that of the US, indeed because of the size and status aparte of the US in the international economic system.

To cite an apt quote from, I think it was, Keynes: 'If I owe you a thousand dollar, I've got a problem. If I owe you a million dollar, you've got a problem.'

[GoreBag]

This is about government debt. Canada's well in the black as far as trades go.

[Adrian II]

I thought we were talking about national debt, i.e. the amount of money owed by a national government. A useful measure of national debt is percentage of GDP.

U.S. national debt stood at 120% of GDP in the last year of WWII. Truman pushed it back to 90% of GDP. Ike lowered it to 50%, Kennedy to 40%. Johnson, Nixon and Carter kept it there. Reagan raised it to 65% again, Bush Sr and Clinton brought it down to 60%. Under Bush Jr it stands at 65% again.

Debt follows deficit. That is: national debt increases because of successive budget deficits, and it does not necessarily decrease in the wake of budget surpluses. Since budget deficits in U.S. history have always been war-related, national debt is more or less war-related as well.

Reagan seems to have been an exception, but he considered the Cold War as if it were a hot one and began a policy of outspending (out-arming) the Soviet Union. Bush Jr's deficits are clearly war-related as well.

This is the simple version. I am sure there is a much more complete and complex version, but I have other plans for Christmas.

[Louis VI the Fat]

So we are talking about the same thing after all. I do remember us disagreeing over it but I can't quite remember about what exactly. And as it is getting rather late, I'm not going to bother trying to figure it out.

This is the simple version. I am sure there is a much more complete and complex version, but I have other plans for Christmas.

While I don't have a more complex version I do have a complete one!

Numbers and stuff. Relevant information on page 130-131.

I'm going to stare at this report all the way 'till Christmas to satisfy my need for numbers, stats and percentages.



While simultaneously satisfying my need for foreign-subsidized cheese and wine. And when I'm done the national reserve of Fourme D'Ambert will be down from 80% to an historical all-time low of 45%. The national reserve of the finest white mellow(?) (= 'moelleux') Sauternes from Château Yquem will get completely depleted in the process.

[Adrian II]

I'm going to stare at this report all the way 'till Christmas to satisfy my need for numbers, stats and percentages.

Oh yeah! Throw in current accounts, trade and services balance, balance of payments, gold and currency reserves and comparative interest rates, and you'll have enough to chew on till Christmas next year!

Better chew on the Fourme D'Ambert while those Dutch subsidies last, mon pote.

That White House budget link you provided gives a nice rundown (page 5 and beyond) of recent developments. It shows that U.S. debt and budget trends, if measured as a percentage of GDP, are no reason for great panic.

After peaking at $290 billion in 1992, deficits declined each year, dropping to a level of $22 billion in 1997. In 1998, the Nation recorded its first budget surplus ($69.3 billion) since 1969. As a percent of GDP, the budget bottom line went from a deficit of 4.7% in 1992 to a surplus of 0.8% in 1998, increasing to a 2.4% surplus in 2000.
An economic slowdown began in 2001 and was exacerbated by the terrorists attacks of September 11, 2001. The deterioration in the performance of the economy together with income tax relief provided to help offset the economic slowdown and additional spending in response to the terrorist attacks produced a drop in the surplus to $128.2 billion (1.3% of GDP) and a return to deficits ($157.8 billion, 1.5% of GDP) in 2002. These factors also contributed to the increase in the deficit in the following two years to $413 billion and 3.6% of GDP in 2004, falling to $318 billion and 2.6% of GDP in 2005. Debt held by the public, which peaked at 49.4% of GDP in 1993, fell to 33.0% in 2001 and increased to 37.4% in 2005.