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David





Joined: 06 Sep 2008
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PostPosted: Fri Apr 29, 2011 5:56 am    Post subject: Canadians & their Gov'ts: Digging the hole deeper & Reply with quote

Canadians and their Governments: Digging the hole deeper and deeper

There's a lot of discussion in the mainstream news media in Canada about the massive total debt the United States has, but so far I have not seen any discussion of the massive total debt we in Canada have, a massive total debt which is skyrocketing higher at a very alarming rate as we speak. The politicians and the mainstream news media absolutely refuse to want to talk about this issue.

The total Government (Federal, State, and Local), business, and household debt in the USA is 52.6 trillion$

http://www.federalreserve.gov/.....ble/l1.htm

http://research.stlouisfed.org.....[id]=TCMDO

The total household credit in Canada as of March 2011 was 1515 billion$ (1.515 trillion$). Over the last 12 month period it went up by 92.2 billion$.

http://credit.bank-banque-cana.....holdcredit

The total business credit in Canada as of March 2011 was 1259 billion$ (1.259 trillion$). Over the last 12 month period it went up by 57 billion$.

http://credit.bank-banque-canada.ca/businesscredit

At the end of the 4th quarter of 2010 the total government (federal, provincial, and municipal) gross debt in Canada was 1742 billion$ (1.742 trillion$). In the the year 2010) total government (federal, provincial, and municipal) gross debt went up by 99 billion$.

(3rd line down in the following link from Statistics Canada)

http://www.statcan.gc.ca/daily.....a4-eng.htm

Adding it all up, at the present time the total (government, business, and household) debt in Canada is 4516 billion$ (4.516 trillion$), and over the last 12 months it has gone up by 248.2 billion$, (roughly speaking because the household and business credit numbers are from March 2010 to March 2011 while the total government debt number is for the calendar year 2010).

Since the United States`s population and gdp is approximately 10 times higher than Canada`s, there is not a lot of difference in the total debt numbers in the USA (52.6 trillion$) and the total debt numbers in Canada (4.51 trillion$), relatively speaking.

To put the increase in the total debt in Canada of 248.2 billion$ over the last year into perspective, according to the Canada 2010 Budget (document) - (Page 160 of the Adobe Reader document, page 175 of the actual budget document), program expenses by the Federal Government for the year 2010 were expected to be 249.2 billion$. The increase in the total debt in Canada over the last year matches almost exactly what the Federal Government expects to spend on programs in the year 2010.

On page 31 of the Adobe Reader document (page 33 of the actual budget document) of the Canada 2010 Budget it says as of the March 2010 budget the nominal gdp in Canada for the year 2010 was expected to be 1601 billion$ (1.601 trillion$)

On page 31 of the Adobe Reader document (page 33 of the actual budget document) of this same budget document it says as of the March 2010 budget the nominal gdp in Canada for the year 2010 was expected to grow by 4.9%.

Using the above figures that were given in the March 2010 Budget document if you multiply the 1601 billion$ gdp by 4.9% you get 78.4 billion$. For the year 2010 the nominal gdp grew by 78.4 billion$ in Canada, while the total debt grew by 248.2 billion$. In other words over the last year the total debt in Canada grew 3.16 times faster than its gdp (economy) did.

The total debt right now is 4.516 trillion$ and the nominal gdp is 1.601 trillion. The total debt to gdp is 282%

To get to the Canada 2010 Budget (document) which I have referred to in the last 11 lines of this email, click on the following link. When the web page appears click on the "pdf version" link which is on the middle part of the home page. Then go to page 31 of the Adobe Reader document (page 33 of the actual budget document) and Page 160 of the Adobe Reader document (page 175 of the actual budget document) to get to the statistics I have quoted above.

http://www.budget.gc.ca/2010/home-accueil-eng.html

*** UPDATE. Please note the March 2011 Budget document (which was tabled in the House of Commons on March 22, 2011, but was NOT ADOPTED prior to the dissolution of Parliament on March 26, 2011) made adjustments to the nominal gdp, the rate of growth of the nominal gdp, and the program expenses for the year 2010. It states the nominal gdp for the year 2010 was 1622 billion$ (versus the expected 1601 billion$ stated in the 2010 Budget), the rate of growth of the nominal gdp in 2010 was 6.2% (versus the expected 4.9% stated in the 2010 Budget), and the program expenditures for the year 2010 were 245.2 billion$ (versus the expected 249.2 billion$ stated in the 2010 Budget).

The following is the link to the (March) 2011 Canada Budget document. (Click on the "pdf version" link) (Go to Adobe Reader document pages 33 and 185 to get the statistics I have quoted in the previous paragraph)

http://www.budget.gc.ca/2011/home-accueil-eng.html

Using the updated figures in the 2011 Budget then:

- Over the last year the total (government, business, and household) debt in Canada went up by (approximately) 248.2 billion$. To put this increase in the total debt in perspective, the Federal Government in 2010 spent 245.2 billion$ on program expenditures.

- Canada's total (government, business, and household) debt is 4516 billion$. The nominal gdp is 1622 billion%. The total debt to nominal gdp is 278%.

- If you multiply the 1622 nominal gdp by 6.2% you get 100.5 billion$. In the year 2010 the nominal gdp grew by 100.5 billion$, and the total (government, business, and household) debt grew by (approximately) 248.2 billion$. In the year 2010 the total (government, business, and household) debt in Canada grew 2.46 times faster than its nominal gdp (economy) did.

To add insult to injury another huge challenge facing us is the demographic time bomb which is coming at us. (The graying of Canada). The leading edge of our massive baby boom generation turned 65 years old last January. This means there are going to be more and more people riding in the cart and fewer and fewer people pulling the cart (in this country) over the next several decades.

The following is the link to a graph on the Statistics Canada web site (last modified in 2008) of the number of persons aged 15 to 64 years for each person aged 65 years and over in Canada, 1956 to 2056. This one graph is an eye opener and it really says it all.

http://www.statcan.gc.ca/pub/9.....72-eng.htm

The following is the link to a recent news story on the topic of the demographic time bomb which is coming at us:

http://www.cbc.ca/fp/story/2011/04/02/4544389.html

The following is taken from a recent article by The Canadian Institute for Health Information (CIHI) on the topic of health care funding and aging.

"In 2007, the latest available year for data broken down by age group, health care spending by provincial and territorial governments was highest for seniors age 65 and older ($10,318 average per person) and infants younger than 1 ($8,239). In contrast, health care spending on Canadians between age 1 and 64 averaged $1,966 per person, up from $1,832 in the previous year.
There were great variations among seniors: for those age 65 to 69, the average per capita spending was $5,589. For those age 80 and older, per person spending reached more than three times that amount ($17,469)."

http://www.cihi.ca/CIHI-ext-po.....se_19nov09

It looks to me like the folks who look after the Canada Pension Plan are about to change the way they calculate its unfunded liability. The following is taken from the 25th Actuarial Report on the Canada Pension Plan (which was tabled before Parliament on Nov. 15, 2010.)

"If the Plan’s sustainability is to be measured based on its unfunded liability, it should be done on an open group basis. The Plan is intended to be long-term and enduring in nature, a fact that is reinforced by the federal, provincial and territorial governments’ stewardship through the established strong governance and accountability framework of the Plan. Thus, an open group valuation that emphasizes the long-term nature of the Plan could be deemed to be the most appropriate."

Under the old method of calculating the unfunded liability (the closed group method) it was 748 Billion$ on Dec. 31, 2009.
Under the above mentioned (new and improved?) open group method of calculating the unfunded liability of the CPP, it was only 6.9 Billion$ on Dec. 31, 2009.

I am highly skeptical of any possible plan to change the way the unfunded liabilitiy of the CPP is calculated. If this indeed does happen I would consider this to be yet another example of our "ponzi scheme economy" punting one of its problems off into the future (for them to deal with), so we do not have to deal with it now.

The following is the link to the 25th Actuarial Report on the CPP. The topic of the unfunded liability and the closed and open group methods of calculating it is discussed on pages 69 - 72 if anyone is interested in reading about this.

http://www.osfi-bsif.gc.ca/osf.....tailID=499

While not directly under the jurisdiction of the Federal Government (however there is only one taxpayer), we in Canada also have a very serious problem of an aging infrastrucutre, (yet another issue which has been put on the "back burner")

The following is the link to a recent news article titled "Canada’s crumbling infrastructure: the silence is deafening".

http://www.theglobeandmail.com.....le1979065/

The following is the link to a recent news article titled "Federal funds for cities set to expire, municipalities ask: What’s the plan?"

http://www.thestar.com/news/ar.....-plan?bn=1

The future history books are not going to be kind to the elected politicians, the Bank of Canada, and the financial regulators who have been at the helm of the good ship Canada for the last 40 years or so for allowing the build up in this country of so much debt and unfunded liabilities (in Medicare, Old Age Security, Guaranteed Income Supplement, the Allowance, public sector pension plans, etc). The numbers I have quoted above and the links I have provided to back them up speak for themselves. We are in debt up to our eyeballs and we are increasing these already staggering debt levels at a very alarming rate. These debt levels in Canada are clearly not sustainable. We are heading for a historical economic crash.

The Canadian people (generally speaking) have to accept a fair portion of the responsibility for the present "state of the nation" because they have been distracted by, and feasting upon, all of the "cheap money" which has been made available to them by our fiat monetary system over the last 40 years, and buying the big homes, the toys, and the gadgets on credit, and not stopping to ask themselves if our "high on the hog" standard of living and the "good times" we were all having were sustainable over the long term. The term "chicken today and feathers tomorrow" comes to mind.

Our whole system is one big ponzi scheme. And we actually have the nerve to put people like Bernie Madoff in jail for running ponzi schemes in our societies.

Are we all living in an episode of the Twilight Zone?
Bugs





Joined: 16 Dec 2009
Posts: 2980
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votes: 7

PostPosted: Sat Apr 30, 2011 9:04 pm    Post subject: Reply with quote

This has to be one of the most brilliant posts I have seen on this, or any other Canadians site.

I don't have the sophistication to respond adequately, except to recognize all the good work you have done in locating this information. However, I know enough that I have seen estimates that the total US Government debt, at all levels, including unfunded liabilities is even higher than $52,600,000,000,000. (That's $52.6 trillion.)

It illustrates the bankruptcy that we face, as a national society. The thing is -- it isn't just Canada, and Canada isn't even the worst offender. The whole of the West is in pretty much the same shape. Put better, if all this credit starts to cascade down, in a deflationary spiral, it will engulf the whole of the global economy.

The consequences would be a disaster beyond my ability to comprehend.

Why don't we know about it? As it is, the politicians of every country walk on eggshells, yet never breathe a word about the depression and social exhaustion we are looking at, dead in the eye. The academics are at least as bad.

Meanwhile, we have an election that may be decided on the sexual habits of Jack Layton, or the personality flaws (real of imagined) of Stephen Harper and Michael Ignatieff.
PeterB





Joined: 25 Mar 2007
Posts: 63
Reputation: 61.8

PostPosted: Sun May 01, 2011 11:32 am    Post subject: Velvet Touch – A Community Clinic – Who Knew??? Reply with quote

Olivia Chow was quick to release a written statement, that husband Jack Layton indeed did attend a "registered massage clinic" and she was well aware of it and he "needed a massage" late in the evening.
Jack Layton, later at a rally in Burnaby, was quick to point out and clarify Olivia's comment, that in fact it was a "community clinic" (Velvet Touch) where he obtained his services. In trying to protect his political career, and in tune with the NDP philosophy, he felt it very important to stress it was a "community clinic" not to be confused with a private clinic. It was essential in the middle of this election, to inform Canadians, in order to solicit their support, he wouldn't be caught dead at a private clinic, where illegal, underage, Asian sex workers, would be employed by rip off artists, in the Canadian health care field - it would have to be a community clinic he patronizes - there should be no confusion. A good leader leads by example.
I wonder if Canadians becoming more aware of the fine details of the NDP health care platform and of Layton's expansion of health care services to include these "community clinics", help explain the surge in support for the NDP in this current election. Does anybody in the main street media have a better explanation for the NDP surge and why are they reluctant to discuss this NDP expansion of Canada's health services?
Why and how could the Toronto city police confuse a community clinic with a bawdy house?
DFP





Joined: 15 Dec 2009
Posts: 313
Reputation: -37.2
votes: 7

PostPosted: Sun May 01, 2011 9:13 pm    Post subject: Reply with quote

Bugs wrote:
This has to be one of the most brilliant posts I have seen on this, or any other Canadians site.

I don't have the sophistication to respond adequately, except to recognize all the good work you have done in locating this information. However, I know enough that I have seen estimates that the total US Government debt, at all levels, including unfunded liabilities is even higher than $52,600,000,000,000. (That's $52.6 trillion.)

It illustrates the bankruptcy that we face, as a national society. The thing is -- it isn't just Canada, and Canada isn't even the worst offender. The whole of the West is in pretty much the same shape. Put better, if all this credit starts to cascade down, in a deflationary spiral, it will engulf the whole of the global economy.

The consequences would be a disaster beyond my ability to comprehend.

Why don't we know about it? As it is, the politicians of every country walk on eggshells, yet never breathe a word about the depression and social exhaustion we are looking at, dead in the eye. The academics are at least as bad.

Meanwhile, we have an election that may be decided on the sexual habits of Jack Layton, or the personality flaws (real of imagined) of Stephen Harper and Michael Ignatieff.


I completely agree, our system is deeply flawed.

The interconnection of markets is not geared towards sustainable systems but of a hodge podge of interested investments looking to earn a quick buck, there's very little long-term consideration in capital investments. The only way the system is kept viable is by manufacturing consumption (how many hundreds of billions are spend on ad-marketing?)

Current shortfall in our pension system is 500$ billion because people aren't making their annual allowable contributions.

Our system isn't fully diversified, a hike in manufacturing of clothing in the east will reverberate in the west. Guaranteed hikes in the cost of food including the investments related to producing food, shipping food, and to the heightened volatility of even stable demand will have a horrific affect on our society. We do not produce enough food to sustain our population not even on the best of years.

All I want out of the government, federal, provincial or local is an attempt to address the deficiencies in the system. I have yet to meet or be aware of candidates that seek to address these issues; they are always self-seeking myopics who simply seek re-election.
Bugs





Joined: 16 Dec 2009
Posts: 2980
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PostPosted: Sun May 01, 2011 10:13 pm    Post subject: Reply with quote

I don't know if DFPs post is a response to my post, or to David.

My feeling, for the record, is that the failure is the failure of the welfare state, which, after all, promised us all that it could handle the business cycle, and that depressions are a thing of the past, and that it could give us all these wonderful benefits, if only we'd vote for Pierre Trudeau.

The current shortfall in our pension system isn't because people aren't making their annual 'allowable contributions'. In fact, I don't know what that means. They have no choice but to contribute to CPP, and if the CPP is in shortfall, surely that's because (a) the benefit period has been extended, by lowering the retirement age to 65, (b) benefits have been increased, and (c) lower fertility rates amongst those who have to pay the current benefits -- the young.

In other words, back in the 1960ies, when there was a low ratio of retirees to working people, the costs per worker weren't high. But, in present times, where the natural increase on population is reduced by 100,000 abortions a year, there are few workers per retiree, and the costs per worker are high.

Add to that -- we're living, and collecting CPP, ten years longer than we used to.

If the CPP were a private scheme, the organizers would be jailed for operating a Ponzi scheme, because it works on Ponzi principles -- essentially, current benefits are paid out of current 'contributions'. ('Contributrions' is an Orwellian phrasing for this extortion).

CPP 'contributions' are one of the chief reasons people can't provide for their own retirements.

The pension obligations of the state aren't the problem, but reneging on them may be the solution. That's why the term 'pension' is bothersome. People think of it as an asset they bought and paid for, with the state being the trustee. But it isn't -- it's a disguised tax, and the surplus revenues of the early years were spent on the expansion of state services, with an low interest IOU given in return.

We ran national deficits for 40 years, financing not only CPP but health care, and all the rest of with borrowed money. It isn't a surprise how we got here. Can you spell s-o-c-i-a-l-i-s-m?

You cerrtainly can't reasonably blame international markets. They work on the basis of people wanting to make a buck because that's cheaper and produces better results in the long run. There's nothing wrong with that.
David





Joined: 06 Sep 2008
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PostPosted: Sun May 01, 2011 10:50 pm    Post subject: Reply with quote

Miss Deborah Grey (Beaver River, Ref.): Mr. Speaker, 32 years ago today John Kroeker was fired from the federal civil service for daring to criticize the Pearson government's newly created Canada pension plan.
Mr. Kroeker rightly predicted that the CPP was unsustainable and for that he lost his job. For that he was blackballed by the federal government and labelled a kook. Mr. Kroeker said that the CPP would be broke by the year 2000 without constant and large infusions of cash from Canadian taxpayers.

-----------------------------------------------------------------------------------------------------------

Miss Deborah Grey (Beaver River, Ref.): Mr. Speaker, it is interesting that this junior minister talks about having the support of all the provinces on it.

In 1965 Mr. Kroeker stated that the Pearson government simply lured the provinces into the CPP by offering them loans from the fund at amazingly low bargain basement interest rates. No wonder they are keen on the project.

Thirty years later in the 1990s this government is doing exactly the same thing with the provincial governments. Using the CPP as a cash cow for governments was a lousy idea in 1965 and it is a lousy idea now, 30 years later.

Why did the Prime Minister and those in charge of dealing with the provinces right now on this deal lure the provinces into a sweetheart deal at the expense of the Canadian taxpayers who will have to belly up and pay that cash?

The Liberals learned nothing since 1965. Which way will it be, sweetheart deals for the provinces or the best deal for Canadian taxpayers in their retirement?
...........................................................................................................

Miss Deborah Grey (Beaver River, Ref.): Mr. Speaker, Canadian young people want to know that there will be a sustainable plan for them. They would like to earn three times as much through privately funding their own RRSP rather than any CPP plan.

Thirty-two years ago these Liberal politicians called John Kroeker crazy for predicting that CPP was unsustainable without constant payroll tax increases.

In the next 6 years from now alone, premiums will have gone up over 70 per cent and Canadians will be paying a full 10 per cent of their paycheques toward a pension plan that still is not sustainable.

The minister thinks people in the galleries here and across the country are really pleased about this plan of mismanagement of their own money.

Is it not true that the government is hiding the fact that premiums will have to go up again before the Canadian public gets any benefit which these people have promised?

-----------------------------------------------------------------------------------------------------------

http://www.parl.gc.ca/HousePub.....Ses=2#8588
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