The Debt: An Economic CatastropheFew national economic issues have generated the same kind of concern as has thefederal debt problem of Canada. There is a pressing need for long-term policiesto lift Canada out of the national debt hole it is in. Eliminating the debtwill not only free up money being spent on interest and reduce taxes, but makeCanada a more feasible place for future generations to live and work. Interest on the debt has eroded the government’s ability to fund its ownoperations and essential social services. Presently, thirty-five cents of everytax dollar the federal government raises is used for interest payments alone onthe debt. Though there have been operating surpluses within the federalgovernment, they have been eaten up by the debt interest payments.
Few peopleunderstand the devastating effects of compound interest. The debt, at acompound rate of 10%, doubles in seven years, quadruples in fourteen years, andis eight times as much in twenty-one years. This creates great difficulty forgovernments to slow the debt, much less eliminate it. Our federal debt growsall by itself to the tune of approximately ninety million dollars every day. This may seem hard to digest, but it is reality. The need for debt eliminationis vital if Canada wants to free up billions of dollars being spend on interestpayments.
Two approaches may be taken to this. First, an increase ingovernment revenues through higher taxation may be considered. However, taxesare already at a point where some people feel they are working merely to pay thegovernment, rather than support themselves. Second, a restraint on governmentspending by means of cutbacks may be a path, possibly a difficult one, to theroad of eliminating our federal debt. Either way, it will be the young citizensof Canada that will have to pay for previous government overspending.
Ournational debt, after all, is an internal debt, owed not only by the nation butto the nation. If our children have to pay the interest, they will pay thatinterest to themselves. (Franklin Delano Roosevelt)As our debt continues to increase, so do the taxes that Canadians are paying. Thirty-five percent of our taxes are being paid to reduce the debt, leaving therest to fund government programs such as health care, education, and jobcreation. For every benefit you receive a tax is levied. (Ralph WaldoEmerson) However, a long look must be taken at how the tax dollar isdistributed to various programs to determine which ones need more funding, andwhich should be receiving less.
There is, by no means, excess money to spendfoolishly; that is what got Canada into the financial crisis it remains in today. But by restricting the growth of program payments, eliminating some programsand cutting back on others, and by having higher income individuals pay back agreater share, dollars are now being reassigned to the most essential programsand to needy Canadians. The battle to reduce tax waste and increase efficiencycontinues across all government departments. Nevertheless, Canadians now claimthey are being taxed to death.
And the only way to stop this excessive taxationis for the government and citizens to work together to fight the debt, andsubsequently, less tax dollars will be needed to pull Canada out of thefinancial crisis it is in. There is no doubt that a debt-free country would be the greatest place in theworld to live and work. There would be adequate funding for job creation bymeans of public and private investment, tax dollars would be spent responsiblyand wisely, resulting in tax relief but still receiving essential services, andsocial spending would be prioritized to ensure the long-term survival of socialprograms that Canadians value and need. However, the position Canada is in nowgreatly differs from this. Canadians are out of work.
Our government spendstoo much, owes too much, and taxes too much. This vicious cycle drains thelifeblood out of the economy, scares away private investors who create jobs, andmakes Canadian products less competitive. Taxes are too high. Government over-spending has led to enormous interest payments on the debt, driving up the taxburden on individual Canadians.
And finally, our health care system is incritical condition. Out-of-control government spending is the greatest singlethreat to health care and other social programs in Canada. As one can see, thedebt-free scenario is much more attractive. This would unquestionably draw morepeople to Canada to live, raise families, and work, consequently stimulating thefederal economy.
The journey to a debt-free Canada will not be a short one. Nonetheless,measures must be taken to eliminate this economic catastrophe before it getsmore out of hand than it already is. We must learn to live within our means,and understand that we can no longer spend money we do not have. Some debtsare fun when you are acquiring them, but none are fun when you set aboutretiring them. (Ogden Nash)BibliographyEmerson, Ralph Waldo.
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Nash, Ogden. Quotation Homepage: http:www. lexmark. com/data/quote-21. html. Roosevelt, Franklin Delano.
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