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According to information released Nov. 25, 1999 in the current
issue of the annual debt
report by the Fraser Institute,
the average Canadian family of four carries a government debt burden of almost half a
million dollars.
At the rate of $28,000 in taxes that an average family of four pays on an annual income
in the order of $50,000 — even if we were to stop feeding the politicians and bureaucracy
who forced us into this horrenduous state of affairs — that debt will never be paid off
at that rate. Someone will somewhere along the line welsh on it. There is
simply no other choice.
A while ago I had attempted to construct an estimate of the total of the Canadian debt,
going by a number of sources I had come across. It was a pretty difficult process
for me and even more difficult to keep up-to-date. I hadn't been able to find a
single comprehensive source of that information anywhere. You would almost think
that someone is trying very hard to hide something from us. The results of what I
had found are in a page titled "Does Moral Decline equal Economic
Decline?", containing comments on information released last year by the Canadian
Family Action Coalition.
Some other related articles and information I found are at "Families
and Taxes" and "Trashing the US Tax Code, for
the sake of the family."
What I had figured out was that when unfunded liabilities are included in the average
federal debt of Canadians, and if the (then) $640 billion unfunded liability of the
Employment Insurance scheme/scam is considered as well, the average amount of the federal
debt to individual Canadians (every man, woman and child) is at more than $108
thousand. To that must be added the provincial and municipal liabilities; in the
case of children, the personal debts of their parents, and in the case of adults their own
personal debts.
Not surprisingly, the Fraser Institute in its current debt report calculated a somewhat
higher and more precise figure of $115,777 as to what the share of the total government
debt is for each Canadian man, woman or child. It is described in the
appended
article.
You may wonder why nobody in power seems to be worried. Do you really think that
they would tell anyone, even if they were?
You may think that the calculations must be off, because if there was truly such a
massive amount of debt and liabilities, surely, someone, some creditor, would call in at
least a portion of the debt; foreclose so to speak, force the government into declaring
bankruptcy (which it should have done already before the Liberals had a chance to make
an intolerable situation far worse).
Well, you see, the answer to that is like
this. Anyone who ever had to determine who of his creditors or utility companies
would be paid and which would not — out of a paycheque that didn't leave enough after
taxes to pay everyone on time — will understand perfectly well how it is done. You
do it by making payments only when they absolutely must be made, like on the bank loans
that would otherwise be called in.
For the governments, with the federal Liberal government far out in front, that takes
care of the most important 20% of the accumulated debt. The remaining $3 trillion or
so are being hidden from everyone's view. If we don't see that portion of the
debt, we don't have to worry about it, and that's why nobody ever gets told about
it. We wouldn't want Canadians to worry their hearts out, would we?
However, be absolutely certain that this large hidden debt is very real. It will
come out in the open, it does come out in the open all of the time, in the form of
"unforeseen" claims against the various government's unfunded taxation schemes,
the contributions to which to secure them were long ago squandered away by funneling them
into general revenue: Old Age Security, Canada Pension Plan, Health Care, Employment
Insurance and others. Nevertheless, as I mentioned above, no amount of trying will enable
us to make the kind of payments a debt that size requires. That's why the unfunded
liabilities keep on growing, and that's why the government keeps on cutting back on
everything imaginable, just like anyone else who can't pay all of his bills. But
that doesn't make the debt go away.
No matter how much we hide it, no matter how much we deny it, it must be paid
eventually. It will be paid! It will be
paid by our children, by our grandchildren, by our great-grandchildren...you get the
picture.
When our descendents learn the truth about what their parents, grandparents, and Jean Chretien and the Liberal Party have done to them, it may well be that Hitler's reputation
will look great in comparison. But, as I said, let's not worry about any of
that. It's not our problem. Our kids will come to terms with all of that,
right? After all, isn't all of what the Liberal Party does "in the best
interest of our children?"
If things like that are being perpetrated by private companies, they are viewed for
many different good reasons as very serious criminal offences, and the
directors of companies and corporations engaged in such nefarious
financial shenanigans will spend a considerable amount of time behind
bars. But, our Liberal
government, which has no qualms about lying to us when it promises "We'll kill the GST," or that it will cut taxes, or which tells us that lesbian "families"
(by far the most violent and unstable) are as good for the upbringing of children as are
good-old families headed by good-old mom and dad (the most stable, with a rate of violence
more than ten times lower than that in lesbian "families"), can do with impunity
whatever it chooses. And if it should happen by chance that what the Liberal
government wants to do won't be acceptable in Parliament, then there's always the Supreme
Court that can make sure that things go the way they are planned, like making sure that
the Natives get all of their $200 billion settlement claims, or like making female civil
servants happy, who get $3.6 billion in back pay for the hardships they suffered by not
earning as much working as telephone operators as did the men sitting on their butts all
day driving trucks, bulldozers and other heavy machinery.
As to the problems posed by all of this, "...there are, as yet, no Canadian
solutions proposed to deal with them," says Jason Clemens, Director of Fiscal Studies
at The Fraser Institute.
We don't need any new solutions. It's all of the new and Liberal
"solutions" that caused the mess in the first place. You know what the
solution to all of this is, right? It'll work. It'll work well. It
worked well before and will do so again. It'll be the only possible alternative that'll
save us from total collapse. We'll have to cut taxes, first of all, and then engage
on a program to reconstruct our families. After all, it will be our families who'll
carry the burden of looking after and solving the problems created by our government. Real
families, and not "lesbian families," are the best, most effective
and cheapest welfare system ever devised, as long as we keep the government out of their
lives.
The solution is not, as the Liberal Party is so diligently trying to achieve, the
destruction of our families and to get rid of them once and for all. It seems to me
that we would be far better off to get instead rid of the Liberal government once and for
all.
So, what do you think? Is it true that Canada, which came — as a result of
Liberal bumbling and arrogance — to be by far one of the most severely indebted
countries in the world, can truly be the best country of all in the world to live
in? I don't think so, do you? Maybe we should ask Jean Chretien one more time,
just to be sure. He's always so full of — confidence and certainty? Maybe if
we listen to him just one more time we'll all come to believe him, and all of our and our
children's problems will go away. Yeah, sure.
Walter H. Schneider
The top-ranking of frequently told lies:
"I'm from the government and I'm here to help you."
"I'm from the UN and intend to protect your civil liberties."
"What we do is in the best interest of the child."
"The fight for women's rights is a fight for equal rights."
The costs of these and other lies by government officials constitute a
debt
in the order of $244,000 for each Canadian taxpayer.
Each Canadian is on the hook for $116,000, according to annual
Fraser Institute study
Contact:
Jason Clemens, Director of Fiscal Studies
The Fraser Institute, (604) 714-4544 Email: jasonc@fraserinstitute.ca
Release Date: 25 November 1999
VANCOUVER, BC>>> According to The Fraser Institute's yearly debt study, federal,
provincial, and local governments have accumulated a staggering $850 billion in direct
debt and $3.5 trillion in total government liabilities. This translates into each man,
woman, and child in Canada owing $115,777 in total liabilities-almost four times the
average Canadian salary.
The study, Canadian
Government Debt 1999: A Guide to the Indebtedness of Canada and the Provinces shows
that from 1994 to 1998, direct debt (what most people and governments refer to as
"the debt") has grown from $739 billion to $850 billion, a 15 percent increase.
Total liabilities have increased from $2.9 to $3.5 trillion during the same period, an
increase of 21 percent. Most of the increase in total liabilities is due to substantial
increase in unfunded liabilities.
Among the provinces, Ontario carries the heaviest burden, in part because the
allocation of federal liabilities is based on the contributions made to the federal
treasury. Federal, provincial and local liabilities add up to $126,938 for each Ontarian.
Albertans are next at $119,464, followed by Quebecers at $114,248, and British Columbians
at $108,441 (Table 1). Maritimers owe less than the average Canadian because of their
lower contributions to the federal treasury.
Definition of Liabilities
Total liabilities include direct debt, debt guarantees, contractual commitments,
contingent liabilities, and obligations. Direct debt includes the accumulated net debt
incurred by a government and all its agencies. Unfunded liabilities include programs and
benefits that government has committed to provide in perpetuity, such as Old Age Security
(OAS), the Canada Pension Plan (CPP), and health care.
Unfunded Liabilities are the Most Serious Concern
Most of the total liabilities are due to the unfunded liabilities of the health care
system, OAS, and the CPP.
The CPP unfunded liability alone grew by 58.8 percent between 1992 and 1998. In total,
CPP, OAS, and healthcare unfunded liabilities grew by 45.6 percent during that same
period.
At their inception, these programs were based on the assumption that population
demographics, economic growth rates, and wage increases prevalent in the 1960s would
continue indefinitely. It was considered favourable social and economic policy to transfer
a small amount of money from a large group of younger workers to benefit a small group of
relatively poor retirees.
These assumptions were patently wrong. Birth rates have declined, income growth has
stagnated, and mortality rates have decreased. In 1995, seniors represented 19.8 percent
of the working age population, this figure is expected to increase to 38.9 percent by
2030. These demographic changes will continue to undermine the ability of these plans to
provide the intended level of benefits.
The federal government and many provincial governments are in surplus. Now is the time
to look at the current structure and long term viability of our health care system and
income support programs, namely OAS. "While the direct debt of governments is
beginning to decline absolutely and as a fraction of our total national income,
obligations are trending steadily upwards. Canadians are just beginning to recognize the
significant challenge posed by these accumulating obligations and there are, as yet, no
Canadian solutions proposed to deal with them," says Jason Clemens, Director of
Fiscal Studies at The Fraser Institute.
Canada Compared to the World: The Severely Indebted Country (SIC) List International
comparisons allow Canadians to get an idea of the relative severity of Canada's debt
burden. A standard feature of The Fraser Institute's annual debt study is a ranking of 146
countries based on their debt as a percent of discretionary income.
More important than Canada's overall debt ranking is our relative ranking against other
high income OECD (Organisation for Economic Cooperation and Development) nations, where
Canada ranks third lowest (27th)-only Italy and Belgium rank lower. The United States
ranks 12th among the OECD. Among G-7 nations, Canada is second last. While Canada is
considerably above Italy, it is also significantly below other G-7 nations. Japan ranks
twelfth overall and first in the G-7 with a debt-to-discretionary-income ratio of 16.5
percent. Canada ranks sixth among G-7 nations with a ratio of 68.2 percent and ranks 81st
overall among the 146 nations in the Severely Indebted Country (SIC) List.
"The assessment of Canada's indebtedness demands continued caution, vigilance, and
prudence. We must be cautious to ensure that we do not permit apathy to erode the recent
gains in fiscal security. We must be vigilant that we do not assume new and larger
obligations; we must be prudent in forming policies to deal with those that already
exist," concludes Clemens.
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Established in 1974, The Fraser Institute is an independent public policy organization
based in Vancouver.
For further information contact:
Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca
The charts shown below indicate Canada's
fiscal rank in relation to other countries on the list of countries examined by the Fraser
Institute. The source of the data is Appendix D in the 1999 Annual Debt Report produced by
the Fraser Institute.
The specific URLs where the data are located are as follows:
publications/critical_issues/1999/debt/section_10_1
publications/critical_issues/1999/debt/section_10_2.html>
publications/critical_issues/1999/debt/section_10_3.html>
publications/critical_issues/1999/debt/section_10_4.html>
publications/critical_issues/1999/debt/section_10_5.html>
publications/critical_issues/1999/debt/section_10_6.html>
Note: When looking at the charts shown above, keep in mind that the debt figures shown
don't include unfunded liabilities or those obligations that the politicians usually (it
would perhaps be better to say, NEVER) don't include when they talk about the accumulated
budget deficit. It is very likely that what has become common practice in Canada is
also practiced in the US and the other OECD countries. Only one thing is apt to
describe such creative fiscal reporting. It would be exceedingly rare for any
corporation to survive for long if it hides from such unpleasant realities.
The G-7 Nations are comprised of the United States, Canada, Great Britain, France,
Germany, Italy, and Japan.
OECD stands for Organisation for Economic Co-operation and Development.
The OECD brings together 29 countries sharing the principles of the market economy,
pluralist democracy and respect for human rights. The original 20 members of the OECD are
located in Western countries of Europe and North America. Next came Japan, Australia, New
Zealand and Finland. More recently, Mexico, the Czech Republic, Hungary, Poland and Korea
have joined.
| OECD Member Nations |
Australia (1971)
Austria (1961)
Belgium (1961)
Canada (1961)
Czech Republic (1995)
Denmark (1961)
Finland (1969)
France (1961)
Germany (1961)
Greece (1961) |
Hungary (1996)
Iceland (1961)
Ireland (1961)
Italy (1961)
Japan (1964)
Korea (1996)
Luxembourg (1961)
Mexico (1994)
The Netherlands (1961)
New Zealand (1973) |
Norway (1961)
Poland (1996)
Portugal (1961)
Spain (1961)
Sweden (1961)
Switzerland (1961)
Turkey (1961)
United Kingdom (1961)
United States (1961) |
It makes one wonder. Does it not look as if membership in the OECD virtually
guarantees severe indebtedness for a member and as if the level of indebtedness is at
least to some extent a related to the duration of a country's membership? Could it
be that it would be better for all of us if the OECD were to dissolve and make room for
normal market interactions instead of manipulating the global economy?
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