Government Debt vs. Ours – Is It Fair to Compare?

Now that the Canadian Federal Election is a month behind us, what are we in for? If you voted Conservative, it’s nice to see there’s a majority government and we won’t be spending the $300 million on an election every two years.

If you’re not Conservative – don’t worry about it – that’s not a true conservative government that’s elected in any event. Partly, because us Canadians wouldn’t want it, or tolerate it.The budget two weeks ago had $37 billion in deficit. That’s more spending than income. And the government will take four years to get out of the hole. If you’re spending more than you’re earning, four years puts you into bankruptcy, and you had better deal with this BIG problem sooner.

You may also realize that nobody is talking about our $500 billion debt. That’s no different than most of us individuals. We only really want to focus on making it through each month, and thinking about our total debt is way too depressing. Well, you cannot change what you don’t acknowledge. But….let’s not talk about that, or even think about the total staggering amount of debt…. Right now, however, that debt takes $40 billion of interest payments. That’s the deficit right there if we weren’t in debt!

Again, it’s exactly the same as most people’s finances. The interest we pay each month has a real choke hold on our finances.

Four years to get out of the hole? That’s four years of not a single dollar onto paying down the debt. And that’s in an economic upturn cycle. So what happens when the next down cycle, or recession comes? Yup. We’re right back to borrowing, just to pay the bills.

The vicious cycle, for governments all over the world, and all of us, is totally backwards. Financially successful people SPEND during a bad economy and SAVE during the boom times. Think about that. They’re spending when everything is on sale and saving when earnings are up and inflation makes things more expensive.

Lastly, can we please stop comparing ourselves to broke countries? Well, we’re better off than this country or that. What nonsense. My neighbor might have one foot in bankruptcy court and that makes me financially successful? Give me a break!

And a final question to ponder: Who leads the way here? Should the government be the ones to balance their budget and live within their revenues, or should we lead by example and then hold the government accountable?

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