Tuesday, April 26, 2011

Politics and Economics - Canadian Election

So you want to vote Stephen Harper. You like the fact that he's created these tax free savings accounts, these little tax havens where you can store, invest, and stow away a few grand a year without the government touching it. It's all good, right. Even if you can't quite save five grand per year and a couple more for the educational savings account, it's nice to know that you could, if you come into some money. But what about the taxes we are paying thanks to the conservatives? Here's a very rough look at Canada's historical debt.

Government Years Debt from govt Avg int % Prev int. Real debt/surp
billions other gov'ts

Liberal 1968-1984 100 11% 90 bn
Conservative 1985-1992 420 10% 90 bn 330 bn
Liberal 1993-2005 (100) 3.5% 160 (247)
Conservative 2006-2011 61 2.5% 0 61 bn

What the above numbers crunch down to is this.

The Liberal government started off a deficit of 90 billion dollars, more or less, mostly accumulated by the Trudeau Government between 1968 and 1984.

The conservatives got into power, and had to pay off that debt at historically painful interest rates. But, along with the Liberal debt interest payments of around 90 billion over their eight years, the conservatives accumulated their own debt of 350 Billion more to bring the total debt to 520 billion.

The liberals got back into power and went wait a minute, this is out of control. The Liberals paid off 100 billion dollars of the debt over their 12 years in office. This however is deceptive. On top of the 100 billion they paid off, they paid 147 billion servicing the previous conservative debt. If you consider the original Liberal debt was 90 billion plus 90 billion in interest payments, the Liberals paid off their original debt and were now strictly servicing the Conservative debt.

So the Conservatives get back into power. The debt balloons again.

We are now paying off more than half a trillion dollars in debt - all of it Conservative. At 2.5% interest that works out to 12.5 billion dollars per year in taxes just to service the interest payments. That's $416 per year per Canadian to service the debt. Considering there are 17 million employed Canadians, the interest on the debt is $735.00 per employed Canadian

If you're like me and want to pay off the debt, like you would on your house, and plan a 25 year timeline. You'd tack on another $1223 per year, bringing total the debt up to about $2000.00 per year to pay off.

So let me ask you a question. Who do you want in power? The guys who gives you a great tax break, if you can actually afford to save that money, and then mortgage your children's future, or the guys who actually started fixing the screw-ups and began to pay the debt off. Personally, I find it hard enough paying a ten grand per year on my own mortgage. I don't need to pay off Stephen Harpers and Brian Mulroney's as well.

Vote Liberal
Vote NDP
Vote Green.
Heck, Vote for the Bloc

Just don't vote for mortgaging my children's future so the rich can get another tax break.

A little disclaimer. My numbers aren't exact but estimates based on information that's available. For the most part I think they're pretty close, give or take a few percent. The point of the numbers is to show how fiscally irresponsible the conservative government has been.

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