Back in 1995, I had the extreme pleasure of being one of five Kelowna residents who took exception to Mr. Paul Martin’s concept of paying down the government deficit by increasing personal income tax. Our approach was to start a letter-writing campaign to Mr. Martin and Mr. Chretien, that outlined our views and our intended action, should he (they) carry out their plans. Suffice it to say that the campaign met with unbelievable success and the only increase in taxation that year was one cent per litre of gasoline (you’re welcome).
As I understand it, the problem was that the deficit had been created by Mr. Martin’s own party when a previous leader had scooped the idea of deficit financing from observing our neighbours to the south, while under the leadership of Mr. Ronald Reagan. It seemed to be working for them, so why not us?
Well, by 1995, it was my understanding that Canada’s deficit had risen to something in the neighbourhood of 34 billion dollars… (that’s $34,000,000,000). Where is it now? I’m not sure. But what is the significance of a 34 billion dollar debt?
Let’s put it into a different perspective. Let’s start with only one billion dollars, and let’s suppose that you owed someone one billion dollars, and let’s suppose that you decided to retire the debt at the rate of one dollar per second. Let’s do the math.
To retire your debt at the rate of $1/second, that would mean $60 per minute, $3,600 per hour, or $86,400 per day. Looks like this shouldn’t take too long, eh? But let’s continue.
At $86,400 per day, that would mean $31,536,000 per year (that’s thirty one million, five hundred and thirty six thousand dollars per year). Now if you divide one year’s payment into the billion dollars that you owe, you’ll discover that it will only take 31.7 years to retire your debt at the rate of $31.5 million dollars per year. Now the real problem with all of this is simply that with debt comes “interest” … and we haven’t even begun to do the math on that.
So, the next time you hear your candidate in the upcoming election, talking in terms of all the money they plan to spend in order to “buy” themselves that comfy seat in Ottawa, try to remember that it’s your money that they plan to spend, and you and your ancestors will be saddled with covering the debt.
When the government says they’re spending tax money to give you something for free, look out. It’s your money they’re spending, so “it ain’t free.”
Vote as you please, but vote.
Ron Long