Wednesday, July 17, 2013

Our Debt

No matter some people think, we do have unsustainable debt. Yes, Keynes did say that governments should spend in bad times, or in economic recessions and depressions to get the economy going again. However, he also said that we need to pay down the debt in good times to be ready for when the bad times come.

The problem was that our governments spent all the money they received and then went heavily into debt in good times. That means that we had not much breathing room to deal with bad times. But guess what, we voted in governments that did this.

Another problem is unfunded liabilities. Our current debt is just what has been spent. Programs like OAS are unfunded liabilities and are not on any government balance sheet. Money for OAS come out of current money collected. Trouble is there are lots of boomers to retire shortly. The cost of OAS payments are going to skyrocket.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

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