Few national economic issues have generated the same kind of concern as has the federal
debt problem of Canada. There is a pressing need for long-term policies to lift Canada
out of the national debt hole it is in. Eliminating the debt will not only free up money
being spent on interest and reduce taxes, but make Canada a more feasible place for
future generations to live and work.
Interest on the debt has eroded the government's ability to fund its own operations and
essential social services. Presently, thirty-five cents of every tax dollar the federal
government raises is used for interest payments alone on the debt. Though there have
been operating surpluses within the federal government, they have been eaten up by the
debt interest payments. Few people understand the devastating effects of compound
interest. The debt, at a compound rate of 10%, doubles in seven years, quadruples in
fourteen years, and is eight times as much in twenty-one years. This creates great
difficulty for governments to slow the debt, much less eliminate it. Our federal debt
grows all by itself to the tune of approximately ninety million dollars every day. This
may seem hard to digest, but it is reality. The need for debt elimination is vital if
Canada wants to free up billions of dollars being spend on interest payments. Two
approaches may be taken to this. First, an increase in government revenues through
higher taxation may be considered. However, taxes are already at a point where some
people feel they are working merely to pay the government, rather than support
themselves. Second, a restraint on government spending by means of cutbacks may be a
path, possibly a difficult one, to the road of eliminating our federal debt. Either way,
it will be the young citizens of Canada that will have to pay for previous government
overspending. "Our national debt, after all, is an internal debt, owed not only by the
nation but to the nation. If our children have to pay the interest, they will pay that
interest to themselves." (Franklin Delano Roosevelt)
As our debt continues to increase, so do the taxes that Canadians are paying.
Thirty-five percent of our taxes are being paid to reduce the debt, leaving the rest to
fund government programs such as health care, education, and job creation. "For every
benefit you receive a tax is levied." (Ralph Waldo Emerson) However, a long look must be
taken at how the tax dollar is distributed to various programs to determine which ones
need more funding, and which should be receiving less. There is, by no means, excess
money to spend foolishly; that is what got Canada into the financial crisis it remains in
today. But by restricting the growth of program payments, eliminating some programs and
cutting back on others, and by having higher income individuals pay back a greater share,
dollars are now being reassigned to the most essential programs and to needy Canadians.
The battle to reduce tax waste and increase efficiency continues across all government
departments. Nevertheless, Canadians now claim they are being taxed to death. And the
only way to stop this excessive taxation is for the government and citizens to work
together to fight the debt, and subsequently, less tax dollars will be needed to pull
Canada out of the financial crisis it is in.
There is no doubt that a debt-free country would be the greatest place in the world to
live and work. There would be adequate funding for job creation by means of public and
private investment, tax dollars would be spent responsibly and wisely, resulting in tax
relief but still receiving essential services, and social spending would be prioritized
to ensure the long-term survival of social programs that Canadians value and need.
However, the position Canada is in now greatly differs from this. Canadians are out of
work. Our government spends too much, owes too much, and taxes too much. This vicious
cycle drains the lifeblood out of the economy, scares away private investors who create
jobs, and makes Canadian products less competitive. Taxes are too high. Government
over-spending has led to enormous interest payments on the debt, driving up the tax
burden on individual Canadians. And finally, our health care system is in critical
condition. Out-of-control government spending is the greatest single threat to health
care and other social programs in Canada. As one can see, the debt-free scenario is much
more attractive. This would unquestionably draw more people to Canada to live, raise
families, and work, consequently stimulating the federal economy.
The journey to a debt-free Canada will not be a short one. Nonetheless, measures must be
taken to eliminate this economic catastrophe before it gets more out of hand than it
already is. We must learn to live within our means, and understand that we can no longer
spend money we do not have. "Some debts are fun when you are acquiring them, but none
are fun when you set about retiring them." (Ogden Nash)
Bibliography
Emerson, Ralph Waldo. Quotation Homepage: http:\\www.lexmark.com/data/quote-21.html.
Nash, Ogden. Quotation Homepage: http:\\www.lexmark.com/data/quote-21.html.
Roosevelt, Franklin Delano. Quotation Homepage:
http:\\www.lexmark.com/data/quote-21.html.
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