Big Picture Thinking

[Chaerophon]

3) Pay the debt down at a constant expenditure of 47 billion per year: After all, as time goes by, that 47 billion gets cheaper. At the end of the 35 years, the debt stands at 291 billion. The total expenditure in 2003 dollars is 1311 billion and that has more than halved your debt.

4) Pay the debt down by an annual amount of 47 billion adjusted for inflation: After all, the income for the government, the GNP, the budget, etc. all are adjusted. This would keep the amount spent on the debt roughly a constant fraction of the budget. Now this one is a real kicker. It doesn't run out to 35 years, because the debt is totally retired in 23! And the total cost is 1059 billion in 2003 dollars.

Of course, you're aware that in order for your bottom two program to be enacted, we would require some monstrous and consistent surpluses! :P

However, I must agree: yes, if this was feasible in terms of the Canadian budget, I'm sure that it would be done to some comparable degree. Unfortunately, they've had to cut expenditures to social programs such as Medicare to a startling degree already (although they've reinvested a fair portion of recent surpluses back into the program). In a recent survey, a majority of Canadians actually identified Medicare (the Canadian health care system), of all things, as the primary "symbol" of what it means to be Canadian! I suppose that this can serve as evidence as to some of the marked ideological differences that exist between our two countries along with all of the similarities. In order to enact the sort of policy that you're suggesting (given the fact that 47 billion dollars (corrected or not) when added to the 45 billion dollars in real interest payments is a BIG expense for our smaller economy) we would have to give up an awful lot of benefits that I'm quite certain the majority of Canadians are not willing to part with. To my mind, of the options that you suggest, that leaves us with numbers one and two. The question is, is the marginal improvement in our financial lot after a period of 35 years really worth the expenditure? I don't really think so given the protestations of Canadians at the current reduction in services. While Albertans and, to a lesser extent, British Columbians may be willing to privatize some public health facilities, they are STILL crying out to the government for more money and it seems that the majority of the public is strongly opposed to the en masse privatization of Canada for precisely the reason mentioned in my above post - with privatization, all of a sudden our hydro, our telephones, and our health care will eventually come to be owned primarily by American interests.

I suppose that this, then, highlights the differences in our respective economies and robs some credence from my argument regarding American economics. (Sorry, I was born and raised here and am bound to have a different perspective on some of these things :) ). I am unaware as to whether the American government can afford to make the sort of drastic payments that you suggest in an effort to reduce the debt and I have no idea as to what sort of public outcry would be raised in such an event. However, whether these factors are in line with my theory or not, it still seems silly to me for the Bush administration, facing such an economic controversy, to lower taxes, from both an economic and political perspective. One, interest rate adjustments and the institution of monetary policy would seem likely to have more of an effect on the economy's GDP, etc. than will tax cuts. Two, from a political standpoint, using tax cuts to stimulate an economy is all fine and dandy - until the time comes that you need the money to be derived therefrom and you have to reinstate them. As we can see, America faces some important economic questions in the coming years - particularly if the military spending continues to increase, and somewhere along the line, debts must be paid while to a certain degree the social concerns of the country will continue to need to be met.

BTW, you've got mail :)