A longtime rural resident, I use my 60 plus years of life learning to opinionate here and elsewhere on the “interweb” on everything from politics to environmental issues. A believer in reasonable discourse rather than unhelpful attacks I try to give positive input to the blogesphere, so feel free to comment upon rural issues or anything else posted here. But don’t be surprised if you comments get zapped if you are not polite in your replys.

Friday, October 23, 2009

Deep in debt

With the Ontario Government just releasing their budget forecast with a 25 Billion deficit for this year I was somewhat surprised by the lack of commentary in the blogesphere about this millstone hung around our neck. It is true that most of the blogs and aggregators I visit are left leaning but come on folks NO government should get a free ride on this one. Lets take a few minutes away from the Federal fiasco to look at the Ontario situation, whilst I am sure that some stimulus was in order I am not at all sure that this kind of debt is good for the economy or for Ontarians.

Twenty Five Billion Dollars, that’s abt $5000 per household more being spent than is coming in, of which according to some reports over a third is interest on the provincial dept.

“That's on a $113.7 billion budget, which includes $104.3 billion in spending on programs and $9.4 billion on interest payments to service a provincial debt that has skyrocketed to $137.9 billion.”

My first question on this is where the H are they borrowing the money from? At 9.4b interest on 137.9b debt that’s abt 7%, with prime at ½% I think its about time they renegotiated their mortgage!! The second part of this is that each family not only has that $5000 budget shortfall around their neck but also has a dept of around $27,000 to pay off. Scary isn’t it!

But wait we are not done yet, we cannot forget those federal debts, at an estimated 55.9 Billion Dollars budget deficit that’s about another $4500 per Canadian household in more outgo than income. But wait there is still more, how about the Federal DEBT of around $495 Billion Dollars that adds another $38,000 per household for a grand total of about $75,000 per average household using the 2006 census figures

I wonder how many of us with a debt of $50 or $60,000 and an income almost $10,000 less than our obligations would be able to go out and borrow more on the assumption that we were going to get a better job some time in the next 3 or 4 years!! I also wonder how many employers in this position would not have to lay off some of their workers and cut costs rather than increase their prices. That the government workers unions are already screaming about that possibility shows they are just as out of touch with reality as are our governments.

Ok now I’m even more depressed, think I will go and count my meager savings to see how long I can hold out………….


Jennifer said...

I used ”Credit Solution” to settle my debt and avoid bankruptcy. They managed to reduce my debt up to 58% and improve my credit score. It's legitimate . I came across this company on NBC News Special Edition. Check it out here:

Anonymous said...

Just to let you know why interest is around 7% from your calculations. Remember that much of the money borrowed came years ago, when interest rates were higher. Since a lot of government debt is in the form of bonds, the interest rates are set and fairly inflexible. There may be ways to reduce their interest rate but it's not like they can just renegotiate their mortgage like an average person.