It's Just Money

It can magically generate itself just like budgets can magically balance themselves:

Receiving a credit card bill of $243,476 would no doubt be a shock for most Canadians.

But if you add up all the liabilities of every Canadian government — federal, provincial, and local — that is how much each taxpayer would owe of the $4.1 trillion total in direct debt and unfunded liabilities. ...

As of 2011/12, the combined net direct debt of federal, provincial and local governments totalled $1.2 trillion. Direct debt alone translates into a $71,901 bill for every Canadian income taxpayer.

Although not the largest component of total government liabilities, direct debt has important consequences.

Governments have to pay interest on money they borrow.

These payments aren’t insignificant. All levels of government combined to pay $62.3 billion in interest payments in 2011/12. That’s 10% of total government revenue in the same year.

In other words, for every dollar collected by Canadian governments, 10¢ went to paying interest on direct debt.

That’s money not used for programs like health care, education, social services and tax relief.

Over time the borrowed money must be paid back so direct debt is a deferred tax bill.

Future taxpayers — young Canadians — will partly pay for current deficit spending.

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When Canadians look at gas prices, grocery store receipts and mortgage payments, that claim might raise some eyebrows. Does life feel more affordable now than it did seven years ago?

Here’s what the numbers say. The price of food jumped by nine per cent over the year, the cost of homes skyrocketed and many people can’t afford to fill their cars to get to work.

In 2015, the price of gasoline in Vancouver was $1.02 per litre. Now it’s more than doubled, costing $2.20 per litre. That’s more than $240 to fill a pickup.

Taxes are a huge factor in gas prices. While global unrest increases the price of oil, and a lack of pipelines chokes supply, taxes make it worse.

In Vancouver, 75 cents per litre of the pump price is taxes, including two carbon taxes.

In 2015, there was no federal carbon tax. Now, it’s 11 cents per litre of gasoline. People pay the carbon tax on home heating and the carbon tax is also on diesel. That means we pay more for groceries and everything else delivered to us on a truck.

The feds try to explain away that reality by pointing to rebates, but the Parliamentary Budget Officer has concluded the carbon tax is a “net loss” for most families.

That analysis doesn’t include a second federal carbon tax embedded in fuel standards that’ll be in place by Christmas this year. It’s estimated to add 11 cents to the price of a litre of gas by 2030.

Within the next eight years, the two carbon taxes are going to cost about 50 cents per litre of gasoline.

Taxes are making life less affordable now, but Canadians should be worried about future affordability because today’s deficits are tomorrow’s taxes.

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When Texas prices hit $4500 per MWH that’s the equivalent of $450 to charge your Tesla.

Remember: This is 100% a policy failure. It’s easy to build a reliable, resilient grid using fossil fuels and nuclear. pic.twitter.com/0Mc5BX6CTk

— Alex Epstein (@AlexEpstein) May 14, 2022

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To keep the chemistry lesson as simple as possible, you need natural gas to produce ammonia and energy from fossil fuels to mine for phosphate. You need ammonia and phosphate to make fertilizer. You need fertilizer to grow food at scale. You need food to keep the peace.

As you might expect, the price of fertilizer – already under pressure from gyrations in the natural gas sector globally – skyrocketed higher on the news that China is halting all phosphate exports. Farmers will either raise prices dramatically or go broke. Inevitably, we’ll see an unhealthy mix of both.

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We're "likely" to get out money back claims a journalists with no experience running an economy:

Taxpayers will “likely” recover billions spent on the Trans Mountain Pipeline, says Finance Minister Chrystia Freeland. The less hopeful forecast follows cabinet assurances the pipeline would earn a profit: “The Canadian approach will be to ensure that we make a profit so that’s where we are on that.”

 

To wit:

A federal agency paid a pollster almost $47,000 to interview 49 people, records show. The topic was financial literacy. “Participants were asked how much time they typically spend in a month on their household’s finances including activities such as paying bills.”

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The federal government paid out over $171 million in bonuses to executives and public servants for 2019-2020, despite departments achieving less than half of their performance objectives overall that same year.