It's time to stop digging that government debt hole
Former Member of Parliament Ken Epp has posted an assessment of the debt hole our country is digging itself into.
When it comes to analyzing numbers, he’s former high school math teacher before serving at the Northern Alberta Institute of Technology from 1966 to 1993, most of it as Head of the Math Section. He was a Conservative MP for 15 years.
He ponders how many people are aware of the consequences of the debt hole that is being dug for us. The Federal debt is projected to reach $1,000,000,000,000 soon.
That's $1 trillion.
He did the calculation: To repay $1 trillion in 40 years, assuming the interest rate remains at around 4 per cent per annum, would require an annual payment of $50.5 billion per year.
“I don't think our present government has any intention of beginning a repayment plan, but if they started now, after 40 years, Canadian taxpayers will have paid $1.02 trillion in interest on top of paying the $1 trillion in principle. That's a total of $2.02 trillion,” says Epp.
He says there are about 18.4 million Canadians who actually pay taxes. On average, they will each get to pay $109,834 in their 40 years at the task. “And we have a leader who isn't worried about it because "budgets balance themselves," he adds.
Epp says Canadians are in deep, deep trouble. And, it is an unwarranted assumption that the interest rates will remain at 4 per cent for the next 40 years, he adds.
Most of us remember when the rates shot up to 18 per cent in the early 1980s. Should the rate go up just to 6 per cent, that would cost us an addition $638 million in interest.