Thursday, August 24, 2006

Paying off the National Debt

In the last 10 years, we've paid off $50 billion of a $550 billion national debt. Considerable progress, but at this rate it will be another 100 years. But we have two factors on our side. First, our economy is growing. Second, inflation makes the national debt seem smaller. So if we take the $5 billion a year we are currently plunking down on the debt, index that payment to inflation and also increase the payment by the percentage of growth in the economy, within 20 years we could have most of the debt paid off. Unfortunately most politicans are lawyers, rather than mathematicians or economists. And unfortunately election years cause politicans to do goofy things like promising to spend all our cash instead of putting us on a good financial footing.

And in the interests of fairness for those who think I have a mild bias against the Liberal Party of Canada, it was the Liberal Party with Paul Martin as Finance Minister who cut government spending, eliminated the deficit and started us on the road to debt repayment. Well done! Compared to the billions that they paid off on the national debt, the taxpayer money that found it's way into the Liberal Party's coffers and to Liberal friendly advertising firms, is a mere pitance of a couple hundred million.


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