Humanities Grad Student Does National Fiscal Forecast: “It Ain’t Pretty” by neil
by Neil Balan
Statistics Canada recently released its 2005 annual National Balance Sheets and the numbers are certainly worth a look. Three notable figures:
1.) the average net worth of every Canadian citizen is hovering at $137, 000; this puts the national net worth somewhere around the 4.5 trillion dollar mark. whew: we’re fat cats, or at least a segment of the population tends to fatness and is maxing out on the chin ups to reach and exceed the “affluence” bar…
2.) this represents a $5600 dollar increase per citizen from 2004; overall, national net worth grew and expanded just over 5% and national wealth (non-financial assets) grew at a rate of 5.5%, which is down 0.1 from 5.6% from 2004…
3.) as per this study, each Canadian citizen has accumulated 1.08 of debt for every after-tax dollar of income…
I recall a recent interview with on CBC Radio with Addison Wiggin, contributor to The Daily Reckoning and co-author of Empire of Debt, a book-length condemnation of America’s overwhelming financial debt, in public, private, and personal contexts. Wiggin is generally critical of the “keep consumers spending” cultural mantra; it functions as the deferral device/band-aid fix for any and all problems in an economy and society that are overdrawn and overdeveloped, running on virtual fumes and ghostly traces.
Wiggin calculates that the U.S. is running a debt load of approximately 8 trillion dollars. Massive public debt has become the model for private citizens…Certainly we could extend the trajectory here and expound on how and why the U.S. carries such a massive debt, requiring the order of 563 billion dollars for its military budget this year alone. If the previous source is perhaps “too” partisan and problematic, the White House has the Department of Defense sitting at an “outlay” 463 billion dollars. But what’s a 100 billion in the face of 8 trill? 0.0125 %.
Wiggin went on to offer that Canada is doing relatively better but – like many (over)industrialized states that serve as flowing conduits for fluid multinationals and commodity markets – it ain’t sitting pretty.
Canada’s running federal surpluses in relation to the budget, which signifies fiscal responsibility; plus – and I love this – “[We’re] running good debt-to-GDP ratios”. But the stinger: Canadian federal debt (net) is hovering around the 530 billion dollar mark (523.6 billion in 2004). With about 32 million citizens, that puts us at approximately $16, 500 a head.
Further, this is simply federal debt. For an accumulation of federal, provincial, and municipal debt, The Stingy Investor is running a real-time debt clock. At this moment, we’re collectively running a debt of about 805 billion dollars, which works out to about $25, 200 bucks per person.
One more shot to the gut: toward the end of his discussion, Wiggin added that one ought to consider the 74 million credit cards currently in circulation in Canada and that the national savings rate in Canada is sitting at less than 1%…
Self-governing economy, right? Feed in proper inputs? Presto magic outputs. Capital rights these wrongs and the market will naturally – as the endlessly differentiating code of choice for most and many – diagnose, adjust, and rearticulate these tedious details. Debt, it seems, is simply and seamlessly embedded. To borrow from Kurt Vonnegut: “So it goes.”
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