Regarding the chart of countries debt expressed as a total percentage of GDP, it seems that virtually all countries on earth are in debt. This is very confusing. If we take all the countries in the world together, and allow them to both borrow from and lend to one another – mustn’t the totals balance? I mean for every billion, or even trillion dollars one country is in debt, shouldn’t there be a country who is owed that amount of money?

If this is not the case, then who in the world is this money owed to?

It almost appears as if there is some unknown entity which loans money to virtually all national governments. How could such an entity have come into existence? And where in the world does it get the money to lend in the first place?

[Aside to Garth - if you decide to answer this post on your blog, you might just use the above section, I’ll include the rest in case you can answer my other questions as well.]

What is the history of government debt amongst various countries? Which country was the first to go into debt? Who lent them the money? When did all this begin? Has there historically ever been a country that functioned for any length of time debt free? Why can’t any country simply stick to a budget and function debt-free?

Regarding the morality or legality of government debt, how can a government even incur a debt? Isn’t borrowing money a contract? Doesn’t a contract require the consent of both parties? How can a government give consent to a loan that will be repaid by people who aren’t even born yet? Those people didn’t vote for the government or give their consent in any way.

Even if we imagine that the government of the day rules by the consent of the governed (an increasingly questionable premise), and their authority to incur debt is somehow legitimate, wouldn’t the conditions of the loan have to be such that it’s repayment schedule was completed by the end of that particular government’s term in office? Four years in the States, and up to five in Canada?

What possible moral justification could there be for a government incurring a debt, during their rule, which is to be repaid during another’s rule, by citizens other than those who elected said government?

It seems that any loan a government takes on in the name of it’s citizens which is not structured to be paid back entirely within that government’s time in power – is not legitimate.

No government has the right to apply for such a loan. No lending institution should ever make such a loan. Such a loan is not a contract – since both parties did not consent to it. The citizens of subsequent governments of that country need not feel any obligation to repay illegitimate, illegal, non-contractual loans taken in the name of a government which they never lived under.

Can I get a bank loan which requires my children and grandchildren to finish paying it off? What would happen if they decided not to pay up? How is this situation any different from government incurred debt?

Could it be that we simply have no moral nor legal reason to pay?

http://marketdepth.typepad.com/marketdepth/2009/11/so-shall-we-reap.html

My sister in law made a similar comment when her Dad died, she said she got all the money tax free because he transferred it to her name a bit before he died, not realizing that her Dad NEVER had it in an RSP so didn’t have to give half if to the government when he died.

btw when we left Canada in 99 one of my Wife’s last pays was a bonus of 2000 dollars, and over half of it (54% to be exact) went to taxes ouch!

Don’t worry about that on ramp. The brilliant Vancouver City Planners think that taking the loops off the North End of the Granville Bridge (that take traffic to and from Pacific) and building condos on that land is a better use of the land – and our “green” Councillors agree. Next it will be the ramps. Of course no one bothered to ask the 10,000 car drivers who actually use those loops what they thought of the idea. Or the taxpayers who paid for that bridge and land, and will now have to pay for new City Streets to be built to redirect traffic through, creating even more gridlock in the downtown core.

Now Councillor Geoff Meggs has asked staff to look at taking out the Georgia and Dunsmuir viaducts as well – (no doubt to sell the land off for even more “waterfront” condos), which the planners will of course recommend as “a better use of the land”. And Council will agree because they don’t care about the cost to the taxpayers – just the profit to the developers.

I am so glad I don’t live downtown. I wonder how all those people plan on getting out of there if there’s an earthquake when all the bridges are gone.

Oh, yeah, that’s right – they can walk or bike a few miles to the nearest hospital that our politicians want to build on the False Creek flats – if it doesn’t sink into the swamp underneath it first.

After all, the old St. Paul’s Hospital is on a high point of land (a smart move by early City builders) but now that same land could be sold off for more luxury “view” condos! Just like they sold the land across the Street that used to have King George High and Dawson Schools on it – now the “Wall Centre”. The kids who now live downtown have to be driven elsewhere to go to school (more vehicle traffic). Oh so green it is!

Does any other City in this country have the same kind of overspending brain-dead City Council members and idiotic planners that Vancouver has, who think that building condos on every piece of public land is more important than public safety and livability?

Why does it appear to so many of us that the only green those people are interested in is the green from the developers who’ve lined their pockets?

“Greater Fools”

I didn’t say income earned internationally is not taxable.

I said “I don’t pay income taxes”.

Think – Deductions. Think – Non Resident.

OR Don’t think !…… Just keep on paying !!

AM, thanks for the that perspective. May I submit that you can walk into a top private hospital, get looked at in less than 10 mins and likely walk out for less than $20 CAD if you have no formal medical plan. Any medicines will cost you likely 70-90% less including dispensing fees.

Jeff, this is the return on your company contribution pension plan. 10% contribution, match by company 10% making 7% compound interest, tax exempt going in and tax free on divedend coming out.

Yes, beaches, many in SE Asia (all within 2 hour flight) and if you fly Air Asia, look forward to paying around $50 – $100 CAD return.