Few national economic issues have generated the same kind of concern as has the
federal debt problem of Canada. There is a pressing need for long-term policies
to lift Canada out of the national debt hole it is in. Eliminating the debt
will not only free up money being spent on interest and reduce taxes, but make
Canada a more feasible place for future generations to live and work.
Interest on the debt has eroded the government's ability to fund its own
operations and essential social services. Presently, thirty-five cents of every
tax dollar the federal government raises is used for interest payments alone on
the debt. Though there have been operating surpluses within the federal
government, they have been eaten up by the debt interest payments. Few people
understand the devastating effects of compound interest. The debt, at a
compound rate of 10%, doubles in seven years, quadruples in fourteen years, and
is eight times as much in twenty-one years. This creates great difficulty for
governments to slow the debt, much less eliminate it. Our federal debt grows
all by itself to the tune of approximately ninety million dollars every day.
This may seem hard to digest, but it is reality. The need for debt elimination
is vital if Canada wants to free up billions of dollars being spend on interest
payments. Two approaches may be taken to this. First, an increase in
government revenues through higher taxation may be considered. However, taxes
are already at a point where some people feel they are working merely to pay the
government, rather than support themselves. Second, a restraint on government
spending by means of cutbacks may be a path, possibly a difficult one, to the
road of eliminating our federal debt. Either way, it will be the young citizens
of Canada that will have to pay for previous government overspending. "Our
national debt, after all, is an internal debt, owed not only by the nation but
to the nation. If... [continues]
Cite This Essay
(1999, 10). The Debt: an Economic Catastrophe. StudyMode.com. Retrieved 10, 1999, from http://www.studymode.com/essays/Debt-Economic-Catastrophe-1259.html
"The Debt: an Economic Catastrophe" StudyMode.com. 10 1999. 10 1999 <http://www.studymode.com/essays/Debt-Economic-Catastrophe-1259.html>.
"The Debt: an Economic Catastrophe." StudyMode.com. 10, 1999. Accessed 10, 1999. http://www.studymode.com/essays/Debt-Economic-Catastrophe-1259.html.