Tuesday, July 26, 2011

Quebec's debt

Quebec's rapidly increasing debt is one of the reasons I helped co found the Quebec Freedom Network. ( By the way I urge you to join the RLQ.) legault and his CAQ are not interested in cutting the budget, but raising taxes. My friend Jasmin Guenette has a great piece in the Gazette on Quebec's rising debt.

Right now, a political game is being played in the United States over the raising of the federal government's debt ceiling.

It is unlikely that the U.S. will default on its debt obligations come Aug. 2. As has happened no less than 74 times since 1962, Congress will agree, once again, to raise the ceiling, which is already over $14 trillion. Democrats and Republicans alike have used this strategy to keep public spending much higher than revenues. In 10 years, the U.S. debt has grown by $7.9 trillion.

Of what conceivable use is a debt ceiling if it is raised every time it is reached and is about to play its constraining role?

But the U.S. is not alone in this paradoxical situation. Quebec has no debt ceiling, of course, but it did adopt, in 1996, a law requiring it to present balanced budgets. Since that time, the province's gross debt has nonetheless increased by $57 billion. This is because even when the government follows the letter of the law, it violates its spirit by building infrastructure financed directly with debt. Furthermore, it is ultimately responsible for the debts of public corporations and municipalities. Quebec's balanced-budget law therefore ironically does not prevent its debt from climbing higher and higher.


Jen said...

Hoq high is Quebec's debt Dr Roy?

I don't think that, most Quebecers or for that matter ROC know of Quebec's debt.

Jen said...

Sorry Dr Roy, I meant 'how' not hoq.

I Support Lord Black