Debt
Good and Bad
Good and Bad
How many Conservatives out there are going to claim that borrowing to buy a house or a car or land or small business start-up is BAD DEBT?
Not many I expect. These are borrowed monies for investment - they are different types of investment but they serve a purpose. The house or home is essential - as people without one know. Considering you must or should have one - what way do you go about it? On a middle income level do you wait until you have enough money to buy the house outright or do you borrow a significant portion to own versus rent a property?
What about a car? You use it for transportation for work and leisure and although it depreciates versus appreciates such as a house - you justify the expense to earn a living and also for the mobility.
People borrow for education - in hopes that the investment will pay in the future - and provide gainful employment opportunities as a professional or skilled labour. Now it might be difficult in this province if some policy decisions do not change and change quickly because we are losing all of our young graduates - and our tax dollars are used to invest in their future.
So let's look at the debt - unfunded pension liabilities are to put it bluntly - awful. They cause extreme hardship and cannot be expected to earn their way out of trouble - they are a burden. Having said that Frank was the Premier that spent most of the dollars contributed by civil servants including teachers and at the time not a word was uttered. Why?
Because that generation wanted 10-20% wage increases and needed to build infrastructure - at a time when the ability of the province to raise money from natural resources was practically nothing as we had a crap Upper Churchill Deal and very little return on our natural resources - they used the pension funds like taxes.
See few conservatives would say - we should not have built the roads - the schools - the hospitals - the arenas - the tourism facilities etc...Few Conservatives would probably agree to roll back those lucrative increases to the public sector during Frank's reign.
Now those bills of our past generations have to be paid and we are in a better position to pay them (at least for now) - so there should be a long-term plan to deal with the unfunded liability - as there should also be a long-term plan to build the economy and rebuild infrastructure. I do believe the pension plans are now corrected to ensure that proper levels of contributions are made by the employee and government as the employer. We cannot however deal with debt and debt alone if we are going to compete. Geez guys you are justifying the fibre-optic investment but not infrastructure like roads - ferries and such which are our investment to move goods and drive tourism.
The there is good debt - that debt which is indirect and as far as the bond rating agencies are concerned pays for itself. An example of this is Newfoundland and Labrador Hydro - NLH has debt and it is good debt - it is an investment and makes us money while ensuring a reliable generation and transmission of energy. That debt - while included in the overall debt of the province - because the utility is crown - is a self reliant debt. This does not harm us in credit ratings or anything else. It is a vehicle to make money from our energy resources (unless Danny shags that up by privatizing it) - this also helps to ease tax burden as the money it makes reduces the need to find that money through increased taxation.
The Liquor Corp makes money too - although the need for that to be public is not the same as a crown jewel that we run our natural resources through.
You see the AG will always say "reduce debt" but the reality is we can't govern on that principle alone. This is government not the private sector. Success is based on providing essential services and maximizing the benefit from our commonly owned natural resources.
But then the connies get to private prisons and presumably schools hospitals and other basic public services... Tell you what - our friends to the south have many privatized prisons - how are they doing???
Well read these items and I will post more of these examples in the future...
Privatizing Prisons
Out-of-State-Inmates
You see these Conservatives want everything private with maximum profit to the stock market and private companies - then they want no taxation - how do we pay for any of the essential social services such as education - health - and basic transportation infrastructure - or do you want all that privatized too?
Not many I expect. These are borrowed monies for investment - they are different types of investment but they serve a purpose. The house or home is essential - as people without one know. Considering you must or should have one - what way do you go about it? On a middle income level do you wait until you have enough money to buy the house outright or do you borrow a significant portion to own versus rent a property?
What about a car? You use it for transportation for work and leisure and although it depreciates versus appreciates such as a house - you justify the expense to earn a living and also for the mobility.
People borrow for education - in hopes that the investment will pay in the future - and provide gainful employment opportunities as a professional or skilled labour. Now it might be difficult in this province if some policy decisions do not change and change quickly because we are losing all of our young graduates - and our tax dollars are used to invest in their future.
So let's look at the debt - unfunded pension liabilities are to put it bluntly - awful. They cause extreme hardship and cannot be expected to earn their way out of trouble - they are a burden. Having said that Frank was the Premier that spent most of the dollars contributed by civil servants including teachers and at the time not a word was uttered. Why?
Because that generation wanted 10-20% wage increases and needed to build infrastructure - at a time when the ability of the province to raise money from natural resources was practically nothing as we had a crap Upper Churchill Deal and very little return on our natural resources - they used the pension funds like taxes.
See few conservatives would say - we should not have built the roads - the schools - the hospitals - the arenas - the tourism facilities etc...Few Conservatives would probably agree to roll back those lucrative increases to the public sector during Frank's reign.
Now those bills of our past generations have to be paid and we are in a better position to pay them (at least for now) - so there should be a long-term plan to deal with the unfunded liability - as there should also be a long-term plan to build the economy and rebuild infrastructure. I do believe the pension plans are now corrected to ensure that proper levels of contributions are made by the employee and government as the employer. We cannot however deal with debt and debt alone if we are going to compete. Geez guys you are justifying the fibre-optic investment but not infrastructure like roads - ferries and such which are our investment to move goods and drive tourism.
The there is good debt - that debt which is indirect and as far as the bond rating agencies are concerned pays for itself. An example of this is Newfoundland and Labrador Hydro - NLH has debt and it is good debt - it is an investment and makes us money while ensuring a reliable generation and transmission of energy. That debt - while included in the overall debt of the province - because the utility is crown - is a self reliant debt. This does not harm us in credit ratings or anything else. It is a vehicle to make money from our energy resources (unless Danny shags that up by privatizing it) - this also helps to ease tax burden as the money it makes reduces the need to find that money through increased taxation.
The Liquor Corp makes money too - although the need for that to be public is not the same as a crown jewel that we run our natural resources through.
You see the AG will always say "reduce debt" but the reality is we can't govern on that principle alone. This is government not the private sector. Success is based on providing essential services and maximizing the benefit from our commonly owned natural resources.
But then the connies get to private prisons and presumably schools hospitals and other basic public services... Tell you what - our friends to the south have many privatized prisons - how are they doing???
Well read these items and I will post more of these examples in the future...
Privatizing Prisons
Out-of-State-Inmates
You see these Conservatives want everything private with maximum profit to the stock market and private companies - then they want no taxation - how do we pay for any of the essential social services such as education - health - and basic transportation infrastructure - or do you want all that privatized too?
1 comment:
Couldn't you also use the analogy of Leasing a car to better leverage the little bit of money you have?
Keeping in mind like you explained any public Electrical development is exempt from federal taxation.
Especially when it comes to doing everything on our own. We just can't do everything on our own. We are $12,000,000,000.00 Billion dollars in the hole and it is costing us approximately $1,000,000,000.00 Billion annually to service that debt. Thats $23,000.00 per man woman and child. It is crippling.
So wouldn't it make more sence to utilize the little bit of money we do have to leverage as much private enterprise and federal funding as possible by providing seed money and investing in the infrastructure required to develop our economy ala Fibre optic deal.
As for the two new test Wind generating projects forgive me if I'm wrong but I believe there is a clause or several clauses in there allowing for the buy back of the projects at predetermined time or times?
IMO I think we should be looking at the year 2041 to buy alot of these types of Public private projects back because thats when the Upper Churchill money will start flowing back East. But in the mean time we need to attract private enterprise and capital investment if we are to stem the tide of outmigration which is a result of little to no investment from outside capital sources due to our high taxes and wanting to keep our "most scenic Ghettos in canada" status. People complain about out migration but when projects are proposed like the deep water port south of St John's, Mussel farms in front of cabins, Aquaculture, Mink farms in St John's the Scenic Ghetto preservation society complians and puts a halt to it.
That is to say if Canada/Ontario doesn't entice and support labrador intro separating from Newfoundland in the interim. Or if you townies continue to demand your pot holes be fixed while Labrador goes without and roads, dirt roads, and the limitations of diesel generation and a seasonal economy dependant upon the restrictive ferry system.
I say put a complete moratorium on all island road work until the TLH is completed.
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