Comment 64028

By A Smith (anonymous) | Posted May 26, 2011 at 13:48:16

Canada

2001

GDP - $1,076,577M
Debt (Fed) - $519,994M, 48.3%/GDP
Debt Charges (Fed) - $43,892M, 4.08%/GDP

2010

GDP - $1,652,548M
Debt - $519,097M, 31.4%/GDP
Debt Charges - $29,414M, 1.78%/GDP

From 1982-2000, debt charges (all levels of government) in Canada never dropped below 7% of GDP. During this time period, real GDP/capita averaged 2.017% per year. From 2000-08, as debt charges fell (due to our war on the deficit), real GDP/capita averaged only 1.35%.

If we went back to the same federal debt/GDP ratio we had in 2001, that would mean having to add another $279.1B in debt at current GDP levels. On a per capita basis, that works out to $8,136.55, or $4.277B for a city the size of Hamilton.

Even at that debt level (48.3% of GDP), because of the lower interest rate environment, federal debt charges would still only be 2.74% of GDP, rather than the 4.08% we saw in 2001.

In other words, if the Feds are willing to add another 0.96% (of GDP) in interest charges to the annual federal government budget, we would have over $4 billion in new funds that we could spend as a city. According to the Spec...

http://www.thespec.com/news/local/article/319932--lrt-to-cost-city-130-million

the total cost of building the LRT line would be $800M.

There may be political reasons as to why the LRT doesn't get built, but access to cpaital is not one of them.

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