Georgetown Herald (Georgetown, ON), March 7, 1990, p. 17

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THE HERALD Wednesday March Page WhO does Canada OWe Dandy new duds Jim Tramble lives in and he wrote me a letter last week Part of my job of course is answering letters trying to be a conduit for information between the feds and the people I came to sit down and answer Jim when the to me that his questions might be shared by other people So here is what he had to say and how I respond Not surprisingly I am concern about the astronomical figures quoted by Finance Minister Wilson when he described the extent of Canada debt during the recent budget debate Tramble writes It would be helpful to me if you could provide in simple terms general answers to the following questions To whom is Canada s debt owed Has the government borrowed large sums from off shore in vestors like Japan or West Ger many Have any of those lenders in they plan to call the loans Should there be foreclosures what collateral has been put up for those loans Could these lenders take possession of Canadian assets like crown corporations What is the extent of Canada s line of credit Who profits from the interest Canada pays on its Is most of it paid to off shore lenders or to Canadians who for example pur chased Canada Savings Bonds Good questions Right now our country owes about billion a billion is a thousand million and this year will add another billion to it Ma n Street South Downtown Georgetown 8731470 The goal is to stop having the debt grow and this should be done by 1994 About 80 per cent of the in crease in debt since 1984 is due to interest on existing debt this year interest payments alone will be billion But Jim asks who do we owe that staggering amount to About a quarter is owed to off shore investors la gely Japanese and Americans The Japanese alone for example hold about 40 billion worth of the debt That debt is largely in the form of long term Government of Canada bonds or short term Treasury bills which are issued by the Bank of Canada Why would the foreigners invest our securities Well it not because of the geography or even Mitsou although this would be understandable It s because we pay competitive interest In fact one reason rates in Canada are so high because we desperately need to attract new money to finance our debt Now somebody with a bond or a Tbill can dump it at any time or redeem that security when it matures You can be sure that would happen if interest rates in Canada took a sudden nosedive And when bondholders redeem those bonds the feds have to find the money to pay out Obviously we don t want billion of Japanese bonds cashed in just now The behind those loans is simply faith in Canada the economy the government and in political stability Right now our credit rating is high but last week it came under review by one of the big bond holding services because of the size of the debt If our credit rating slips it will cost us more to borrow money Could foreign lenders end up owning crown corps No Not at least while we can still borrow money from other sources And as for our national line of credit there is no limit But if we borrow endlessly and the debt rises then investors at home and abroad will start thinking twice about how risky a Canadian investment might be Well the rest of the national debt elarourts For All Your Fine China Silver Crystal MAIN ST MILTON TINTS- SAVE ACRYLIC NAILS EAR PIERCING MAKEUP APPLICATION CoI Today for Your Appointment 235 GUELPH ST BESIDE BURGER KING scissors 7 tenure mi i en SEHVICE THAT GO TO TOUR the bulk of it is owed within Canada But don think that good news This money is owed to people and institutions which purchased sav ings bonds and Treasury bills Most of those investors are upper income Canadians That means the billion in terest this year will come from tax payers most of whom do not have money market investments and end up largely in the bank accounts of the rich This is lousy social policy ing a deficit and paying interest like that ensures that the rich will get richer and the poor will not It is wrong and no caring society should allow this massive transfer of wealth to take place That s why I can understand how my Liberal or New Democrat opponents sup port running a deficit Not only does this endanger our ability to fund social programs but it widens the gulf between haves and havenots I guess in the end run it s just more partisan politics No wonder people are cynics Thanks Jim for the letter I hope it stirs more questions all of us WITH the HERALD Your copy is available at many of our conveniently located dealers as GEORGETOWN GENERAL STORE Downtown Georgetown UP YOUR FREE COPY OF THE HERALD TODAY By BETTY SOJKA Ballinafad Correspondent The Ballinafad Ladies Jirn Dan dies baseball team got together this past Sunday to choose new uniforms The current uniforms the ladies are using are starting to show their four year age of rough and tumble and sliding into bases The ladies had to decide whether to change the team colors frpm the present grey and maroon The ladies talked about fundraising possibilities for the Ballinafad ball park which Included a mixed three pitch tournament in early June The Jim Dandies have made a pet project of raising funds for the ball park The ball park recreation com has held their first meeting A budget was set up for the year as well as a booking person was established The hall board is cur rently revising a booking form be ing used for the community centre to include the bail park The ball park committee will be in vesttgating possibilities of maintenance playground equip ment and scheduling park use Jim Bailey is requesting that anyone interested in setting up a children ball team call him at The baseball diamond is hoped to be used by many Donna attended the hall board meeting Thursday March 1 to give board members an update on the fire aid What is be ing looked at by both Erin Township and Hills is building an underground water reservoir Water is the most un portant factor as there is not a ficlent supply in the village Another concern is that homes are not easily idertifiable In the new subdivisions a number for each home will have to be established A good tip given by Mrs was to make something about your home distinctive from your neighbors eg pink mail box or namental well on your front lawn She also mentioned that after call the fire department to report the fire park your car on the road out of your laneway and have the four way flashers going Hall board members found her most in formative Jim Bailey also attend ed the meeting to give an update on the ball park committee and pro vided members with a copy of the budget for 1990 The hall board is to review the budget before submit ting it to Erin Township The program Putting Your Best Foot Forward saw the children learning telephone man as well as how to properly set the table The group will be going to Georgetown and the Bennett Centre for the next meeting The Women Institute will meet next at Mrs Grace McEnerys on Wednesday March RECYCLING It vorks pari Please Remember to Recycle This Newspaper A new spirit of giving MYGENEYTION Fash For The Young At Heart 115 MAIN ST GEORGETOWN Across am Church Clothing Mens Ladies Childrens ALTERATIONS J REPAIRS SOLID MAPLE 7 PIECE DINING ROOM SUITE nadeau rfi If I -v- Campbell House Gallery MAIN ST GEORGETOWN yg I

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