Ontario’s “debt crisis” is worse than anyone could imagine!!! … “total insolvency?”””

Posted: February 5, 2013 in Uncategorized

If Ontarians don’t really know or care about how deeply in debt this Province has become under the McGuinty “suck and spend” Government for the past 10 years then those who don’t should never ask “what went wrong?” when the proverbial “$#!t hits the fan”!

Hit the fan it will.

When the Province doles out 10 BILLION $ a year on just interest payments alone on it’s debt, there is no way in hell it will ever “balance the books” or write off the deficit in our lifetime!

Be certain that your children and their children’s futures will be mortgaged beyond reason by this massive “killing off of the economy” by a very decrepit gang of gerbils!

Intentional? Of course it was! McGuinty has embraced a fake Green Energy Scam to electrify our once stable grid using lies and false sales jobs concocted by a consortium of Green criminals who milk the Ontario tax payers and consumers out of billions of long term payments for a service that isn’t!

To call this anything but a “criminal enterprise” would  be too kind.

The only answer for anyone who wants to succeed with their future plans of life, job and secure retirement?………………MOVE OUT!

Worse than California

Jason Clemens and Niels Veldhuis, Special to Financial Post |Feb 4, 2013

Ontario faces crisis due to 78% jump in spending

‘I do not want Ontario to become like California,” Ontario Finance Minister Dwight Duncan once proclaimed. And it’s not hard to understand why — California is a fiscal nightmare. It has the lowest bond rating in the United States and its own treasurer, Bill Lockyer, referred to the state budget as “a fiscal train wreck.”

Yet, despite all that is said about California’s finances in the media and financial markets, Ontario is in much worse shape.

Back in 2002-03, the fiscal year before the governing Liberals took office, Ontario’s net debt (assets minus liabilities) stood at $132.6-billion. In the ensuing decade, the province’s debt ballooned by almost 78% to $235.6-billion (2011-12). Most worrying, however, is that if Ontario continues on its current path (status quo in terms of spending and revenues), its debt will balloon to over $550-billion (66% of GDP) by the end of the decade (2019-20).

As the nearby table highlights, Ontario is decidedly worse than California on every measure of debt. For example, despite the fact that California’s population and economy are almost three times that of Ontario, Ontario’s total debt is 64.4% larger than ­California.

On a per-person basis, Ontario’s bonded debt (the concept of net debt is not used in U.S. public accounting) currently stands at nearly $18,000, over four-and-a-half times that of Californiaat $3,800. As a share of the economy, Ontario’s debt (38.6%) is more than five times that of the Golden State (7.7% of GDP). This is a stunning difference in the burden of debt, particularly given the attention and concern focused on California compared with Ontario.

While the two jurisdictions face similar average interest rates for their debt, the large difference in the stock of the debt means equally large differences in interest costs. Specifically, Ontario spends almost double what California does on interest costs in dollar terms and a little over three times what California spends as a share of the revenues collected, 8.9% compared to 2.8% of revenues. This is money that could have been spent on health care, education, public safety.

Thankfully, the Liberal government of Ontario, which just selected a new leader, Kathleen Wynne, has a real opportunity to break with past policies and fundamentally deal with its skyrocketing public debt.

There are two principal barriers holding back genuine efforts at tackling the province’s fiscal problems. The first is a basic misunderstanding of the province’s deficits and debt. More specifically, there is a view that Ontario’s deficits and mounting debt are a result of a lack of revenues. The data here tell a very different story.

In 2002-03, Ontario collected $74.9-billion in revenues and spent $65.1-billion on programs. Some $9.7-billion was spent on interest costs, which resulted in a balanced budget.

Revenues grew to $104.1-billion in 2007-08 (prior to the recession) before decreasing in 2008-09 and 2009-10. This year (2012-13), revenues are expected to be $112.2-billion, some $8-billion higher than the pre-recession high. All told, revenues have grown by 49.8% since 2002-03.

The problem is that provincial program spending has increased by 77.8% from 2002-03 to 2012-13. Simply put, Ontario has had a spending problem over the last decade, not a revenue problem.

READ MORE HERE:

My visit to California

Victor Fedeli, Special to Financial Post | Feb 4, 2013

What Ontario might look like soon

After reading many articles on the dismal financial situations facing Ontario and California, I headed to California to see first hand what my province of Ontario might look like in the near future.

My wife Patty and I have many fond memories of our trips through California. You can imagine our surprise at the sight of garbage piling up along the highway between San Francisco and Stockton, which joined San Bernardino and Vallejo in declaring bankruptcy. This is the tip of the iceberg — many more cities are teetering on the edge.

Assigning blame for California’s problems depends on which side of the political spectrum you fall. The right points the finger at high public-sector wages and generous pensions and benefits. The left blames the bursting of the real estate bubble. What cannot be disputed is the fact that the cities in bankruptcy overspent. When assessments fell, revenues fell — and they couldn’t pay their bills.

According to Michael Lewis, in his gripping book Boomerang, Vallejo is the city to pity most. “The lobby of City Hall is completely empty. It’s just a collection of empty cubicles. Eighty per cent of the city’s budget — and the lion’s share of the claims that had thrown it into bankruptcy — were wrapped up in the pay and benefits.”

Now, the city manager runs the entire city of 116,000 with a staff of one. “When she goes out to the bathroom she has to lock the door.”

On our trip, we passed hundreds of wind turbines as we drove to the historic community of Sonora. This is in the heart of gold country, as it has been since the original gold rush of 1849. Today, thanks to expensive energy, the mines are closed and logging operations are silent. Museums were closed because of staffing cuts. The streets were empty. But what we did see was a lot of casinos!

Does this sound like Ontario? Mine processors here have closed — Xstrata Copper in Timmins shed 670 employees and moved to Quebec for cheaper power. We were the No. 1 mining jurisdiction in the world; today we’ve fallen to 13th. The forestry sector is devastated — there are 60 closed mills today. The Far North Act has banned logging and mining exploration from another 225,000 square kilometres of land.

As in California, wind turbines are popping up in rural Ontario. But our turbine owners are offered some of the highest subsidies in the world. This has caused energy rates in Ontario to rise to the second highest in North America behind P.E.I.

READ MORE HERE:

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