I for one do not think the canadian banking system is inherently "stronger" than the american one. This is the system itself I am referring to - laws, regulations, best practices, etc. I am a retired banking industry veteran, and I can tell you from personal experience the biggest and most significant difference between our system and the americans' is in attitude. Canadian banks (as they should) approach their day with the mantra that safe and stable growth, with your risk covered as best you can, is the way to go. The american counterparts I dealt with had a subtly different take. Their attitudes were that they were playing a game and the goal was to grow the money as fast as possible, no holds barred and no risk too great. It felt at times like they were discussing monopoly money, not peoples' life savings. And we see the results of this attitude now. People lose everything and the banks get bailouts.
Canada has the world's soundest banking system
- Thread starter james t kirk
- Start date
Show me a link to a Canadian government site that backs up your numbers. Your numbers are out of date.mprex said:NO!!! You're comparing NET DEBT vs. GROSS DEBT. That's Apples vs. Oranges. You can only compare debt numbers if they are prepared using the same methodology.
It follows that national numbers can't be compared against each other, because each government uses slightly different methodologies. What's nice about the CIA "public debt" numbers is they are comparable between countries (as much as possible.) The numbers roughly represent GROSS DEBT, and is the latest available (2007 estimates.)
The CIA numbers aren't so because "Americans want to feel better" about their debt. Get real!!
If the CIA numbers hurt your national pride, then look at OECD's latest numbers: OECD Factbook 2008.
For the same FY 2006-2007 as your link it shows:
GOVERNMENT GROSS FINANCIAL LIABILITIES % GDP
Canada 68.1%
United States 61.9%
The OECD numbers corroborate the CIA 2007 estimates.
Add the USA Social Security Deficit while your at it.
http://www.socialsecurity.org/daily/03-24-03.html
Boom goes your numbers.
US Federal Debt is closing in on 10 trillion dollars. I believe their GDP is 14 trillion.
Canadaian Federal Debt is 430 billion and our GDP is 1.2 trillion.
USA = 10/14 (roughly)
Can = 430/1200
We are in far better shape than the US.
The above is US GROSS DEBTjames t kirk said:
The above is Canadian NET DEBT.james t kirk said:
Apparently you're so stupid to think you can compare NET vs. GROSS, across country methodologies no less.
I've already posted TWO sources with comparable country debt ratios (Factbook & OECD). Feel free to remain ignorant.
I wonder how the banking systems would rank after the equity positions purchased by various western countries.
Net Debt ? What the hell is that ?mprex said:
Usually it would mean assets minus liabilities. If you have a net debt instead of net assets you are insolvent. Not sure I've ever seen a balance sheet that shows assets for a country. How would they value things such as crown lands etc. So I'm pretty sure you are wrong about this net debt.
Red's explanation of it being debt including federal and provincial makes much more sense
First, using net debt makes a lot more sense as a lot of government debt is owed to other parts of Government (e.g. Both the CPP and American Social security funds own a lot of their countries national debt). Also, when Americans calculate their numbers, they don’t take into account the liabilities of the social security system as most other countries like Canada do. This greatly understates their indebtedness. The fact is that the OECD confirms that Canada is in a better position when it comes to net debt. I’ve posted the link to the OECD numbers a few times in the politics section. By all means do a search.mprex said:NO!!! You're comparing NET DEBT vs. GROSS DEBT. That's Apples vs. Oranges. You can only compare debt numbers if they are prepared using the same methodology.
It follows that national numbers can't be compared against each other, because each government uses slightly different methodologies. What's nice about the CIA "public debt" numbers is they are comparable between countries (as much as possible.) The numbers roughly represent GROSS DEBT, and is the latest available (2007 estimates.)
The CIA numbers aren't so because "Americans want to feel better" about their debt. Get real!!
If the CIA numbers hurt your national pride, then look at OECD's latest numbers: OECD Factbook 2008.
For the same FY 2006-2007 as your link it shows:
GOVERNMENT GROSS FINANCIAL LIABILITIES % GDP
Canada 68.1%
United States 61.9%
The OECD numbers corroborate the CIA 2007 estimates.
Of course, what is more important is the extent that debt is countered by private savings. Where the U.S. is really in trouble is that their private savings rate is really low so, their indebtedness is to the rest of the world. This is very different than many European nations who also have high levels of government debt but also have high private saving rates to counter it.
The correct term would be net financial debt. You subtract off government of Canada bonds, etc held by other government agencies. My numbers may be a bit out of date, but I recall that not so long ago 1/2 of U.S government debt was owed to other levels of government. Clearly counting money a government owes itself, does not make a lot of sense, so net debt numbers are a better indication of indebtedness.train said:
A couple of years ago, when the conservatives promised to bring net government debt down to 25% of GDP by some date I forget, the media criticised them for picking an “obscure” statistic. But it is a statistic that makes a lot more sense to pick than total financial debt.
NO!!!
Please guys if you don't know what you're talking about don't add to the confusion. A LITTLE KNOWLEDGE IS DANGEROUS!!
Government Gross Debt is CONSOLIDATED. Government debt held by other parts of the government represent both asset & liability and thus cancel each other out. You DON'T need net debt for a consolidated view.
Anyway, the main point is: you can't compare GROSS vs. NET.
Another point is, you can't compare country debt numbers computed using different methodologies (even gross vs. gross, or net vs. net.) In particular, almost every country compute NET debt very differently from each other. HENCE TYPICALLY NET DEBT COMPARISONS ACROSS COUNTRY BOUNDARIES ARE NOT VALID.
For GROSS debt, however, there is an international standard used as the common basis for computation, called the "System of National Accounts." Even this system has some inter-country variations, but not as wildly as NET debt.
Quote from OECD:
"There are two standard ways to measure the extent of
government debt – by reference to gross financial liabilities
or by reference to net financial liabilities – the latter being
measured as gross financial liabilities minus financial
assets. GROSS financial liabilities as a percentage of GDP is
the most commonly used government debt ratio."
(emphasis mine.)
You guys can compare GROSS vs NET or try to do inter-country NET calculations all you want, but all you're going to get are meaningless results. It just makes you guys look stupid.
Please guys if you don't know what you're talking about don't add to the confusion. A LITTLE KNOWLEDGE IS DANGEROUS!!
Government Gross Debt is CONSOLIDATED. Government debt held by other parts of the government represent both asset & liability and thus cancel each other out. You DON'T need net debt for a consolidated view.
Anyway, the main point is: you can't compare GROSS vs. NET.
Another point is, you can't compare country debt numbers computed using different methodologies (even gross vs. gross, or net vs. net.) In particular, almost every country compute NET debt very differently from each other. HENCE TYPICALLY NET DEBT COMPARISONS ACROSS COUNTRY BOUNDARIES ARE NOT VALID.
For GROSS debt, however, there is an international standard used as the common basis for computation, called the "System of National Accounts." Even this system has some inter-country variations, but not as wildly as NET debt.
Quote from OECD:
"There are two standard ways to measure the extent of
government debt – by reference to gross financial liabilities
or by reference to net financial liabilities – the latter being
measured as gross financial liabilities minus financial
assets. GROSS financial liabilities as a percentage of GDP is
the most commonly used government debt ratio."
(emphasis mine.)
You guys can compare GROSS vs NET or try to do inter-country NET calculations all you want, but all you're going to get are meaningless results. It just makes you guys look stupid.
Guy, you’re mistaken. There are just as many differences between gross debt (whether or not it is consolidated) as there is with respect to net debt. Indeed, that is where most of the differences come from. See:
As I tried to point out earlier (I admit that I was not as clear as I should have been, but I was writing while trying to do my own work), by counting social security revenues, without the corresponding liability of future payments, the U.S understates the actual size of their deficits and debt (usually defined as accumulated deficits). They should really kept the accounting separate. In fact the comparison is even worse when you consider that Canadian CPP deductions are at their study state levels (this means that they should cover future liabilities based an standard life expectancy assumptions) will American contributions are far below steady state levels. Taking into account that difference, would add to their net debt.
For more up to date numbers, without as much explanation, seeFinance said:
This is all without even considering net financial debt. I.e. without looking at the financial assets of government. The difference in Canada's favour is greater when you do that, and that makes even more sense.Finance said:
As I tried to point out earlier (I admit that I was not as clear as I should have been, but I was writing while trying to do my own work), by counting social security revenues, without the corresponding liability of future payments, the U.S understates the actual size of their deficits and debt (usually defined as accumulated deficits). They should really kept the accounting separate. In fact the comparison is even worse when you consider that Canadian CPP deductions are at their study state levels (this means that they should cover future liabilities based an standard life expectancy assumptions) will American contributions are far below steady state levels. Taking into account that difference, would add to their net debt.
Ah, I see. I notice you keep calling people "stupid". Is that supposed to emphasize your arguement, or does that make you feel superior?mprex said:
Canadian National Debt (457 Billion) Link:
http://www.canadianeconomy.gc.ca/english/economy/
Since 2004, Canada has had the lowest ratio of total government net debt to GDP in the G7.
You mentioned the OECD.... well, here's what they say.....
The OECD projects that Canada’s net debt-to-GDP ratio will decline to 19.5 per cent in 2009, less than half of the projected average of 51.9 per cent for all G7 countries. According to these projections, Canada’s debt burden will have fallen over 50 percentage points from the peak in 1995, when it was the second highest in the G7.
In contrast, the debt burdens of all other G7 countries, except the United States and Italy, have increased since 1995. The average net debt-to-GDP ratio in the G7 is projected to continue to rise in 2008 and 2009.
Link to gov't site:
http://www.budget.gc.ca/2008/plan/ann1-eng.asp
You will note from the above link that it compares the net debt as percentage of GDP of all of the G7 countries and Canada is HALF of what the USA is. (See CHART A1.8 - Total Government Net Debt) As you say comparing Apples to Apples.
Here's some more interesting reading on how the Americans are hiding their debt....
http://finance.sympatico.msn.ca/Investing/Insight/Article.aspx?cp-documentid=5750084
