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Debt & Tax Clock
Slavery Clock
I started the debt clock some years ago and I still think it's a good reminder that the government shouldn't continue its spending spree. In the most recent update I added taxes with all figures projected forward to today based on 2007 Stats Canada numbers. Oh, and just to be clear, this clock measures the total of federal, provincial and municipal debt & tax.
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Debt, Government & Economic News
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| You thought you had an equity line | ||
| "Reeling from losses on their wretched loan decisions of recent years, lenders are preventing borrowers with pristine credit and significant equity in their homes from tapping into credit lines that they paid dearly to secure. In the last 30 days, lenders have sent several hundred thousand letters advising borrowers that their home equity lines of credit are frozen" [04/14/08], Debt | ||
| 10 ways to curb sleazy debt collectors | ||
| "It's tough conditions like these that tempt collectors to get rough with consumers. Given that the debt-collection industry has trouble restraining itself during good times, you can imagine how bad this could get." [03/24/08], Debt | ||
| The Fed can't fix home prices | ||
| "Where are the speculators, vultures and hedge funds? Where are the big money players willing to buy the exotic but still substantial mortgage-backed securities for which markets have ceased? The Fed's liquidity rush seems only to have convinced them the time is ripe for staying on the sidelines. To get to a real solution, speculators and investors need to believe that home prices are hitting bottom, that any mortgage debt they might buy today for 80 cents on the dollar today won't be worth 30 cents tomorrow. Then the vultures will pile in: The transfer of wealth from the overleveraged banks and hedge funds to those who kept cash handy will be shocking, ugly and cathartic -- but it will also be relatively quick. Credit markets will begin to function again. The economy will grow." [03/12/08], Government | ||
| Canada's total government fiscal performance | ||
| "To enable international comparisons, the OECD publishes National Accounts data for the total government sector. For Canada, the figures include the federal, provincial-territorial and local government sectors, as well as the Canada Pension Plan and the Qu bec Pension Plan. Based on OECD data, Canada's fiscal position is stronger than that of the other G7 countries (United States, United Kingdom, France, Germany, Japan and Italy). *The OECD expects Canada to record the largest budgetary surplus as a share of GDP in the G7 in 2007, 2008 and 2009. *It projects that Canada's total government net debt-to-GDP ratio, which has been the lowest in the G7 since 2004, will continue to decline in future years. *Canada is on track to eliminate its total government net debt by 2021. By doing so, it will be able to count itself among the few OECD countries that are in a net asset position." [02/28/08], Government | ||
| Advice gets interesting | ||
| "In the United States, with its plethora of tax-assisted vehicles, from 401 (k) to Individual Retirement Accounts to Roth IRAs, the calculation of where to put what asset to get the best after-tax yield has elicited some debate and a lot of actuarially inclined mathematics. Now it comes to Canada. A few years ago, when the capital gains inclusion rate was reduced the question became pointed: Why put assets that would yield capital gains in an account whose withdrawals would be taxed as interest? Still, it was a two-option universe, subject to asset allocation decisions: bonds inside and stocks outside. TFSAs change that simple calculation. Why not put interest and dividend-paying assets in the TFSA? There's no tax on withdrawals. What about stocks? As with an RSP, there's no potential for deducting capital losses. So the emphasis will be on finding steady performers with low volatility. This is where advice gets interesting is in determining the balance and types assets among all three accounts: open, registered and tax-free." [02/27/08], Government | ||
| Canadian budget in brief | ||
| "Maintaining strong fiscal management and continuing to reduce debt. Planned debt reduction for 2007.08 is $10.2 billion, and a total of $13.8 billion over the budget-planning period (2007.08 to 2009.10)." [02/27/08], Government | ||
| Don't rerun that '70s show | ||
| "Will the next president be the second coming of Jimmy Carter? Given Thursday's economic headlines, full of dire warnings about the return of 1970s-style stagflation, you might think so. Realistically, though, the parallels between the problems facing the U.S. economy now and those of the late-1970s aren't that strong. That's the good news. The bad news is that the economy probably will look similar to, but worse than, the economy that undid the first President Bush. And it's all too easy to see how the next president could suffer a political fate resembling that of both the elder Mr. Bush and Mr. Carter." [02/22/08], Economy | ||
| California exodus turns to stampede | ||
| "Based on data from moving companies, California had the second-highest domestic population out-flow of any state in 2005, according to the report, "despite the beautiful weather, beaches, and mountains." The bad news for California is that it faces a $14 billion deficit this year, despite boasting one of the highest tax burdens in the nation. The report, published by the American Legislative Exchange Council shows jobs are not just leaving the country - they are moving from state to state, with the population following. "States are in direct competition with each other for human capital and business investment. State governments that think they can attract jobs and people, and grow their economies, by taxing their citizens at a higher rate than their neighbors are sadly mistaken," said Democratic Arkansas state Sen. Steve Faris, ALEC's 2008 national chairman." [02/22/08], Government | ||
| Rich states poor states | ||
| "State Winners and Losers, details the migration of thousands of Americans from areas with high tax burdens to places where they can experience greater economic freedom. States with a high propensity to tax and spend are fi nding their most wealthy and productive citizens moving across borders into areas that impose less of a financial burden." [02/22/08], Government | ||
| Why your wallet feels thinner | ||
| "The U.S. Federal Reserve has been slashing interest rates to stave off a recession. One potential risk to that strategy: inflation. The bad news is that prices for many everyday items had already been ticking up, according to data from December 2004 and December 2007 collected by the U.S. Department of Labor. During that period, the Consumer Price Index, which measures the average change in prices over time for a basket of consumer goods and services, grew at a 3% annualized clip. But prices for many everyday items are rising even faster--and that's making everyone's wallet feel a little thinner." [02/17/08], Economy | ||
| A low, low interest rate of 396 percent | ||
| "A payday loan is a small-dollar, short-term loan with fees that can add up to interest rates of almost 400 percent. They're generally taken out when the borrower is caught short on cash and promises to pay the balance back next payday. If it sounds like legal loan-sharking, it's not. "Loan sharks are actually cheaper," said Bill Faith, a leader of the Ohio Coalition for Responsible Lending. The industry portrays it as emergency cash, but critics say the business model depends on repeat borrowing where the original loans are rolled over again and again." [12/14/07], Debt | ||
| Bush's bad mortgage medicine | ||
| "The Bush Administration's plan to rescue the housing market and keep the economy from slipping into recession took flak yesterday for freezing interest rate hikes for a mere fraction of subprime, adjustable-rate borrowers. But there's a bigger risk: It could deepen and lengthen the credit crisis." [12/07/07], Government | ||
| Borrowers face dubious charges | ||
| "As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures." [11/06/07], Debt | ||
| Prisoners of debt | ||
| "In a financial version of Night of the Living Dead, debts forgiven by bankruptcy courts are springing back to life to haunt consumers. Fueling these miniature horror stories is an unlikely market in which seemingly extinguished debts are avidly bought and sold." [11/01/07], Debt | ||
| Why hard work doesn't pay | ||
| "If you look at the averages, the statistics give a simple message: Hard work does not equate to economic progress. It hasn't for decades. We may need hard work to keep body and soul together -- not to mention pay the Visa bill -- but average-worker paychecks clearly show that inflation continues to trump wage gains for most American workers." [09/29/07], Economy | ||
| Confessions of a credit-card pusher | ||
| "Politicians and college administrators are growing increasingly concerned about the damage that credit-card debt is causing students, and they're trying to crack down on some of the card companies' practices. They're limiting marketing on some campuses and trying to restrict the size of credit lines extended to students. Earlier this year, the state legislatures in Texas, Oklahoma, and New York moved to clamp down on credit-card marketing to college students" [09/05/07], Debt | ||
| The history of labor day | ||
| "Most of the world marks Labor Day on May 1 with parades and rallies. Americans celebrate it in early September, by heading to the beach or firing up the grill. Why the discrepancy? Here's a hint: The answer would have been a great disappointment to Frederick Engels." [09/03/07], Government |
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A Dan Hallett and Associates Inc. publication. Norm Rothery, Ph.D., CFA, is the Chief Investment Strategist at Dan Hallett and Associates Inc. (DH&A) and the founder of StingyInvestor.com. DH&A is registered as Investment Counsel in the province of Ontario. Norm, DH&A, or related-parties may have an interest in the securities mentioned. More...