A Canadian Summarizes America's Collapse: "Everyone Takes, Nobody Makes, Money Is Free, And Money Is Worthless"

Tyler Durden's picture

On this lackluster Boxing Day dominated by illiquid moves in every asset class, we thought a few succinct minutes spent comprehending the US and European government policies of social welfare and their outcomes was time well spent. Canadian MP Pierre Poilievre delivers a rather epic speech destroying the myths of US and European 'wealth' noting that "Once the US citizen is in debt, the US government encourages them to stay in debt," noting that "the US government encouraged millions of Americans to spend money they did not have on homes they could not afford using loans they could never repay and then gave them a tax incentive never to repay it." His message, delivered seamlessly, notes the inordinate rise in the cost of all this borrowing, adding that "through debt interest alone, soon the US taxpayer will be funding 100% of the Chinese Military complex." From Dependence to Debt to the Welfare State and back to Dependence, this presentation puts incredible context on the false hope so many believe in the US and Europe. Must watch.


"By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel."


"Through government spending the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation's extravagance becomes another nation's debt"


"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless."

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Azannoth's picture

That was a nice and inspiring speech too bad politicians(at least some of them) decide nothing(as they can be to some degree held accountable), the bankers decide everything.

Canada deserves it's recent economic "prosperity" almost exclusively to it's natural resources not it's conservative government.

post turtle saver's picture

One almost wonders what those natural resources are being traded for...

TraderMark's picture

Deport him for telling the truth like Piers from CNN.  Oh wait, he is in Canada.  Ok well then work with the Canadian govt to deport him from Canada.

Hunter S. Thompson's picture

Yeah and Canadians have been so economically responsible and it could never happen there. LOL!!! Housing always goes up, right Vancouver?

Pareto's picture

Totally correct Thompson.  Consumption debt has skyrocketed in Canada.  Our near ZIRP is destroying savings and dislocating capital as mispriced risk from the price fixing of interest rates has created an environment of moral hazard that will be difficult, if not impossible, to correct before too many people are on the wrong side of the boat......again.  We can surely thank Carney for berading Canadians to stop borrowing, stop spending, yet holding rates that encourages the exact opposite behaviour he arrogantly denounces.  Britain can have him.

There is no doubt that we have a housing bubble in Canada, but, it is tempered by strong, or, relatively strong financial regulations that, so far have limited exposure to and the effects of moral hazard.  We can also be thankful for a commodity boom that has induced a wealth effect and a migration of people from other parts of the world bringing with them, their skill sets, their innovation(s), and their initiative.  We may actually muddle through this if we don't join in on the race to the bottom of currency debasement ponzi seemingly occurring almost everywhere else.


Time will ultimately tell.

Bay of Pigs's picture

Bingo. Just keep borrowing. That's the ticket. 150% and growing. That's worse than Americans.

The Carney Housing and Consumer Debt Bubble are sure to pop. 


Pareto's picture

The irony Bay, is that, try telling Canadians that stat and they laugh at you and they say, "come on, its not that bad."  Every time I hear something like this that echoes "this time is different", or, "it can't happen here", I walk to the nearest bullion dealer and buy another round.  cheers.

unwashedmass's picture


sigh. again with the fannie mae crap.......that thing was moving at a snail's pace until blythe and her rocket scientists figured out how to light the neutron bomb of derivatives......jesus.....does this crowd get off scott free forever???????????????

Schmuck Raker's picture

I'll be posting a petition at the White House website to get this guy deported, STAT!

ebworthen's picture

Wait, he's from Canada and he's arguing against Government involvement and intervention?

Does not compute.

He has some good points but if Canada had to survive on it's own without drawing blood and nutrients from it's proximity to the U.S. they would be Greece or France or worse.

dogbreath's picture

The canada you speak  of was the canada that fought WW1 and WW2.   We would be alright. 

ebworthen's picture

Um...o.k., Canada and the U.K. would have been just fine without the U.S. in WWII and beyond.


(excuse me)

dogbreath's picture

I was speaking for the quality of the men that canada provided and the quality of their contribution.   Its -21C outside right now.  We are capable people. 

We all know who lost the war.

Diogenes's picture

There is a difference between a safety net and a hammock. As such things go, Canada has done a good job of protecting its citizens without bankrupting them. Canada may be in debt but not near as bad as most countries, thanks to a period of voluntary austerity and a pullback in government spending under Chretien in the nineties.

I would be interested in knowing what  Canada gets from the US. I know the US gets massive amounts of oil, lumber, and other natural resources from Canada and gets them cheap. Can you tell me what the US has ever given Canada?

fuu's picture

Acid rain, draft dodgers, and some Gramophone Awards.

ceilidh_trail's picture

A market for their goods. $$$$

Rearranging Deckchairs's picture

lots of hollywood productions employing canucks

r3phl0x's picture

Pax Americana, such as it is.

BlueStreet's picture

Money for nothing and your chicks for free. 

spartan117's picture

"Soon the US taxpayer will be funding 100% of the Chinese Military complex."

Unless the dollar doesn't buy even dog shit.

Karlus's picture

Using what GDP measure and what inflation number?


"Hi China, time for an interested payment? Let me create some ones and zeros for you....here you go."



When McD's is offering the $5 value meal, we wont care about interest.


thadoctrizin's picture

"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless."

-Shhhh... this type of out-loud thinking could really confuse the sheeple.

b_thunder's picture

you canucs keep pissing of Obama, he'll never approve Keystone pipeline, and you'll be forced to sell all your oil to the Yanks at reduced prices!

and by the way, YOUR central bank is run by ex-Goldmanite, and YOU pretty soon will be speaking Mandarin.   At lerast the area around Vancouver.


Diogenes's picture

He already didn't approve it, the Chinese stepped in and bought the oil instead, Carney has moved to England, and Vancouver has been a suburb of Hong Kong for 20 years.

Try to keep up.

Rustysilver's picture

Canadian speaks, everyone listens. Wow.

ekm's picture

Stevie will fire him. Stevie has moved too much to the left.

The man is born in Calgary but represents Ontario, close to Ottawa. 

This man has a lot of guts.


Azannoth's picture

.. as long as you don't take it too seriously ;)

Dollar Bill Hiccup's picture

No. But I'd like to take in seriously.

Dixie Rect's picture

But Brawndo has electrolytes.

Titus Flavius Caesar Vespasianus Augustus's picture

Apologies for going off thread, although I have a question that's not totally unrelated:   Does Social Security add to the US government debt, or not?

In reading comments in a story over at the times, I see the oft regurgitated idea that only mouth-breathing fascist nazis would think that social security payments are, at this point, in fact a net debit as to tax revenue.


My understanding is that it hinges on whether or not you view a treasury as an "asset" when ledgered as such on the SST's books.


I've had arguments with very smart, very liberal statist types who are convinced that the government can loan money to itself, spend the money loaned...  and it's still an "asset" even though, ultimately, unless the fed prints money to buy it, when those treasuries are cashed in, that cash comes from new taxes.


But Robert Reich {not to mention Krugman} are absolutely adamant that the SS Trust fund is solvent, at least for the next 20-25 years or so, even though its only assets, essentially, are treasuries.


so then - am I in fact wrong/stupid about SS adding to the debt, or are they? 





blunderdog's picture

Dollars are completely fungible, so it's not like there's a simple clear bright line between ONE budget item that "adds to debt" and some other that does not.

The idea behind the claim that SocSec doesn't add to debt is that FICA revenues exceed SocSec payouts. 

This was true for a long time, but I don't know the exact status today--it's probably currently revenue-negative because of the temporary FICA cut and the dismal economic conditions.  Obviously, the fewer folks on payrolls, and/or the less folks on payrolls EARN, the lower the revenue from FICA will be.

The thing is, it doesn't matter so much whether SocSec SPECIFICALLY is currently funded or not--everyone acknowledges that there are certain to be more retirees and recipients than employees paying FICA at some point, so it's just a question of exactly *when* gummit starts adding that expense to the debt.

For a long time, FICA generated more in revenue than was being paid out, so money that (in theory) could have been "saved" for future expenditures was just added to the general revenue fund and used to finance other government efforts, including things like wars and tax-cuts.  At that time, one could more plausibly make the case that "SocSec doesn't add to the debt."

hapless's picture

Treasury department estimated the Net Present Value of Social Insurance obligations and revenues for Sept. 30, 2011 at -$33.83trillion, versus -$30.86 trillion the previous year.


blunderdog's picture

Not that that's at all relevant to the question as asked, of course.  "Net present value" is a projection--it's not a meaningful figure that applies in this context.

"Social Security" refers to the money paid to folks past retirement age and their family members to maintain survival expenses.  "Social Insurance obligations" includes Medicare, which is largely unfunded. 

That's a major detail to try to gloss over.

hapless's picture

Then to answer your question of "*when* gummit starts adding that expense to the debt" - *NEVER* - provided that unfunded future government liabilities remain unaccounted for in the deficit as publicized.

However, projection or not, future liabilities that are not accounted for in current budget accounting eventually do catch up to a cash-strapped government.

Clinton was credited for balancing the budget in the 1990's in spite of an annual increase of unfunded SS liabilities of several hundred billion$ per year. Now those liabilities are hitting the cash statements while Clinton has safely out of the picture.

As you can see from the link, federal gov't added about 3trillion of unfunded liabilities in 2011 to its 1trillion cash deficit.  Any wager as to when the U.S. gov't will voluntarily go to full accrual accounting?

blunderdog's picture

   "*when* gummit starts adding that expense to the debt"

Well, it's all just rhetoric, but there's a way to understand that this is not an accounting issue.  It's a question of whether the SocSec payments are currently funded by the FICA revenue or not.  Medicare and other programs are ALREADY inadequately funded by a large margin.

My point is like this: say you have a minor extortion ring, and you rob Louie every week for your cigarette money, which is $10/week.  Your other victims may give you more or less money, but as long as Louie comes through with the $10/week, you can say "My cigarette expense is *funded* by Louie, so cigarette spending doesn't add to my debts."

If prices go up or Louie stops having $10/week you can steal, your cigarette expenditure has to come from elsewhere, so you'd then have to buy smokes "on credit," which would add to the debt.

Because of the fungibility thing, though, you're EFFECTIVELY correct--if the gummit spends more than it takes in, I don't see much point in worrying about whether it calls some taxes "dedicated" or not--I'm just describing the mechanics of how some folks could *claim* that SocSec doesn't currently add to the debt. 

As I see it, if gummit is adding to the debt, you're fully justified in blaming EVERY SINGLE GOVERNMENT EXPENDITURE for it.  So the pensions for retired Congressmen are "just as" responsible for an increasing Fed debt as foodstamps or kerosene for fighter/bombers.

Salon's picture

Mental accounting is the term for the cognitive error people use when they say social security doesnt add to the deficit.

Just wait until social security tries to unload all that government debt it owns.

What do you think selling more treasury bonds will do while we are selling other treasury bonds to fund record government deficits?

Think it through people!

Lets have obama present a one trillion dollar platinum coin to the Fed lol

blunderdog's picture

There's no need to sell any of those bonds--we don't sell our bonds NOW, so why bother with those? 

They'll just print the money, same as now. 

Salon's picture

Yep greenspan said he could guarantee a certain number of dollars at a future date or a certain value of the dollar, but not both.

Nominal fools the sheeple everytime.

Keep stacking, my friend.

hapless's picture

"But Robert Reich {not to mention Krugman} are absolutely adamant that the SS Trust fund is solvent"

They are economists, not accountants. So what the fuck do they know?

Agent P's picture

He's just pissed because the NHL isn't going to have a season and nobody in the US gives a shit.

moneyxpert's picture

Nicely said to sole super power


Super Broccoli's picture

does this guy realizes there'll be no place his great country's exports if US and EU goes bankrupt ?

Joe A's picture

China will be needing every natural resource it can find and lots of them can be found in Canada.

hapless's picture

I don't see in the clip where he says that US/EU bankruptcy would be a good thing.