AIG vs. Canada – A Financial Comparison
So we have word today that the US Government is bailing out AIG to the tune of US$150 BILLION DOLLARS.
Our federal debt was C$457.6 billion at the end of 2007-08, or US$383.2 BILLION DOLLARS.
In other words, the US Government is bailing out AIG to the tune of 39% of our entire (much dreaded and until recently ominous) national debt!
AIG posted a third-quarter loss of US$24.47 billion. AIG now has a “budget deficit” that is well over double what Canada’s highest ever was (C$42 billion in 1993 – approximately C$10.5 billion per quarter).
So, somebody tell me: WHAT THE HELL IS GOING ON? These numbers are totally insane.
And to think, in 1993, I was terrified that Canada was on the brink of bankruptcy. Thanks to some pressures to balance the books, grow the economy and run surpluses, the debt-to-GDP ratio has gone down considerably.
In 1995-96, debt-to-GDP stood at 73.9%. In 2007-2008, it was 33.6%.
Nominally, our debt hasn’t changed a whole lot (it has come down a bit, but most of the change reflects our GDP growth). The federal debt stood at $457.6 billion at the end of 2007–08, down $105.2 billion from its peak of $562.9 billion in 1996–97.
Eleven years of surpluses, and all we get is a mere $105.2 billion – peanuts compared to what the US Government gives away to one financial company.
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David
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