The Dangerous Shortage of Government Bonds
Jim Stanford writes in The Progressive Economics Forum:
Here’s an interesting sidebar to the current hissy fit roiling financial markets: It has turned out that Canada’s public debt is now dangerously low.
We all know that where debt is concerned, private is good and public is bad. That’s why we cheer on consumers as they pump up their indebtedness to a record ratio (over 100%) of disposable income, and cheer on businesses when they borrow to invest in real capital and technology. But governments shuldn’t borrow to invest, because that is “unfair to future generations” and would create risk and uncertainty in financial markets. To fund badly-needed and highly-productive public infrastructure, therefore, we play a silly fiscal shell game called P3’s — in which debt is transferred from low-cost public sources to high-cost (but out-of-sight) private sources.