Posts Tagged ‘Deficit’

To My Daughter…

March 30th, 2009
Comments Off on To My Daughter…

It’s difficult to express how proud I am of you. You are a remarkable, pretty, smart and talented young woman. A number of years ago we started you on piano lessons. You decided it wasn’t for you and stopped, but a seed was clearly planted. A couple of years later you began piano again, impressively teaching yourself. As I sit and listen to you play music that is well beyond a difficulty level any reasonable person would expect, and playing it well, I am awed at what you have accomplished.

You are even more impressive as an artist, even though you are loathe to admit it. The award you will soon be awarded by the Hespeler Legion for your Remembrance Day poster will attest to your skill. There are times when you draw something and I am simply speechless. Your ability is stunning: your picture from two years ago, which your Principal kept in his office for the year, and later, a teacher requested to be allowed to keep it for her own home, proves that I speak not just as a parent with an uncritical eye.

You have never been athletic. Your first foray into sports was baseball when you were barely tall enough to hold the bat. You, and your then BFF were adorable to watch and I have rarely enjoyed baseball more. But you weren’t very good – you weren’t really expected to be – and by years end, you were too scared of the ball to have any hope of ever hitting it. It would be years before you lost that fear, and that is why I was so surprised three years ago to learn you were on the volleyball team. Your friends talked you into it, and although you never enjoyed it, you played with a smile. As you always do when your unsure, you listened to the coach, worked hard and took your task seriously. You were never the best player on the team, never got the game winning spike, but as a result of your tenacity and maturity, you never cost your team the game either.

Now you are looking for your first job, and as you look to start your work life, your latest act of generosity truly astounds. You see, you have given your mother and me $1,000, to do with as we please. My choice is to buy a laptop, and get this blog out of the basement, into the light of the kitchen. To be sure, you probably didn’t know you gave us this money, and your brother will share in the costs, but it is still overly generous.

In the next year your mother and I will receive three cheques, signed Dwight Duncan and Dalton McGuinty no doubt, from the Province of Ontario totalling $1,000. While on the surface, it may appear the above mention gentlemen are providing this windfall, let us not kid ourselves where the money is rally coming from. When Mr. Duncan announced this gift, he also announced a budget deficit of $56B over the next 7 years. This means that as I approach my mid-50’s and look to end my productive years, and you begin your career, the bill will come due for that $1,000. It will not be me who pays that bill, and it certainly won’t be Messrs. Duncan and McGuinty, but you.

Of course, in seven years it won’t be $1,000, it will be $1,400. Sometime in the next seven or so years, over the course of your education, somebody is going to teach you about “the magic of compounding,” and they will call it that. They will treat compounding as a good thing, that the pennies your bank gives you to freely use your money will one day turn into dollars, tens of dollars even. Here’s the lesson they won’t give: The Government of Ontario borrows $1,000, and sends it to your dad to buy a new laptop, all the better to blog with, my dear. When the government borrows money, it pays it back at a premium of $57.60 for that $1,000. If they borrow the money this year, and pay it back next year, they pay back $1,057.60. But the government has already said they won’t pay it back for at least seven years. Here’s the part that’s magic: in the second year they don’t pay an extra 57.60 on $1,000, they pay $60.92 on $1,057.60. This way the debt ” magically” grows to the  point where after seven years they are paying $80.00 interest on $1,400. By this magic method, it takes only fourteen years for that $1,000 to become $2,000.

However, you probably shouldn’t worry too much about the $2,000, we’ll just add it on to the $15,000 you already owe, which of course by the time they stop borrowing in seven years will be $21,000, plus any extra they have borrowed. That’s the problem with borrowing money: $1,000 here and $1,000 there and pretty soon your talking real money.

But don’t think about that now. Instead, understand how much I appreciate my new laptop, or your mother her new desk or… who am I kidding: how much we’ll all enjoy beer and popcorn night. The beer will be for me, and the popcorn for you, which is appropriate: as I relax and enjoy my new found money, your debt will be growing like popcorn in hot oil.

Dalton Dalton Dalton, Economic Fundamentalism, pimply minions of bureaucracy , , , , , , , ,