BONOKOSKI: Liberals’ favourite debt-to-GDP tool now totally useless

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Discussion posted by: IRWeasel

The Trudeau Liberals’ favourite counter-tool when increased debt had critics getting edgy was to use their debt-to-GDP ratio where a chugging-along economy could easily handle the added constraint. In his last budget, then finance minister Bill Morneau boasted he would be looking at maintaining an acceptable ratio of 31%. He lied. A quick reminder: A debt-to-GDP ratio of 60% is quite often noted as a wise limit for developed countries, a warning zone strongly suggesting that crossing this limit will threaten fiscal sustainability. Canada is now at 88.01%.