🚀 go-pugleaf

Darren Downs wrote:
> 
> There are several misconceptions going on here in this thread.
> 
> 1.) Debt payments are not part of the budget that is "Balanced". It is
> part of a debt repayment schedule which has nothing to do with operating
> budget.

No, for government purposes, any debt service charges are part of what
is generally considered the budget.  We have had a surplus OPERATING
budget for quite a few years, but only this year has the government
balanced the total budget, including debt service charges.


> 2.) Budgets are not revenues mines expenses, they are planned revenues
> and planned expenses.  That's why they are called budget.  What actually
> happens is a variance.


Yeah, okay, technically you are right, but when we are speaking about
balanced budgets, we are generally referring to the government reaching
those targets.

 
> 3.) We could have a balanced budget and still have to borrow billions of
> dollars.  That is because the budget we are talking about is the current
> budget.

No, I am referring to the total budget, again including debt services. 
Refer to my comment above concerning operating budgets.  

> 4.) The budget does not count infrastructure expenditures which can be
> capitalized to the balance sheet and have a long term benefit to the
> province.

I have always believed that this is the way we should be calculating,
but is that the case with current accounting methods used by the
government?. We won't get into government fraud or sneaky accounting
methods that hide or transfer costs 'off the books'. 

> It is a common misconception that when the budget is balanced, the
> government does not have to borrow money.  And likewise, we could be
> running a deficit and we could also be paying down debt.
> 
If the total (as opposed to operating) budget is balanced, then by
definition, the total debt load will not increase.  The government could
be borrowing, but this would be in the form of refinancing of existing
debt, not increasing it.  The reverse system also applies.

> I could post all the accounting reasons but it may be pointless now.
> 
>  - - - - - - - - - -
> 
> The only thing that is more misunderstood than government finances is the
> concept of Deferred Income Tax on corporation balance sheets!
> 
> Darren Downs.