GDP vs. National Debt

So I was recently having a discussion about our Nations debt. Being that I work in the finance sector, people seem to gravitate toward you for questions regarding all things money (even though I am a full time computer nerd)

So recently we were having a discussion around the gross national debt and what the number was. I t was very surprising to find that nobody new what it was, and more surprising still that we were so far off the number. What would you think it was .. take a guess before reading on and see how close you are. I think Canadians believe we are much stronger than we truly are in terms of our nations wealth.

Secondly, as most things in this nation ... i found it very difficult to dig up this information. I have been trying to search using google, search tools on government web pages, and other means for some time to find this data and others that we recently of interest to me (what the distribution curve of Canadian salaries was).

Anyhow, here is what I found ... very surprising to me

Going from $559B to $467B of debt in the last nine years, taken as a flat-line projection, means we could pay the debt off in 46 years if we kept up this pace on average. But you know that won't happen given the current economic climate.

Now I should be perfectly clear here: in all of the above, I am mixing some terms. I use the phrase "net debt" as most of us think of it: liabilities minus assets. However to be absolutely correct, I should be using the phrase "net federal accumulated deficit". What a mouthful. Here is the difference between the two, according to the Receiver General:

1. Accumulated Deficit: the difference between the Government’s total liabilities and its assets.
   
2. Net Debt: the difference between the Government’s total liabilities and its financial assets.
   That one word "financial" is important. Here is how: when considering "net debt", total liabilities are reduced only by financial assets, as non-financial assets cannot normally be converted to cash to pay off the debt without disrupting government operations.
   

So as a personal analogy, they wouldn't count my vehicle because if I sold it then I couldn't use it to get to work and earn money any more. It's a matter of choice really whether you count it or not in your list of assets. I've chosen to count it, but others I'm sure would argue against doing that.

We're talking about $523 Billion versus $467 Billion: either way, we still owe too much. And saying that our debt is minuscule compared to the United States with almost $10,000 Billion ($10 Trillion) in debt is no defense at all.