i've posted about this at length elsewhere, but, just to clarify, if i wasn't clear: the problem that canada faced with the imf in the 90s wasn't actually about debt. it was about interest rates. it's not that we "spent too much" - that doesn't mean anything - it's that we borrowed it from banks at 15-20% interest rates.

then, chretien inherits this ridiculous debt (that ballooned under mulroney, not trudeau). but, the debt was not spurred by spending in the 60s and early 70s, it was all interest accumulated in the late 70s and early 80s...

what this did was give investors leverage over the government, because we owed them their pound of flesh. so, they started thinking they could tell us what to do.

and, thankfully, our government at the time didn't fold. it restructured, and it sold off some assets (oil, planes) but it didn't touch the social fabric of the country. harper would have. i think trudeau will, too, if we get there.

the solution is not to cut spending. that doesn't matter. and, it has it's own negative consequences, too.

the solution is to ensure that interest rates stay low, so we don't build up this external debt. or, if we find ourselves unable to control the rates, to stop borrowing from private lenders.