Читать книгу Northern Light: Lessons for America from Canada's Fiscal Fix - Robert P. Murphy - Страница 10

In the mid-1990s Canada was in a full-scale fiscal crisis. The federal government had run substantial budget deficits consistently for 20 years; Ottawa’s indebtedness was reaching crisis levels; and a third of all federal government revenue was being used simply to pay interest on the debt. The status quo had become unsustainable. Without significant fiscal reform, Canada was at risk of hitting the “debt wall” – when investors stop financing government debt.

The federal government was caught in an unsustainable cycle: Higher interest costs were leading to higher deficits, which required more borrowing, which further increased interest costs as investors demanded higher returns to compensate them for the increased riskiness of lending to the Canadian government.