Budget Québec 2016
- Thread starter Spaceman Spiff
- Start date
Xc0m
Legacy Member
can someone tell me what is the point of the generations fund? If it's to pay down the debt, just pay it down now. Why are we paying interest on old debt just to increase a fund dedicated to paying down the debt??
I'm sure the debt and interest we're paying this year has higher interest than we've seen these last few years. Couple that with inflation devaluing today's dollars, i have no idea why we have this fund.
I'm sure the debt and interest we're paying this year has higher interest than we've seen these last few years. Couple that with inflation devaluing today's dollars, i have no idea why we have this fund.
MrSpace
Legacy Member
The bet is that the invested money generates more revenue from investing than the interest costs.
So they can actually refund more later that way, when interest rates will be high.
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Also you can't just repay debt willy nilly when you feel like it even if you present value the remaining payments. The institutional investors that are holding this debt have the interest payments baked into their models. Also this allows them to hopefully payoff the principal for real instead of just issuing more debt to repay the principal of past debt that's come to maturity.
Xc0m
Legacy Member
Is there some place I can find how this fund is doing vs the rest of the market? I want to compare rate of inflation too. My trust in government investing money wisely is -273 celsius.
la caisse is managing it, doubt they make the returns public.