Last night on Saturday Night Live (October 22, 2011) in a comedy skit someone commented there’s much more to the United States than war – like math. The only problem: The US is much better at war than math.The inconvenient truth that American individuals and families owe $2.4 Trillion and Canadian individuals and families owe $479 Billion in consumer debt supports the observation that the math don’t quite add up.
This brings up the biggest bed buffalo of all - that individuals and families have been spending more than they bring home. What else does the math tell us?Up until the credit crunch of 2007-08 conventional wisdom from the instant gratification culture informed consumers (as well as governments and corporations) that debt was good. For over 35 years everyone followed this advice. At first it was gradual. Consumers were told to pay off the credit card balances in 30 days to avoid interest charges. Later, consolidation loans and lines of credit came to the rescue of high credit card interest charges and high monthly payments.
Yes, ladies and gentlemen, we’re broke. The news is out. It’s not just the United States that can’t make ends meet. Canadian families are out of money, too.
The announcement came in the Vancouver Sun on October 19th 2011 when it was revealed that British Columbia fell behind the rest of the country in giving the age 25- 34 crowd an affordable lifestyle. According to a recent study by Paul Kershaw incomes dropped 6 percent since 1976 in British Columbia for this age group while real estate prices, to mention just one expense, increased by 149% for this same period.
The good news about the recent flurry of media coverage over the sinking middle class is the public revelation that our money problems and perpetual addiction to credit go way beyond just a handful of irresponsible debtors who couldn’t balance their cheque book. In fact, it isn’t addiction or some hidden personality trait that drives individuals and families into a lifetime struggle with money shortages and dependency upon credit. It’s a lack of real income, that is to say there isn’t enough income to support the real costs of raising a family.
For those of us from the 1960s, it is refreshing to see a new generation respond to the injustices of their era. We tend to forget the pain and suffering for many of the protesters who were unlawfully locked-up, beaten or killed like Dr. Martin Luther King Jr. in their 1960s marches for social justice, equality and fairness. Complacency and non-critical thinking are two overarching contributors to the grip that the instant gratification culture presently has over people and governments that worship, beyond anything else, wealth.
I love that television commercial where a suave elderly man walks towards the camera speaking in a calm dignified voice, "If you (congress) are planning on cutting medical or social security benefits remember we will be watching. There are 50 million of us."
Senior citizens are no longer a small minority that can easily be ignored. We have considerable power, as in political power. The economic side of things is a different story. We've been slip sliding down the slippery slope of indebtedness too.
In a 2009 study by Statistics Canada it was revealed that 34% of retired individuals aged 55 and over, whether single or in a couple, held mortgage or consumer debt. The median amount owed by these individuals was $19,000.
Guess what's happening today in Mexico? Could it be possible that there just might be an answer for the high cost of divorce? Or, just maybe, the answer for reducing the divorce rate is to give newlyweds a learner's permit. Give them two years to find out if they were really made for each other, and if it doesn't work out, let them walk away without having to get divorced.
Are you shaking your head yet? Well, CBC reported September 30th that Mexico is looking at giving people an exit strategy right up front - when they get married - so they can avoid the hassle and exorbitant cost of going back to court later. Legislators proposed a reform that let people decide the length of their commitment after a two year minimum period rather than going for a full lifetime together.
“Thanks to your help and guidance we no longer feel "trapped in debt"; we can see
light at the end of the tunnel and are looking forward to living our debt free
future.”
Deanne and Gordon
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Recently, Canada has seen an influx of large American companies. These "not-for-profit" operations have been investigated by American authorities. Read more...
