Canadians' Indebtedness

When one considers the anemic levels of economic growth that we've been enduring for the past two-plus decades, one really gets a sense of the miserable failure of neo-liberalism when one also realizes how much of this growth was reliant on consumer spending that was itself based on rising levels of individuals' household debt.

Here's a link to the Certified General Accountants Association of Canada study, "Where Does the Money Go?" that has some interesting statistics:

• Canadians’ personal saving rate has been declining since the early 1980s dropping from its highest level of 20.2 per cent in 1982 to its lowest of 1.2 per cent in 2005.
• Household debt has been increasing annually by 4.7 per cent for the past 30 years outpacing gains in personal disposable income, assets and the GDP.
• Consumption rather than asset accumulation is the primary cause of rising debt.

The CGA offers some suggestions for the causes of this increased indebtedness, some plausible, some seemingly pointed to suggest that people get themselves the assistance of an accountant. The relative contribution of these individual factors isn't provided, but there's one in particular that I think should be investigated further:

• Slower pace of growth in personal income that leaves lesser funds after personal consumption

I think that has much more importance than government transfers and low interest rates. People are simply trying to maintain consumption patterns of the 1960s and 1970s, and this is impossible under the work and income regimes imposed by the geniuses of the Liberal and Conservative Party under the orders from the CCCE, and their "think-tanks."

Were Canadians to take the CGA's advice to heart and get their spending under control, the result for our consumer-based economy would be calamitous. Certainly we have to consume less, for the sake of the environment, but it has to be within the context of stability for income earners.