Debt load, measured by the ratio of total debt to disposable income was almost the same for Canadians and Americans at the beginning of the 1980s. After that, they parted ways: Americans had the greater debt load between 1983 and 1991 and Canadians between 1992 and 2000. From 2001, debt grew steadily in both countries and by 2002 had surpassed disposable income. By 2005, for each dollar of disposable income, Canadians owed $1.16 and Americans $1.24.
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The increase in mortgage debt during this period in Canada was largely due to baby boomers purchasing their first home. However, the increasing use of consumer credit since 1992 is likely due to a combination of factors, including stagnant incomes in the 1990s, easier credit in the early 2000s, and changing demographics and lifestyles. With Americans also experiencing stagnant incomes in the 1990s, their use of consumer credit rose between 1992 and 1996.
Remember though, how important consumer spending is to the economy:
Consumer spending is a key contributor to a country's economic health. Consumer spending as a percentage of GDP is much lower in Canada, ranging from 52.8% to 58.9% over the last 25 years, compared with 61.4% to 70.0% in the U.S. In other words, consumer spending has boosted the economy more in the U.S. than in Canada.
What this means, if you can clear away all the self-serving neo-liberal bullshit, is that this economic system fails, even when judged by its own standards.
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