During the Great Recession, consumer debt in Canada soared. Governments of the world have learned nothing; the debt-driven fiscal policy remains in place, generating privatized profit off public misery.
This year, consumer debt in Canada hit a new height: 1.81 trillion. That is, One trillion. Eight hundred. And ten. Billion. Household debt is 170% - for every dollar in income, $1.70 is owed to creditors.
It’s obscene. Absurd. And crashing very soon.
In the rush to ever expand profits, credit companies are extending credit to people who simply cannot afford it. The Working Stiffs - Canada’s underpaid, overworked service workers - now recieve credit, result in boondoggles where they owe thousands while still barely making rent.
At a low 4.5% interest (mortgage rates rather than credit card rates), the monthly interest would be more than the payment so it could never be paid off unless you paid at least $1900/month for almost 100 years or, more realistically, over $2500/month for 30 years. If you’re spending a reasonable 20% of your after-tax pay on paying down debt, that would require after-tax salary of over $152,000 (a nominal salary around $230,000). So as long as every man, woman, and child makes at least $230,000/year and can be expected to do so for at least 30 years, it sounds sustainable. If not, there could be some problems in the future.