r/CanadaPolitics • u/LaserRunRaccoon New Democratic Party of Canada • 16h ago
Canada’s household debt figures conceal ‘pockets of acute stress,’ report says
https://www.theglobeandmail.com/investing/personal-finance/article-canadas-household-debt-figures-conceal-pockets-of-acute-stress-report/•
u/OutdoorRink Red Centrist 15h ago
To the young people on this forum, I will give you some glimmer of hope when saying that this exact same sentiment gets posted here every three months for the past 16 years, and nothing's really changed.
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u/LaserRunRaccoon New Democratic Party of Canada 15h ago
This isn't an opinion piece full of sentiments. It's reporting.
Something absolutely has changed - you and everyone else are 16 years older. What worked for you 3 months ago, 6 months ago, and 9 months ago, etc. isn't as effectively working for someone 3 months, 6 months, or 9 months, etc. younger than you.
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u/OutdoorRink Red Centrist 15h ago
My point is, it was the exact same reporting 16 years ago. And 15 years ago, and 14 years ago, and so on.
The sky isn't falling, folks. You'll be fine.
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u/LaserRunRaccoon New Democratic Party of Canada 14h ago
What you are describing is called a trend. The sky isn't falling. The walls are closing in and the sea is rising.
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u/OutdoorRink Red Centrist 14h ago
Is it, though? I'm not kidding when I told you my grandfather used that exact same talk track in the 1980s, and he's been dead since 1996. It didn't happen then, and I don't think it's happening today.
That said, shit has never been good. It can always be better. There's a ton of room for improvement.
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u/LaserRunRaccoon New Democratic Party of Canada 13h ago
It is, and in some cases I mean what I said literally.
History can be instructive, but it isn't prescriptive. The problems we face today are in many ways the product of 1980s-era solutions.
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u/cmplx17 14h ago
While I agree with your sentiment, something has definitely changed from the last 15 years.
Most of the debt is mortgages and house prices have been stagnant or down for the longest period now. With interest rates likely rising over foreseeable future, prices will probably come down further.
Carrying debt is okay when the asset you purchased with that debt is growing faster. Things go south when the asset depreciates.
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u/OutdoorRink Red Centrist 14h ago
Housing prices are absurd in Canada. Boomers getting rich on the backs of young Canadians. I've owned my house outright for over a decade, and it's increased in value 4x, but I fully support the housing market completely crashing. If it went back down to my original purchase price, I wouldn't be upset.
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u/preemsaltair 12h ago
This is why I think your assessment that is having this same issue for 16 years now isn't a sign not to worry. It was a very different economic environment. Decreasing interest rates, increasing asset prices. And prices still too high for average first-time buyer.
It's not the same situation so we can't rely on the past 16 years to know what will happen going forward.
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u/OutdoorRink Red Centrist 12h ago
But if we go back a little bit further, we can go to 20% interest rates and high housing prices for the time. I'm not saying that things aren't bad. I'm just saying that they've kind of always been shitty. It's not time to panic, but it's also not a time to be complacent.
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u/wet_suit_one Alberta 13h ago
A bit more wisdom from the oldies since I know it's appreciated: https://www.msn.com/en-ca/money/economy/charlie-munger-s-10-most-powerful-quotes-that-could-change-the-way-you-think-about-money-success-and-life/ar-AA2970X4?ocid=entnewsntp&pc=U531&cvid=6acf95aa3254485fb7bc0c09ecaa54b6&ei=54
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u/FreedomDreamer85 10h ago
And I believe he also talks about doing whatever you can you save your first $100,000. That was really good advice too
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u/wet_suit_one Alberta 9h ago
Well, not that I'm familiar with, but sure.
I'm sure Charlie Munger has said many things over the course of his life. I can't pretend to have heard of them all.
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u/wet_suit_one Alberta 16h ago
Young people would be well served by reading this: https://www.amazon.ca/The-Wealthy-Barber-Returns/dp/B00D825RLO/ref=pd_sbs_d_sccl_2_2/146-9607823-1589949?pd_rd_w=fdSbG&content-id=amzn1.sym.08276ec1-2986-446b-9279-cda4773ed07c&pf_rd_p=08276ec1-2986-446b-9279-cda4773ed07c&pf_rd_r=ER57KGSS1PZPMVVENRYQ&pd_rd_wg=AsDfD&pd_rd_r=ddd50ad5-c319-4979-bef6-cfee5f9cde44&pd_rd_i=B00D825RLO&psc=1#detailBullets_feature_div earlier in life than later.
Don't try and live a life you can't yet afford. It's not going to end well.
Take care of your own financial well being first. No one is going to save you and it's not the government's job to control your spending and borrowing.
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u/NocD Rhinoceros 15h ago
A good book if very simple but I'm not sure how much we should be individualizing a systemic unaffordability problem.
Your personal financial well being is very much impacted by government policy and it very often is their job to create an environment that's conducive towards better financial outcomes. Their failure to do so creates additional pressures that lead to the sort of household debt issues described in the article. I'm not sure how fair it is in a government created housing crisis to absolve that government from the consequences its economic policies created.
We like to individualize problems because it absolves us of the responsibility to solve them. If someone can't afford a house, it's a spending problem, see that famous avocado toast line. There's a balance of course, and living within your means is a great way to live a stress free life, but it's churlish to ignore the wider circumstances that make living within those means harder, especially when there's a generation divide making past strategies out of reach. Not saying you're doing that, but that is definitely how it's going to get read by some.
Of course I'm just describing Conservatism so I suspect it all boils down to an ideological belief around how well someone can shape their own outcomes.
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u/Neat-Air-8305 15h ago
I find it funny so many older liberal voters i meet sort of say it people fault they feel poorer and just lazy or to dumb to do well in canada these days
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u/CptCoatrack Libertarian Socialism 14h ago
It makes you wonder what rhey think housing affordability, food prices etc. means. Every time those numbers increase that's more Canadians priced out into poverty through outside forces. When unemployment rises and job numbers decrease do they just think that means Canadians are increasingly lazy?
If the past 10 years hasn't proven "meritocracy" to be complete bs nothing will. Unfortunately it's a really flattering and self-serving myth to propagate for those more fortunate than others
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u/NocD Rhinoceros 13h ago
It's interesting, I read an article once that was trying to make a point about I think British housing a few generations back and arguing that because of the relatively higher expense of eating out, coupled with the lower expense for housing, there might actually have been a time when you could just pull back slightly on some expenses and be able to afford a house as a result. Literally skipping that restaurant launch, easy as.
I'm not sure how compelling the evidence was but it does point to an interesting possibility that some of this advice might have been true 60 or so years ago and it just sort of sticks around.
But yes, I think for some people their entire world view is shaped at least partially by a fundamental ideological belief in fairness or meritocracy and you can't reshape that lens easily without undermining their own belief in the foundations of their success. If the greatest difference between you and the homeless person you occasionally pass in the streets isn't hard work and good decision making, well that makes the world scary and arbitrary doesn't it? Not to mention profoundly unfair in a way that would suggest a moral obligation to improve it.
I'm not sure anything that shape that other than experiencing how arbitrary and unfair the world can be. Maybe it's like those Conservative parents that are anti-LGBTQ until their son/daughter comes out and they suddenly develop empathy.
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u/wet_suit_one Alberta 13h ago
I agree that climate change is going to be a real pain in the butt in food supply. It's been obvious for years that this was one of the key threat of climate change. It's not gonna be fun watching this chicken come home to roost, but decisions were made and now we get to lie in the bed we've made.
FYI, it's never going to change for the rest of your life, or for several lifetimes, so govern yourself accordingly.
Good luck to us all. We're all gonna need it.
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u/wet_suit_one Alberta 13h ago
Pretty sure every individual is much more impacted by their own decision making than that of governments.
This is true up to a point though. If your government decides to drive the economy into the ground or engage in a catastrophic pointless war, well, yeah, that's kinda out of your hands.
But in the usual day to day, normal course of life, where the government doesn't colossally fack things up, yeah, your situation is mostly on you. Not 100% of course, but mostly.
The more you can do to help yourself and to avoid pitfalls and traps for the unwary, the better off you will be.
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u/Tjbergen 16h ago
Like, only eat twice a day? Take your boomer nonsense elsewhere.
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u/an_erudite_ferret 15h ago
Agreed. That wealthy barber author got rich selling easy answers, not by living an austere life.
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u/dismembermentplanfan 15h ago
It’s also a painful read, if mercifully quick to get through (I’ve never been a fan of those “give advice by telling an atrociously written story” books and there are many). There are better and more modern recommendations, I think the personal finance Canada subreddit used to have a list.
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u/CptCoatrack Libertarian Socialism 14h ago edited 14h ago
Describes most of these self-help and financial guru's. People who became successful by selling books on how to be successful. If they were honest they'd advise you to also write a book. Or be one of those people who sell expensive courses on how to make money...
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u/crookeddicktickle Marx 11h ago
You can’t budget yourself out of poverty. Wages need to go up.
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u/wet_suit_one Alberta 9h ago
While true, not everyone is in poverty.
Some people can actually be helped.
Or should they be denied that opportunity?
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u/Kheprisun Nova Scotia 14h ago
Horrifically out of touch.
Basic knowledge like "spend less than you earn" is just patronizing and doesn't actually help anyone when the bare basics are now eating up the lion's share of what some people earn. Young people aren't simultaneously all just opting to outspend their wages and claim there's a crisis.
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u/wet_suit_one Alberta 13h ago
And if that book doesn't work for you, the first 8 chapters of this book is pretty much all you need: https://www.goodreads.com/book/show/6621611-the-intelligent-investor
You're welcome.
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