An advertisement in this week’s issue of The Village Voice asks readers, “Would you like to stop using cocaine?”
Such is life in the planet’s primary metropolis of culture and finance.
Up here in the hinterland, Canadians might read that ad and think, “I wish I could afford cocaine.”
Mind you, wishing you could afford something and actually buying it are two different things.
But, for the sake of argument, let’s say you decide to shell out some sizable cash for a share of a cocaine shipment that successfully makes it to St. John’s because the seller’s car didn’t have a busted taillight and thus couldn’t be pulled over by the RCMP.
Where to get the dough? One option would be to do what more and more Canadians are doing in an effort to satisfy their consumption cravings: refinance your mortgage.
The quaint 1980s notion that “greed is good” has given way in the 21st century to the even more unsavory fact that greed is out of control. Having more and getting more is an addiction that afflicts not just bloated CEOs and shareholders, but Bob in the bungalow across the street.
The world being out of whack has become the new normal.
New Yorkers worry about overuse of cocaine.
The Bank of Canada worries that consumers are carrying too much debt.
Too much debt? Consumer debt is to banks what oxygen is to lungs, i.e., it fills them.
But there it is, in various news reports this week — the Bank of Canada says Canadians’ penchant for refinancing their mortgages to get their hands on extra spendable money is “the biggest domestic risk” facing the country, economically speaking.
Apparently, it’s a bigger problem than obscenely expensive housing that could see your grandchildren living in a lean-to. It’s even a larger dilemma than the national deficit and the national debt, which has not yet forced the federal government to remortgage the Parliament buildings.
Of course it’s a bigger problem, because it’s not merely political or partisan — it affects real people and their day-to-day lives.
As is common with Bank of Canada pronouncements, several almost incomprehensible statistics were helpfully included.
For instance, in 2001, Canadians used the value of their homes to back borrowing a total of $8 billion. In 2010, less than a decade later, Canadians’ use of that strategy to borrow money had ballooned to $64 billion.
There’s more bad news. When is news involving banks of any other kind?
Household debt in Canada amounts to 151 per cent of disposable income.
Depending on which news report you’re reading, this level of debt is either “a near record” (The Canadian Press) or “a record” (The Globe and Mail). Whichever is accurate, it is good for banks, but bad for people. This seems to be a common theme in financial news since 2008.
Oddly, you hardly ever hear the politicians who spout on ad nauseam about the national debt express similar concern about people who have to take on debt to meet their daily needs.
Contrary to economists’ eggheaded assertions, most Canadians are not living beyond their means. Rather, they do not have the means to meet their needs. Real income has largely been stagnant, or worse, for a generation.
Charge card indebtedness is not due to the purchase of speedboats, snowmobiles and vacations in the southern sun, or other “unnecessary” luxuries or toys.
People are in debt because they have to be, not because they can’t control their childish urges. This is the real dilemma. Don’t expect the Bank of Canada to address it any time soon.
Brian Jones is a desk editor at
The Telegram. He can be reached by email at firstname.lastname@example.org.