I am surprized that given the growing size of personal household debt, the Throne Speech had this statement: “Canadians live within their means and expect their government to do the same…” Hopefully, the government will aspire to do better than households! With household debt of $1.3 trillion, we are on the cusp of a major personal debt crisis.
wo of my favourite quotes are from Einstein: “Insanity is doing the same thing over and over again and expecting different results.” And, “We can’t solve problems by using the same kind of thinking we used when we created them.” Canadian and US Governments are bent on proving Einstein wrong! Prolonged low interest rates fueled unprecedented greed by corporate executives and individuals, feeding off each other. Executives gambled with shareholders’ funds knowing there was no downside for them, but phenomenal upside.
New regulations in the USA, the Credit Card Accountability Responsibility and Disclosure Act of 2009, is bad news for banks reeling from housing bubble losses, and the recession. According to law firm Morrison & Foerster, these rules will cost banks $12 billion a year in lost revenue.