Canadians copy many social and cultural conventions from their North American neighbors. At the same time, many Canadians, particularly those in policy-making roles, agonize over their conception of a Canadian “identity” crisis.
The latest manifestation of this trait is now a national economic problem. Canadians are carrying too much consumer debt against the preferences of leaders such as Bank of Canada governor Mark Carney and Federal Finance Minister Jim Flaherty.
Like their American cousins the policy-makers (politicians and bureaucrats) have been pursuing a low-interest rate strategy in an effort to “stimulate” a faltering economy. The regrettable side effect is that consumers have been going wild on increasingly stronger hits of credit. They are taking advantage of the low interest rates and extended terms provided in accord with rules established by the same policy-making elites.
Estimated to be about 4 years behind their US counterparts, Canadians are reported to be carrying an average debt burden of about 150 percent of their incomes. This is higher than the comparable statistic in the US today, where consumers have been paying down credit card debt and getting foreclosed on their mortgages.
Canadian banking and finance leaders are trying to appeal to Canadians to be responsible and get their debt under control.
Here is a news flash for the political and economic morons on both sides of the 49th parallel: personal responsibility accompanies personal liberty. Personal responsibility cannot be expected within the parameters of a paternalistic society or nanny-State.
The long-term solution to faltering economies characterized by “irresponsible” debt loads is short-term pain. A responsible government would be working toward removing some of the shackles on productivity. Here are a few suggestions.
- Reduce the spending that leads to budget deficits and growing government debt.
- Remove the regulations that impede commerce and create a workforce of dependents.
- Allow the free flow of both human and other forms of capital across national borders to competitively attract the most productive workers, entrepreneurs and investors from around the world.
The byzantine labyrinth of monotonous detail and oppressive regimentation that characterizes the North American political economies is doomed to collapse under its own weight. Massive debt combined with the wrong incentives for economic progress is the handwriting on the wall.
Policy-makers should stop the practice of copying the prescriptions of a century of failed “progressive” ideas and make a fairly ordinary return to that currently elusive condition of individual responsibility.
©Copyright 2010 Edward Podritske