Kids exiting uni owe an average of $28,000. For law students it’s four times that amount. If you’re a baby doctor or dentist, owning two hundred grand is no stretch. Lots of people carry those debts into their thirties, when they’re into the process of heaping on more debt – for a car or maybe a house.
In fact student loan debt is one of the inhibiting factors when trying to score a mortgage. And speaking of that, families now carry $1.6 trillion in mortgage borrowing. Plus $400 billion in HELOCs. Then there are reverse mortgages, and another $600 billion in credit card and consumer loan debt.
It’s everywhere. You know the numbers. Four in ten people have less than $200 a month after servicing their debts and buying yogurt and street cannabis. The debt-to-income ratio has never been higher. Borrowing is running four times hotter than inflation. Even when house values go down, mortgage debt goes up. It’s hopeless. Addicted. We’re pickled in the stuff.
This week the bank cop (OSFI) ordered the Big Six to put away more capital because of ‘elevated risks’ flowing out of housing, especially in the GTA and the LM. It’s called the “Domestic Stability Buffer” (I could use one of those), and it’s been raised now three times in about a year. It’s there so when an economic, debt-fuelled shock hits the economy, the banks have cash on hand to, yes, keep making loans.
We’re not alone. The feds can’t balance their books and Ottawa’s deficit will run thick and red for the next four years. Corporations owe a ton. Interest rates are too low, but central bankers are scared to hike since people already struggle to pay. Meanwhile low rates hurt savers and encourage more loans. People borrow money to pay the interest on existing borrowings. Car loans are 96 months – often lasting longer than the damn vehicle. People borrow to buy mattresses. Payday, cash-money loan vultures abound. Debts growing faster than people have the ability to repay them constitutes an economic disease. Hard to see where this is going to end.
So debt fatigue has bred some rad ideas.
During the GFC Obama’s administration tried bringing in mortgage forgiveness, but failed to get it through Congress. Five million families lost their homes and the financial crisis got worse. Many economists think the downturn would have been shorter and shallower if homeowners had been cut more slack.
Now it’s 2020 (almost) and the political winds have shifted. Have you heard about the Debt Jubilee? It’s the big new thing. The kids love it.
Democratic contenders for the US presidential contest have been proponents. Elizabeth Warren wants to forgive almost $2 trillion in student loans. Bernie Sanders would do the same and erase another trillion in medical debt. The arguments are interesting.
First, a lot of student debt is owed to the government, or backed by it. So forgiveness wouldn’t really screw the commercial lending business (much). Second, erasing debt for people is the same as cutting their taxes. That’s called ‘fiscal stimulus’. It actually means interest rates can go up to stem the tide of new borrowing because the economy gets a shot from the jubilee. Third, 60% of Canada’s GDP and 76% of that in the USA comes from consumer spending. Indebted consumers spend money on loan payments, not on new Silverados, appliances or (in Alberta’s case) weapons. So a debt holiday would actually boost the economy as a whole, helping employment, corporate profits, wages, markets and investors.
But wait. Is it fair to consider forgiving the debt of some dork who overspent and deserves to waste his adult life paying for it? And what message does wiping away loans send? Don’t we all need more fiscal discipline, financial literacy and a few kicks to the nether regions instead of just giving stuff away? How is this really different from a universal income in which everybody basically gets enough to get by without worrying about employment? Have we all lost our minds?
Maybe. But the idea of a debt jubilee is apparently five thousand years old, going back to Babylon where new kings would let everybody walk away from their creditors. That way people could afford to pay their taxes and buy stuff, creating a stable, prosperous society. And it was good politics. Kings got to keep their heads longer.
Sound commie ridiculous?
Actually the federal Libs have already started down this road with the shared-equity mortgage. It’s a way of relieving first-time buyers of a chunk of their indebtedness – money used to get a house, for which nothing’s paid.
The dogs are out.
169 comments ↓
I thought it was going to be a story about the old Jubilee bar in Poco. Darn …
Debt forgiveness = free stuff. Gonna get a lot of votes.
Bring on the Debt Jubilee!
I wouldn’t directly benefit as I’ve no debt, but the ability of central banks to raise interest rates closer to historic norms would definitely benefit savers. A decade of cheap money has done its damage; I don’t want to reward the imprudent, but credit was used to paper over the lack of real wage gains leaving most people with few options. Banks were rescued from their own bad judgement, now it’s the little guy’s turn.
Indeed the dogs have been let out, but by whom?
Whom, whom, whom, whom?
News Item:
https://www.cbc.ca/news/canada/british-columbia/2020-bc-property-assessment-forecast-1.5389749
So, if your home was valued at $1.2M, and you have maxed out your HELOC (65% of home value), you owe:
$1 250 000 x .65 = That’s $812 500
If your home drops 15% in value with the new 2020 assessment, the max value of your HELOC is also reduced: ($1 250 000 x .85) x .65 = (1 062 500) x 0.65
or $690 625.
Amount your bank will demand from you, approximately two weeks after you get your 2020 assessment:
$812 500 – $690 625 = $121 875.
Good luck with that!
The Torah states that debts must be forgiven every 7 years.
Meanwhile, in Dubai, one can end up in jail for owing money to someone.
Debts in Canada do not show up in Credit Reports after 6 to 7 years. Which country is more safer, tolerant and reasonable for human rights? Surely not Dubai!
Hmm, a “Stability Buffer” is just what many posters need, particularly the Trumplovers.
Serious question. If everyone from individuals and governments are in debt , who are they in debt too? Somebody, somewhere ,must be a net creditor n’est pas?
Seriously ,I really want to understand to whom or what all this money is owed too?
So the best thing to do is get into some “manageable” debt which is easily serviceable while having the upside of a government bailout? Calling my bank now to get that crack shack in East Hamilton. Thanks Garth!
You know things are getting really bad when “debt jubilee” starts being considered. We are hooped as a nation – get your house in order cause what lies ahead is going to be one hell of a bumpy road for this country
Some time ago I was listening podcast about student loans, and what fiasco it will be unraveling in a future.
Podcast was talking about collection of loans and ownership of same. Basically it would boil down to the point that original isuers were selling loans I a arrears to collection agencies without proper paperwork, so ownership was lost on both side. I typed looking for podcast but I can’t find, this link will do for now.
https://caselaw.findlaw.com/fl-district-court-of-appeal/1682348.html
One key problem is how much a higher education costs in the U.S. relative to Canada. Even at decent/but not elite state schools, it is very expensive to get a basic engineering or STEM degree that would typically be a ticket to a better life for lower-middle class (but smart) kids. Thankfully the tuition in Canada is not too bad and this is not as big of a hurdle as in the U.S. It needs to stay that way in Canada. Talk of raising tuition fees to “match” the U.S. makes my blood boil, as we are already taxed to death in this country with our high-marginal rates and so it is more difficult to save here for your kids than in the U.S.
The student debt numbers used in the post are Canadian, not US. – Garth
Who lets the governments off the hook?
IMF, World bank or do they get ta do some choppin?
No amount of debt forgiveness is going to fix things if Canadians don’t learn how to budget their money and live within their means. That’s the first thing that needs to be done, maybe via education and raising the costs of borrowing.
How many of the middle class who are crying poverty did it to themselves via housing they knew they couldn’t afford, furniture that was wholly extravagant, depreciating cars which were way more expensive than what was needed, exotic annual vacations, overpriced electronics for the kids, and the list goes on?
Forgiving debt without addressing the root problem will only result in more debt to forgive. And who will pay for it all?
When debt has been incurred for education then forgiveness sounds fair to me, but I’m biased. I left school heavily indebted despite working as much as I could throughout, and I’m still in debt now, nearly a decade later.
The pursuit of an advanced degree in particular takes a lot of time, time which could be spent working and saving, so there is already some economic disadvantage suffered by studying away. School loans on top of that means that you are really far behind before you’ve even started.
School debt is not like consumer debt. Pretty tough these days to do much without a pricey education.
Cripes.
People should read more Shakespeare; Hamlet.
“Neither a borrower nor a lender be; for loan oft losses both itself and friend; and borrowing dulls the edge of husbandry”
At first one might be angry at the sloths who get away debt free while the Loonie Doctor had paid back all loans, but I like what Sold Out wrote above.
Thanks Sold Out – hope you are right if this comes to pass!
The money has been paid to the Schools already..it’s really just tax money
so doesn’t matter some countries have free education already. this just means we are going towards that.
#8 Cottingham a bargain on 12.10.19 at 4:28 pm
Serious question. If everyone from individuals and governments are in debt , who are they in debt too? Somebody, somewhere ,must be a net creditor n’est pas?
Seriously ,I really want to understand to whom or what all this money is owed too?
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That would be me. Be on time and never be late on your payments unless you want me to be grumpy. And you like to keep your kneecaps. Lol
And what if those who worked there way through school and took longer to eschew debt? Way to kick them in the pants. Perhaps instead of loan forgiveness, refund tuition paid.
Our son was accepted into Medical School in BC in 2010. As soon as he was admitted he was contacted by two of the Big Banks and IG offering him a $200,000 Line of Credit. No questions asked! How did they even get his name? I guess they figured if he signed on then they had him for life and would be able to suck off some of his future earnings
All part of the Debt Contagion that you write about today Garth. Strange times we live in.
‘elevated risks’
‘elevated risks’
‘elevated risks’
propaganda works
privately owned central banks, debt monetizing, fiat currency, maybe someone should ask Jeremy Rudin to prove the risks. He cant.
#17 leslie on 12.10.19 at 5:14 pm
The money has been paid to the Schools already..it’s really just tax money
so doesn’t matter some countries have free education already. this just means we are going towards that.
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The money has already been paid, so that’s why the teachers wait Educators are going on strike! I would shut it down and lock the whole lot out. Tell them to come back maybe next fall. Over priced day care!
Great post today, Garth!
“But wait. Is it fair to consider forgiving the debt of some dork who overspent and deserves to waste his adult life paying for it?”
This has been one of the biggest arguments against student debt forgiveness, and has been dubbed “The Boomer Trolley Problem.”
The original Trolley Problem, which remains a hotly debated philosophical concept to this day, discusses whether or not it is ethical to divert a trolley onto a track where it will kill 1 person tied to the track, in order to save the lives of 5 people tied to the original track further down.
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
It’s not a hard problem to solve.
Which track are you on? – Garth
Does this mean I can ignore my margin call?
I’m one of those dorks who overspent to obtain a law degree and was saddled for nearly a decade with paying them back. I guess the government caught wind of my expertise at paying back student loans and wants me to do it for the next generation of overspending dorks.
Seems fair. As long as it means more Silverados crowding highways — maybe I can help pay for more highways, too.
Which track are you on? – Garth
Unfortunately, the trolley has already has its way with me. 2 un-utilized STEM degrees worth!
But I would very much like for the next generation to be spared that fate.
There is no legitimacy to debt forgiveness and is completely unfair to those who didn’t take debt or those to whom debt is owed.
What is right and sensible is to eliminate all further interest / usury payments and develop a proper timeline for debtor to pay back principle in a systematic manner.
What if OSAP “deemed” you should have enough money for your education and denied you. Begs the question why would you ask for a loan in the first place… Anyways Garth, would student lines of credit from big banks get forgiven too or just government backed? Hardly seems fair
> How is it fair… How is it different from universal income, etc?
It’s not. And IMO very different and much worse than universal income.
Universal measures like universal income, universal minimum tax exemption, universal tax cuts, are just that – universal. Everybody gets some. Nobody is directly and immediately screwed. Or so it seems. The ugly question of who ultimately pays for it all will eventually come up, but doesn’t hit anyone specific right away.
With the idea of debt jubilee you are immediately and brutally shafting every single honest sucker who fully paid his or her debt in the past. And all such who may do it in future. (Whose number will surely drop. Why bother paying back debt if this sort of thing is possible? Incentives are clear). Only those with outstanding debts at the moment of jubilee benefit. Unfairly.
It looks like central banks are on a gold buying spree. I wonder if they know something we don’t know? Hmm!
https://www.bloomberg.com/news/articles/2019-01-31/gold-demand-up-amid-biggest-central-bank-buying-spree-in-decades
For years this blog has told us to eschew debt, now there’s a blog on the possibility of a jubilee. The best way to play a coming jubilee is to take on debt … a lot of debt. Which is it?
Who is the debt owed to?
#18 Stone on 12.10.19 at 5:17 pm
#8 Cottingham a bargain on 12.10.19 at 4:28 pm
Serious question. If everyone from individuals and governments are in debt , who are they in debt too? Somebody, somewhere ,must be a net creditor n’est pas?
Seriously ,I really want to understand to whom or what all this money is owed too?
———
That would be me. Be on time and never be late on your payments unless you want me to be grumpy. And you like to keep your kneecaps. Lol
***********************
Right, a huge chunk of the population owes (usually indirectly) money to a much smaller chunk of the population. (Cue a very loud belching sound from the 1%)
I finished school close to $50k in debt… and that was 20 years ago!
I often wonder how much weathlier I’d be if it was free… but, c’est la vie!
The dogs are out. – GT
Who Let The Dogs Out?
https://youtu.be/Qkuu0Lwb5EM
“But the idea of a debt jubilee is apparently five thousand years old, going back to Babylon where new kings would let everybody walk away from their creditors. “
——
We’d probably be better off under King Nebuchadnezzar than under Trudeau either way.
American homeowners did not benefit from the government bailouts during the 2008 US housing crisis. Private equity firms, millionaires, and billionaires received the bailout funds, including members of Trump’s inner circle, such as Wilbur Ross and Steven Mnuchin (also known as “the widow foreclosurer”). Journalist Aaron Glantz recently published “Homewreckers,” a book on this topic. For more info, see these interviews with Glantz:
https://www.democracynow.org/2019/10/15/aaron_glantz_homewreckers_book_housing_crisis
https://www.democracynow.org/2019/10/15/aaron_gantz_steve_mnuchin_housing_crisis
#23
Which track are you on? – Garth
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Eight track!
I wonder Garth, why do you not speak to the billions of bailouts given to industry?
Any particular reason?
Or does their loan forgiveness and so on, not matter?
Debt owed to government is debt owed to taxpayers, who funded the loan in the first place. Used to frequent the local university a few years back as we were learning ballroom dance & it had sufficient space. In order to access the class had amply opportunity to see booths offering good & services for sale to the students. All the banks were flogging credit cards/loans. Travel agents were flogging travel deals/packages. Food court vendors were offering all the salty, sweet, crunchy & greasy viands everyone loves to nosh on. Plus vendors offering clothing, jewelry & dorm room decor. No lack of buyers so at least a portion of that student debt was due to spending on items that had NOTHING to do with tuition or classroom materials & everything to do with having a good time, regardless of whether one could afford it.
I can in theory support forgiving student debt that relates to tuition & classroom materials under certain circumstances. As in, that student is going to work in Canada & pay taxes in Canada upon graduation. I have zero interest of paying for someone’s good time party fun or living expenses while obtaining their education. Nor should we, because one can hardly blame younger generations for lack of maturity or financial responsibility when one is ensuring they never need acquire either.
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
—— –
That’s one dumbass “problem”.
Pull the lever and save 5 living people, the dead folks don’t care what you do.
My Cat could have figured that one out.
@ #23 SunShowers
Oh enough with the silly generation-baiting stuff!
As a millenial who carefully picked (for most part) practical down-to-earth education and not that long ago fairly and squarely paid every cent for it with my own sweat, I don’t find much to say to this. Other than expressing my general disgust with the attitude.
I am torn whether I even want to deign acknowledging such a lame analogy… But I gather, in that crude simplistic picture, I am one of the folks “already killed by the Trolley”, so I conveniently don’t get a voice in the matter…?
Sounds to me more like a matter of letting a select group of people ride the Trolley for free, while countless other second-class citizens have to pay for their own tickets.
What’s yours is mine.
Finally!
Why only 10% of the mortgage? Why not 50%? Take 50% Justin.
My kid got an electrical ticket. Company paid. Job waiting when he got out. He’s not gonna change the world, just fix it.
Always interesting to read & see what people down the road are up to.
#15 Fortvna
School debt is not like consumer debt. Pretty tough these days to do much without a pricey education.
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I agree for sure here, but it is much better to focus on a direction that leads to concrete skills and training… lawyer, engineer, computer scientist, social work, bio-med, etc… no need to go deep in debt for classes on gender and identity etc.. (in my view). I came from a family with zero resources, so I was highly motivated to study something that would lead somewhere tangible.
However, in my day, it was a split between student loans and bursaries (which disappeared for the Gen-Ex people). That with scholarships etc.., I didn’t have too much debt when I left school, even though I had an education fund from my family of about 2K total. Was somehow a little easier then….
The top 10 growth jobs according to LinkedIn leaves little doubt were the secular growth in the economy is going to be. The productivity gains through the synergies of developing and combining Artificial Intelligence, Robotics, G5, Internet of Everything, Quantum Computing, Drones, Bio- genetically designed Pharmaceuticals etc. will have to be balanced by the increased threats from cyber hacking. (job #10). What this also says is the demand for labor in general is going to steadily go down, for every type of job! There will be robotics for assembly/driving to Artificial Intelligence for accounting/teaching/doctors. Wherever there is currently a human job, “there’ll be an apt for that”. The next ten years will be the most transformative. In Chinese the word for opportunity is the same for risk. What is the new “Apple ” or “Microsoft ” now going for $5.00?
https://www.marketwatch.com/story/the-no-1-job-of-2019-pays-140000-and-its-hiring-growth-has-exploded-74-2019-12-10?mod=home-page
Does Elizabeth Warren remember that she running in the land of free and the hater of socialism?
Her polices makes Bernie Sanders look like Ronald Reagan.
Lets see now. low interest rates boosted the price of houses. So…a student loan ‘jubilee’ will only serve to raise the price of tuition
It’s becoming increasingly common in the US for working-class students who earn advanced degrees to carry student-loan debt into retirement. My American spouse, for example, graduated with an advanced degree and around $150,000 US of student-loan debt. His father died young, and his mother was poor. My spouse worked at part-time jobs throughout his entire studies and full-time continuously since graduating. His debt has crippled him financially for life. At 59, he still owes tens of thousands in student-loan debt. I paid off my student loans (half my education was in Canada) and some of his debt, but we’re still struggling. We have no kids and have never owned any housing, and the most expensive thing we’ve ever owned is a $9,000 used car. The amount of debt a student incurs is strongly tied (a) to the amount of money his/her parents can afford to give their child for schooling and (b) to how well-funded a university system is by a province or state. I do not think that some student-loan debt forgiveness would be outrageous. Another option is better funding for universities because there is an inverse correlation, both in Canada and in the US, between the decline of governmental funding for universities and the rise of student-loan debt.
Off topic, but I’ve noticed quite a few price reductions on SFH (on Zolo) in Mississauga recently. Is this common for this time of the year?
#20 Retired in Kelowna on 12.10.19 at 5:20 pm
Our son was accepted into Medical School in BC in 2010. As soon as he was admitted he was contacted by two of the Big Banks and IG offering him a $200,000 Line of Credit. No questions asked! How did they even get his name?
—-
Same thing happened to us after we had kids. Strange free samples of wet wipes and Penaten mysteriously appeared in our mailbox shortly thereafter…
How Much to Borrow?
#31 What? on 12.10.19 at 5:54 pm
For years this blog has told us to eschew debt, now there’s a blog on the possibility of a jubilee. The best way to play a coming jubilee is to take on debt … a lot of debt. Which is it?
**********************************
How much should you borrow if interest rates are very low, possibly lower than inflation, and there is also talk of debt forgiveness?
Back up the truck?
Talked to another construction industry supplier today….
Dead, worst Nov. in ages, Dec is even slower……
Methinks the rout in BC Construction is well under way…
i like it.
98% of those defaulting are renters according to the news articles.
Link them. – Garth
#40 IHCTD9 on 12.10.19 at 6:28 pm
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
—— –
That’s one dumbass “problem”.
Pull the lever and save 5 living people, the dead folks don’t care what you do.
My Cat could have figured that one out.
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And if your cat were looking up he’d see the point, cause it was about 2 feet over your head.
Hard to see where this is going to end?
Not really.
I need a tax jubilee. Over 300K paid last year. Becoming a non productive bum looks more and more appealing.
“Ontario bankruptcies and consumer proposals increased by 15.9% in the first ten months of 2019, while Canadian insolvencies increased 9.7%. The pace of growth is accelerating. That is why I believe that this uptick in filings won’t be slowing down anytime soon. This is only the beginning. And if we see a recession, if housing prices fall or stagnate, that opens the risk to a whole new rung of asset-owing Canadians who may need to file insolvency to dig themselves out.”
This excerpt is from “N” who posted an excellent link yesterday (#122), words spoken by a Trustee in matters of bankruptcy.
Unless I am mistaken all the big five banks reported significant increases to loan loss provisions for both the final quarters and year over year provisions. They tried to distract from this by wailing about productivity ratios, but that’s an old ploy that gets dragged out of the closest and dusted off when they want to avoid other conversations.
News reports today indicate BC assessments for the lower mainland will be ‘down’, which supports falling values. Those who wish to consolidate debt into a new mortgages may find it impossible.
You don’t have to be chicken little to see storm clouds on the horizon. I for one firmly believe people who bring these things on themselves need to climb out of the ditch they drove themselves into by their bloodied fingernails, hands and other limbs. Tighten your belt, sell assets if necessary to retire debt, and avoid future economic misadventures with a reality check on what you need versus what you want. Start with you cell phone bill and consider public transportation your new Temple of Salvation.
What can I/we say…..
Entitled and expectant is what have been raised over these past few decades beholding to no one and expecting of everyone.
This is all our money they are spending and will be looking at the end of the rainbow for some CPP or OAP and wondering why it isn’t there.
Cause they spent it in the beginning unlike our generation who paid debt down and paid into these programs and now deserve a return….you know, like maybe we earned it. What do I know….
#8 Cottingham a bargain on 12.10.19 at 4:28 pm
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Im shocked Garth even let this comment through. Put on your tin foil hats kids. Did you know the Bank of Canada used to lend ‘interest free’ to the feds and provinces. What happened to those days?
Papa Trudeau was PM at the time..and for some reason the government started taking loans from different chartered banks, of course these loans carried interest.
This is quite a rabbit hole to go down, be warned, it will make you homicidally angry.
Without a price money becomes worthless, leading to inflation and misery. No central bank can give money away and maintain sound monetary policy. – Garth
Have you heard about the Debt Jubilee?
___________________________
Yes. Book:
… and forgive them their debts: Lending, Foreclosure and Redemption — From Bronze Age Finance to the Jubilee Year
https://michael-hudson.com/2018/08/and-forgive-them-their-debts/
… very good read!
Best,
F.S.
I got out of College with 13k in debt, and started work at 23k/yr.
Bud at work’s millennial kid got out of University with 50k in debt, and started work at 70k right away.
What is there to complain about? I don’t make 70k even now after 24 years working. The millennial kid has it made in the shade. So do I for that matter.
My eldest Gen Z if successful in his application will get paid to earn a degree, and start work at 22 making 50k, and be between 70-80k by the time he hits 30.
Sounds like most of the “problem” out there is bad decision making when it comes to career choices…
#8 Cottingham a bargain on 12.10.19 at 4:28
Our monetary system is a fractional reserve system. To put it very briefly, banks lend out money they don’t actually have up to some multiple of the money they do have. (Sweet business – you get to create money out of thin air and then collect interest on it. The systemic and moral hazards implicit in the business model is why banking is so heavily regulated.) The net result is that something over 90% of the currency in our economy exists only because of debt. Everybody borrows money and, through a complicated system of deposits, bond issuances, equities, pension plans, life and casualty insurance and other more exotic vehicles, owes money to everybody else (with a few notable exceptions like myself who are creditors only.) It’s kind of mind bending, but debt (both public and private) is absolutely essential to the functioning of our monetary system. The trick is to keep the total debt the right size for our GDP. This is where things are beginning to get a little sketchy, and it’s really hard to correct because the first thing that happens when you shrink the debt is that the GDP shrinks too.
Sorry, that probably didn’t help, but it’s the ugly truth – really, really f’n complicated.
What a bunch of losers Canadians and Americans would be happy with getting a $20,000 or $50,000 debt forgiveness in student loans or whatever debt.
Like I keep saying to the socialists and Liberals, NDP, Greens and other left, sinister politicians with socialist disasterous policies are crap and never work as they say will pan out.
Minimum wage at $15, $20, $30, $100…. to higher child tax benefits, welfare for kids really are just like a debt jubilee, it sucks, it will not work because all that extra money will just be taken by higher rents, groceries, gas, insurance, daycare, childcare costs etc. etc. higher cost of living, higher inflation.
A debt jubilee is just as worthless and from Zimbabwe to Venezuela to South Africa to Cuba etc. all end up in very high poverty and social unrest, socialism carper. This happens over and over because people believe in free stuff is free, you can’t get away from the laws of economics and math.
By the way, you free stuff people get bought up to cheap, ask for $1 million or $2 million, then see how your free stuff is worthless fast. There is no free lunch. It does not exist. Warren, Sanders and other socialists are the cancer of society and are really idea losers with no real problem solving solutions. Nobody owes you anything.
#55 Tater on 12.10.19 at 7:11 pm
#40 IHCTD9 on 12.10.19 at 6:28 pm
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
—— –
That’s one dumbass “problem”.
Pull the lever and save 5 living people, the dead folks don’t care what you do.
My Cat could have figured that one out.
——————————————
And if your cat were looking up he’d see the point, cause it was about 2 feet over your head.
—
Oh, I know what SS’s “point” is.
Let’s see if he/she takes the bait (you sure did).
Two people: Jim and Larry:
Jim worked hard at post-secondary school, studied and did his assignments on time. He also worked hard during each year sending his CV out to many potential employers for summer work. Jim secured good paying summer jobs due to his planning ahead. Jim leaves uni with $11,000 student debt, which he diligently pays off in less than 2 years while earning the entry level salary.
Larry partied hard in university. He had to repeat 2nd year due to failing many courses. He also changed majors. Larry didn’t think much about summer jobs. By the time he graduated, Larry had a minor in humanities. Larry had $65,000 of student debt. He also had trouble finding work, so his debt rose to $72,000 within a few years.
Larry voted for Warren, she won, and Congress passed laws to erase student loan debts.
How is this “fair” that Larry has a $72,000 windfall while Jim’s windfall is somewhere close to zero. Think about it…
There might be a steep U.S. stock market drop tomorrow because of the U.S. impeachment proceedings.
Zero relationship to an impeachment Trump is 100% certain to avoid. – Garth
>What I heard someone say back in January was that U.S. student loan debts are the largest debt bubble in the U.S. and that it’s impossible to default on them.
>This is from 2016:
President Obama’s horrible, terrible legacy on student loans
BY ALAN M. COLLINGE — 05/13/16 07:00 AM EDT 164
THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL
When he announced his candidacy in 2007, Barack Obama looked like he could be the one to finally stand up to the student lending system. He was one of only two members on the Senate Health, Education, Labor and Pensions (HELP) committee not to have taken money from the Sallie Mae PAC. In this position he was privy to HELP Committee and other reports detailing a broad swath of illegal and deceptive activities by the lenders, the universities, and even the Department of Education.
His rhetoric about making college “affordable” sounded great. The deletion of most every standard consumer protection (like bankruptcy and statutes of limitations) from student loans had caused a hyper-inflationary market, and a systemically predatory lending system that was lives and livelihoods of millions of people. The nation’s student loan debt had skyrocketed to $450 billion, and the Department of Education had actually begun turning a profit on defaults.
So when Obama was elected, largely due to overwhelming support from young people, it was assumed that he would make things right. But he did nothing to bring back any standard consumer protections. His administration did nothing to curb the predatory collection powers of the student lending system. College prices increased faster than previously, and today the average undergraduate is now leaving school with $35,000 in debt, up from about $17,000 when Obama announced.
By the time Obama leaves office next year, the nation will have added $1 Trillion to its student debt tab.
What the Obama administration did do was great for the federal government, not the students. Obama federalized the system to where the government now profits immensely from both interest on loans it makes directly to students, and defaults. To say that the federal government now sits atop the most predatory lending system in our nation’s history is not an understatement…
…President Obama still has 6 months left. There are 3 good bills in Congress right now that would at least return uniform bankruptcy rights to student loans- something that that the founding fathers called for-ahead of the power to declare war, form a military, and coin currency when they gave power to Congress in the Constitution. Obama could get any one of these bills moving (I would recommend HR 449, since it has bipartisan support)….
https://thehill.com/blogs/congress-blog/education/279512-president-obamas-horrible-terrible-legacy-on-student-loans
#48 Niagara Region on 12.10.19 at 6:50 pm
—-
What did hubby take in school that racked up 150k!?
Per BC tax Assessment:
Greater Vancouver home values will fall by as much as 15% next year, depending on location.
Victoria home value assessments to fall 10 per cent next year.
Central Okanagan supposedly down 5%.
This is unprecedented for BC Assessment but instead of telling it like it is they have thrown a spread in to include upswings to water it down big time.
The actual numbers -23% in Vancouver, -14% in Victoria and -12% in Central Okanagan.
But they won’t let it drop that much because tax revenues are needed.
A 15% drop in Vancouver means your home piggy bank credit limit is shrinking by 195,000k.
Take note this is back-to-back drops in BC, now proving worse than the aftermath of the financial crisis 2009-2013 by government numbers.
Let’s see what the magic trick is this time to keep the party going at a time when debt is everything.
Re: Debt Jubilee
I think the resistance to this notion amongst the steerage is an inability to get past the wish for biblical-style vengeance on those perceived to be stupidly living beyond their means. I don’t propose that we let serial shoe shoppers and new car junkies off lightly; student loans and payday loans would be my first choices.
…but, Remax said house prices would go up in BC.
When Japan initiates the first debt jubilee it will be impossible for all other fiat currencies to resist. The faith will rattle and the separation of money and state may occur.
Buy bitcoin.
The trouble with debt forgiveness is that it is very unfair to people who don’t get it. For example, why should a tradesman who never got a student loan get nothing while a doctor gets $200,000 forgiveness.
So all of this is political pandering. Debt forgiveness can’t work. A better strategy would be to allow student loan debt be addressed through bankruptcy. I’m not sure why it isn’t already.
Even universal income would be a better idea, because at least then the tradesman gets the same benefit as the students.
In any case all debts are eventually paid, either by the borrower or by the lender. That is why the concept is unworkable today. Loans are of a different nature than they were 5000 years ago. If they go and cancel all those student loans, well that money came from somewhere even if it was the government, so whoever did the lending is not going to get paid back. It’s tantamount to theft from a moral point of view. Even if it’s the government that gets the shaft, it just means that taxpayers are just that much further behind the eight ball. Remember, the government doesn’t have any money save that they extract through taxes or borrow (which as Garth has pointed out numerous times amounts to future taxation).
Of course governments can resort to printing money but that seldom ends well. Excessively low interest rates are already bad enough, but governments who resort to “modern monetary policy” (i.e. printing money) invariably destroy their currency which results in horrific economic results because nobody can buy anything and commerce stops. That is probably where we are headed eventually, and everyone who understands what’s going on knows that, but I would prefer to leave that day in the distant future.
Yooo Hooo !
Jane24!
https://www.reuters.com/article/us-britain-election-yougov/uks-johnson-now-less-certain-of-election-victory-yougov-idUSKBN1YE2OP
The socialist hordes may take the day.
Long Live Comrade Corby!
Do you have your bags packed for a quick escape to the Italian Palace?
The taxation “torches and pitchforks” in Jolly old Blighty has only just begun….
What’s old is new again.
Welcome to the 1970’s…recession, nationalisation of utilities, union strikes, tax hikes……
Ahhhhhh…..communist bliss.
#12 yvr_lurker on 12.10.19 at 4:40 pm
Thankfully the tuition in Canada is not too bad and this is not as big of a hurdle as in the U.S.
$$$$$$$$$$$$$$
Agreed, not as big a hurdle as in the US, but…
From the UofT website:
“In 2019-20, domestic student (Citizens and Permanent Residents of Canada) tuition for the full-time JD program is $33,040.”
So $100K for a law degree tuition alone. Fortunately, rent on very nice apartments close to UofT is real cheap, as are restaurants, bars, transit and entertainment.
My daughter’s tuition for law school is $13K this year out on the Plains.
I left law school in Vancouver (away from home) with a $13,000 total debt in 1983. The BoC inflation calculator puts that at $30K today.
Pretty pricey stuff in my view.
WUL
# 54 Allessio
link…I read the same article
https://www.hoyes.com/blog/10-top-debt-statistics/
What the heck is CUSMA supposed to mean?
Canada United States Mexico And
??
Idiocy. Nobody else in the world will ever refer to it by that acronym. Give up the desperate gasp for relevance.
#70 Well screw me sideways
If all the properties in a municipality go down exactly the same percentage, nobody’s taxes are affected. The Municipality just adjusts the mill rate. The whole purpose of that silly appraisal system is just to compare properties so that they can decide if one person is paying $4200 a year should his neighbor pay $4500 because he has more square footage. That’s why appraisals are often so far from recent transaction prices.
And further to my previous comment, see how easy it was for Boomers?
Millennials should be fiercely pissed at my generation.
Justifiably.
Probably won’t blend well with an over levered banking system at extreme valuations.
bank cop (OSFI) knows what is up.
By next year, they mean when the letters hit mailboxes in 21 days, the same day people will be nursing their NYE hangover. That is going to make for one big headache.
The numbers represent peak time of July of every year. Imagine if they took the numbers in the slow months.
And finally with those big drops in values in Vancouver you think one could get a break.
Nah. Vancouver taxes going up 8.2%.
#48 Niagara Region on 12.10.19 at 6:50 pm
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What did hubby take in school that racked up 150k!?
__________________________________________
My spouse has a PhD in English and is a tenured professor at one of the most well-respected research universities in the US. Unfortunately, professors in the US are generally paid very poorly, with the exceptions of an increasingly narrow number of fields (e.g., medicine). Funding cuts to universities have been brutal in the US. My spouse is lucky because he has full-time, permanent work, albeit with a poor salary. Over 75% of faculty at American universities (averaged across the disciplines and across universities) are on temporary, usually part-time contracts, making only about $3,500 US per course, even though undergraduates are paying as high as $80,000 US per annum for tuition plus residence. Public American and Canadian universities have been decimated by declining governmental funding over the past 25 years. Apparently politicians no longer think that an educated citizenry is a worthwhile investment. When government funding declines, student-loan debt rises.
#70 Well screw me sideways
PS a good example of this is what happened recently in Calgary. So many businesses have gone under since the start of our depression that the city just prorated the missing business tax revenue onto the remaining businesses, almost driving a bunch more of them out of business. Now they have a new proposal to to increase residential taxes so they can reduce business taxes. But they always calculate to the same total tax revenue as if the money must magically be out there, even if it isn’t. So they are selling it as a $150 dollar tax increase on residences in support of lower business taxes. But that magic money won’t appear so people will be spending $150 a year less at said businesses. But politicians cannot do math, or understand finite limits. They think any new or increased tax will be met with new magic money. They don’t realize that most of the money in circulation is already in use, and if they take more away the previous use has to be cut.
A debt jubilee is a fine idea. I wouldn’t benefit from any debt forgiveness, but would indirectly benefit from the following mad spending.
This would be huge, although absolutely false, economic stimulus. In the end it would just be a credit reconfiguration.
Do it, don’t do it… really makes no difference in the end.
It’s long overdue after the introduction of the temporary income tax. Maybe money is just a symbol of exchange, with no intrinsic value.
Student debt: How come Germany has no (or almos nil) tuition fees. Their education systems seem repectable. I am embarassed by what we have done to our youth. They should stick us on ice flows and wave good bye.
I don’t know if anyone outside of Calgary is following this but apparently the city has agreed to fund a new hockey arena for the Flames to the tune of something like $250 million, or about half the cost.
Now, if this is simply property tax relief for a certain number of years, I’m ok with it. But if our bankrupt city is actually fronting the money, no way. The billionaires who own the team can pay for their own damn arena.
I don’t even know why it’s necessary. The Flames hardly ever sell out the Saddle Dome. It is not too small. All it needs is more washrooms. Surely there is a way to do that for less than $250 million? I’m sure just putting port-a-potties on the promenade would do it.
And now they are talking about replacing McMahon stadium. Why? The Stamps are a CFL team. There is no money there. All CFL teams are always just one season away from bankruptcy and don’t have nearly enough cash to support new stadiums. Stadiums in Canada are built for other reasons, and then rented to the CFL when not in use. I mean we have to be realistic about these things. The CFL could disappear tomorrow and only a small portion of the population would notice. It’s not the sort of thing you invest a lot of money in.
McMahon Stadium has received numerous upgrades over the years and is entirely fit for purpose for CFL games. And it was good enough for the Olympics. If it was good enough for the Olympics (boy that was fun!), it is good enough for the CFL.
And if the Flames want a new arena, maybe they could start by giving us a good team?
The more we forgive debts, the more those debtors will borrow right after. Do we just keep bailing those out who live above their means? As for student loans, just pay the tuition portion!
#23 SunShowers on 12.10.19 at 5:30 pm
Great post today, Garth!
“But wait. Is it fair to consider forgiving the debt of some dork who overspent and deserves to waste his adult life paying for it?”
This has been one of the biggest arguments against student debt forgiveness, and has been dubbed “The Boomer Trolley Problem.”
The original Trolley Problem, which remains a hotly debated philosophical concept to this day, discusses whether or not it is ethical to divert a trolley onto a track where it will kill 1 person tied to the track, in order to save the lives of 5 people tied to the original track further down.
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
It’s not a hard problem to solve.
———–
LOL… now I Know for sure that you have little understanding of how economic works. Not surprised, but your post definitely confirms it.
You claim there is no downside to loan forgiveness? Well, ask who is paying the debt off. Someone is definitely paying as you can’t just make the debt disappear like magic. Answer: it’s the government that will pay the debt off, resulting in more government debt and eventually more taxes for us.
What an entertaining post. Love it!
“Domestic Stability Buffer” (I could use one of those)
I thought that was Bandit’s job!
#66 BlogDog123 on 12.10.19 at 7:29 pm
Two people: Jim and Larry:
Jim worked hard at post-secondary school, studied and did his assignments on time. He also worked hard during each year sending his CV out to many potential employers for summer work. Jim secured good paying summer jobs due to his planning ahead. Jim leaves uni with $11,000 student debt, which he diligently pays off in less than 2 years while earning the entry level salary.
Larry partied hard in university. He had to repeat 2nd year due to failing many courses. He also changed majors. Larry didn’t think much about summer jobs. By the time he graduated, Larry had a minor in humanities. Larry had $65,000 of student debt. He also had trouble finding work, so his debt rose to $72,000 within a few years.
Larry voted for Warren, she won, and Congress passed laws to erase student loan debts.
How is this “fair” that Larry has a $72,000 windfall while Jim’s windfall is somewhere close to zero. Think about it…
——————————–
Doesn’t matter to us Canadians, does it? Jim, Larry and Warren are all in another country.
Wonder what Rhodesia is up to?
People tend not to value that which is free.
#50 IHCTD9 on 12.10.19 at 6:54 pm
#20 Retired in Kelowna on 12.10.19 at 5:20 pm
Yep, its easy to find documented cases of people in positions of trust selling this information on the side – ie from maternity wards…
#69 IHCTD9 on 12.10.19 at 7:31 pm
#48 Niagara Region on 12.10.19 at 6:50 pm
—-
What did hubby take in school that racked up 150k!?
—
bach and masters degree @ 24k per yr
RESP investments meant zero debt for us or our son for his post secondary education!
Paging: Professor Stephanie Kelton?
I’ve commented here in the past year to watch out for two phrases: Debt Jubilee & Modern Money Theory.
At the time it seemed obvious (and still does) that western capitalist systems, for a multitude of reasons, must find a way to avoid a civil revolution, while desperately trying to keep the consumer’s spending.
But the problem for sovereign gov systems is this:
If MMT, a Debt Jubilee or a Basic Income is publicly implemented, on national scale, the system will be forced to disclose how taxation / money / lending, actually works.
This is going to cause some very strong negative emotions, against sovereign currencies from the populace, especially those whom have been responsible, sacrificed lifestyle and saved.
Now where’s that popcorn….
Pay Day Loan Outfits present a perfect candidate for a “Debt Free Jubilee”. This malfeasance represented in a “supposed first world society” already popular for rescuing puppies and kittens and inviting in all the world’s poor and forsaken should at minimum open their hard heart to uplift our debt oppressed fellow Canadians. Of course, we want to put the Pay Day loan shops out of business a.s.a.p. and slicing their fees and rates to the Bank of Canada rate at 1.75 would be the right thing to do. The present Regime is all about the middle class. Fix the Pay Day Loan for the middle class.
Moral hazard…wow…forgive em as long as anyone not in debt gets a few hundred grand bonus.
Or
Let the recession that wasn’t allowed to really happen play out as it should have. Rate should have been set at 3% 5 years ago. Now we’re talking about rewarding carelessness, dishonesty and greed. Great. No wonder we’re a destination of choice. Easy pickings.
#49 ts on 12.10.19 at 6:53 pm
Off topic, but I’ve noticed quite a few price reductions on SFH (on Zolo) in Mississauga recently. Is this common for this time of the year?-
————————————————————————————————
It’s common when the listing have been sitting in the fall market, drop the price prior to Christmas if it doesn’t sell take it off the market bring it out as a new listing mid January and start again. Rocket science it’s not.
Recall a TV program called Lifestyles of the Rich and Famous.
It was a propaganda piece in the guise of a training film that started all this. Soon after it began to air popular shows like Hee Haw, Green Acres, Beverly Hillbillies were silently removed while things like our present day ET, etc crept in.
They switched us from laughing with the rural and poor to laughing at the rural and poor. Same tactics being utilized on “them”…anyone who isn’t us.
As a former life long worker bee, albeit with more than enough cash to accomplish a life, I’d advise most of you to really ponder just exactly who you are carrying water for on this debt thing. Or even guaranteed income.
The facts remain…when you give money to or allow financial forgiveness for the poor, the marginalized, the taken advantage of, then that money hits the local economy and its multiplier effect benefits society far beyond the individual receiving it.
Otherwise why would the new right spend so much time and effort to negate any discussion or progress on these proposals? From propaganda like today’s thoughts to cancelling programs, to eliminating jobs in strategic areas to omnibus bills with social spending cuts well hidden…
Recall it was a Progressive Conservative federal government who, on seeing a great idea come out of Saskatchewan, passed our first national healthcare policy…
Careful who you carry the water for…they are wonderful at letting you think you are better off and should be fighting the less able, less fortunate on their behalf while they walk to Cidel to move the real money to Barbados…
@#80 WUL
And further to my previous comment, see how easy it was for Boomers?
Millennials should be fiercely pissed at my generation.”
+++++
Sorry WUL. I totally disagree.
When you graduated in ’83… bank interest rates on the $13,000 student loans were hideously high.
$13,000 would have purchased a brand new Toyota Truck ( $50,000 today).
Boomers have no apologies.
If kids today want to saddle themselves with tuition debt…they better be serious about what they are studying…..
OR they car turn their backs on the “Degree Factories” that pump out thousands of unemployable, politically correct, parrots that spew the latest socially acceptable drivel their profs regurgitated to them….
Go get a trade and ‘earn while they learn”…….and 4 years later , after earning $60k, 80k per YEAR as appretices….they have a Red Seal Trades ticket…..and no debt.
Nonplused # 74,
“In any case all debts are eventually paid, either by the borrower or by the lender. That is why the concept is unworkable today. Loans are of a different nature than they were 5000 years ago. If they go and cancel all those student loans, well that money came from somewhere even if it was the government, so whoever did the lending is not going to get paid back. It’s tantamount to theft from a moral point of view. Even if it’s the government that gets the shaft, it just means that taxpayers are just that much further behind the eight ball. Remember, the government doesn’t have any money save that they extract through taxes or borrow (which as Garth has pointed out numerous times amounts to future taxation).”
—————————————
Reminder: Chartered banks have the legal right, based on only a mortgagor’s signature, to create new ($) funds (or deposits, as Shawn prefers) from nothing. This happens on a daily basis and is the fundamental way 97% of monies (vertical?) in the system have been created.
Why can’t a sovereign government do same?
Disclaimer: This, is not not a sinister system. It fuels our capitalistic economy. Sourcing ($) for whatever reason, without this chartered bank system, would mean funds would be much more stringently dispersed, based on the lending party having to lend out, their own, hard earned funds whether institutional or not.
@#88 say NO!
“And if the Flames want a new arena, maybe they could start by giving us a good team?”
++++
I was living in Cowtown in 1980 when Atlanta lost the Flames and they moved to Calgary…Sell out crowds. crazy.
A few year after I left…the Saddledome…
You know you’re getting old when you remember a building being built…and then torn down…
$250 million for a new Hockey arena?…..
Pffft.
Rain-couver spent $600 million on a retractable ROOF for a 35 year old CFL football stadium……in rainy Vancouver…….
http://www.timescolonist.com/news/b-c/b-c-place-roof-raises-cost-questions-1.2222844
BC Place costs taxpayers 10’s of millions per year for maintenance…
Cant remember the last time the 50,000 seat stadium sold out other than the 2010 winter “Owe-Limp-icks” ceremonies….
Enjoy the game.
#27 Hawk on 12.10.19 at 5:42 pm
There is no legitimacy to debt forgiveness and is completely unfair to those who didn’t take debt or those to whom debt is owed.
What is right and sensible is to eliminate all further interest / usury payments and develop a proper timeline for debtor to pay back principle in a systematic manner.
*********
…and I’d add, no more use of credit. Call it a forced ‘live within your means’ plan.
Delayed gratification – almost non-existant these days. We are innundated with offers/deals – targeted now, based on search data. The individual must differentiate between wants and needs….but it seems ego now wins out.
Whatever happened to thinking it was cool to be a wealthy guy that no one knew was wealthy?
M56BC
I’ll bet 99% of the baby bonus bribe Trudeau handed out is being spent on car lease pmts and vacations. Nobody owns anything anymore and as traveled as I am I see a trend of entire families, inc sons, pregnant daughters and grandad vacationing together. Where’s the money coming from, it’s either Trudeau welfare money or Grannie bashing, low life either way.
I paid my kids UNI in cash by speculating in the 90’s gold bump. I ended with a surplus which started TFSA’s. Acquiring debt to me means that you’re too stupid to make money. Tough love? Sure. But are you ready for the tsunami of bad news on the economy the CBC has been hiding from you as they lifted a mountain of Two Faced crap to push another term of embarrassment on Canadians.
Consumer spending is in the toilet, confidence is dead, revenues and cap ex are tumbling. Get ready for the next Trudeau Recession. Likely three years are dead on the vine. If you don’t plan for it, too bad.
People want to always learn the hard way. A debt Jubilee, universal basic income UBI, $15, $20 or whatever high minimum wage you think is a good minimum wage, $200 a month more for child tax benefits which are tax free, free drug plans, pharmacare, free dental plans and any more socialist policy, ideas tricks pulled from their liberal, NDP, Greens, Democrat, Labour Party and any lefties hat is always going to fail.
It will never work and has failed many times throughout history. Canadians, people you are not important to them and they don’t care about you. It is all about keeping their elite power, lifestyles at your expense and making sure you will always live and be poor, poverty, dependents of the state, government.
You don’t understand basic economics and how inflation, a higher cost of living which includes taxes everyone works. This is the dumbed down of our society has become. Look at you.
#84 Nonplused on 12.10.19 at 8:07 pm
#70 Well screw me sideways
PS a good example of this is what happened recently in Calgary. So many businesses have gone under since the start of our depression that the city just prorated the missing business tax revenue onto the remaining businesses, almost driving a bunch more of them out of business. Now they have a new proposal to to increase residential taxes so they can reduce business taxes. But they always calculate to the same total tax revenue as if the money must magically be out there, even if it isn’t. So they are selling it as a $150 dollar tax increase on residences in support of lower business taxes. But that magic money won’t appear so people will be spending $150 a year less at said businesses. But politicians cannot do math, or understand finite limits. They think any new or increased tax will be met with new magic money. They don’t realize that most of the money in circulation is already in use, and if they take more away the previous use has to be cut.
**********
Turning into a vicious cycle at this point…soon to be a BC experience but like you said they will just adjust the mill rate, taxes will not go down. Cities need the property tax revenue, for some it is basically 95% of their revenue.
And then we hear from another blog dog that they want two new stadiums in Calgary. It will create much needed jobs and economic stimulation. But there must a better project(s) to spend that type of cash on rather than sports teams. How about another refinery?
#44 yvr_lurker on 12.10.19 at 6:41 pm
Yes, I agree that it may not be the most prudent thing to pursue a “useless” degree (although for various reasons I vehemently disagree with the anti-humanities studies sentiment displayed by many posters here) – and if knowing this you choose to but ultimately can’t make enough to sustain yourself then that’s your due. It’s unfortunately a luxury to be able to study whatever you want. But I wish it weren’t.
I also come from people with no money – in fact, only one of my four grandparents was literate – and likewise pursued one of those degrees you listed with earning potential. I was extremely studious and did one of my post-grad degrees as a stepping stone to the other, which I believed would lead to a more lucrative career. I received a small scholarship going into university but didn’t qualify for grants, or anything after the first year. I did not fail classes, or take an inordinate amount of time to get through school. I commuted hours each day for my undergraduate degree so I could live at home. And for my post grad studies, I picked the school with the cheapest tuition. It was still a lot, and I had to live away from home.
I am lucky to be where I am now, and I don’t want to complain, but the debt is a heavy burden. Do I deserve to waste my adult life paying for my education? Seems like it, according to many.
I like the idea of tuition refunds, and of “free” education even more. Maybe then when I see half my salary taxed, it won’t feel so bad.
“…BC Assessment but instead of telling it like it is they have thrown a spread in to include upswings to water it down big time. The actual numbers -23% in Vancouver, -14% in Victoria and -12% in Central Okanagan.
But they won’t let it drop that much because tax revenues are needed. ”
———————————–
Cities and municipalities will simply raise the mill rate on the lower assessments.
Presto, they still achieve the revenue they seek.
Reverse engineering isn’t just a spy tactic.
#58 the Jaguar on 12.10.19 at 7:15 pm
“Ontario bankruptcies and consumer proposals increased by 15.9% in the first ten months of 2019, while Canadian insolvencies increased 9.7%. The pace of growth is accelerating. That is why I believe that this uptick in filings won’t be slowing down anytime soon. This is only the beginning. And if we see a recession, if housing prices fall or stagnate, that opens the risk to a whole new rung of asset-owing Canadians who may need to file insolvency to dig themselves out.”
This excerpt is from “N” who posted an excellent link yesterday (#122), words spoken by a Trustee in matters of bankruptcy.
Unless I am mistaken all the big five banks reported significant increases to loan loss provisions for both the final quarters and year over year provisions. They tried to distract from this by wailing about productivity ratios, but that’s an old ploy that gets dragged out of the closest and dusted off when they want to avoid other conversations.
News reports today indicate BC assessments for the lower mainland will be ‘down’, which supports falling values. Those who wish to consolidate debt into a new mortgages may find it impossible.
You don’t have to be chicken little to see storm clouds on the horizon. I for one firmly believe people who bring these things on themselves need to climb out of the ditch they drove themselves into by their bloodied fingernails, hands and other limbs. Tighten your belt, sell assets if necessary to retire debt, and avoid future economic misadventures with a reality check on what you need versus what you want. Start with you cell phone bill and consider public transportation your new Temple of Salvation.
************
In BC the housing mentality is religion and I don’t think people are looking at the horizon yet. However, those lower property assessments will be the topic at social gatherings over Christmas. Most will say “it is only temporary”. The number of job openings has slowed to nil in some sectors. Lately the news has been covering layoffs from banks and other big companies.
I doubt Christmas sales will falter – people are used to debt and obligated to buy presents.
One thing is for sure, conditions have changed and the trend is down.
Want free education? Convince teachers and to work for free then. Want free housing? Get someone to build you one for free. Go to a dealership and ask for a free car. See what kind of service you will get. Why pay MSP? Get doctors to work for free. Think of all the benefits!
How about when you send debt forgiveness letters, stuff the envelope with bills. A trillion here, a trillion there. Who’s counting?!
How about instead of taxing carbon, just forgive emissions. And forgive GST while you’re at it.
SCM equals who? Not too difficult to figure out. Said it before. Stem, ya sure. Stem you wish. You should admit it, steam.
#8 Cottingham a bargain on 12.10.19 at 4:28 pm
Serious question. If everyone from individuals and governments are in debt , who are they in debt too? Somebody, somewhere ,must be a net creditor n’est pas?
Seriously ,I really want to understand to whom or what all this money is owed too?
+++++++++++++++++++++++++++++
One man’s debt is another’s asset, it is true. It is a “balance sheet” – two sides to the transactions. So many do not understand this simple concept.
When a bank enables a loan, the person who takes the loan has debt and the bank has an asset. When a sovereign gov’t issues a bond to fund operations, the gov’t has debt and the purchaser of the bond has an asset. Quality of assets of course vary.
Who owns the “debt” as assets. Just about everyone with investments or a pension. Mutual funds, ETFs, and hedge funds – owned by individual and institutional investors. Public and private pension funds are probably the largest owners.
You want to cancel the debt? That means erasing one half of the balance sheet. In the case of sovereign debt, like US Treasuries, that would mean the vast majority of global pension funds would then own a big nothing. Overnight they would be insolvent. Poof – no more pension. Not sure that the masses have thought this one through.
Possibly the only debt category that could have this done (technically – not talking morally / fairly) is student debt when the owner of the debt asset is gov’t. In this case, the gov’t basically just takes on this student debt as their additional sovereign debt (or print the money to do so, which is debt financialization, which is the road to currency ruin).
A debt jubilee for the peasants when they owe a few shekels to the king is possible – not so much in a world where debt is 300% of the economy. Not that the politicians and elites won’t try…
https://www.cbc.ca/news/canada/british-columbia/vancouver-budget-day-council-vote-1.5390299
“Council demands budget scenarios providing for 5, 6 or 7% tax increase, instead of original 8.2%”
Cuts are coming
#66 BlogDog123 on 12.10.19 at 7:29 pm
Two people: Jim and Larry:
…
Larry voted for Warren, she won, and Congress passed laws to erase student loan debts.
How is this “fair” that Larry has a $72,000 windfall while Jim’s windfall is somewhere close to zero. Think about it…
+++++++++++++++++++++++++
You forgot to add that Jim, being likely more successful due to his high work ethic and financial sense, is earning more than Larry, and is likely to pay even higher taxes going forward to fund Larry’s windfall…
…but that is OK, because Jim is now paying “more of his fair share”…
“Is it fair to consider forgiving the debt of some dork who overspent and deserves to waste his adult life paying for it?”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
A) This hardly applies to people with medical debt.
B) Student debt is a sham; the powers-that-be saddled the students with debt by requiring people to have ‘pieces of paper’ to be permitted to do what people used to do with no official training (such as eldercare), then they changed the rules to make it impossible for student debt to be dismissed in bankruptcy (this used to only apply in cases of fraud induced debt) so in other words they treat the students like criminals, and then the government knowingly and with malice shipped a huge percentage of jobs overseas while still floating the old myth about how you need to get a university education and then the good life will follow when they knew damn well that the jobs wouldn’t be there.
So for these 2 cases I support debt forgiveness.
#83 Niagara Region on 12.10.19 at 8:06 pm Wow. Pay your debts. Thank you.
So peeps are in a twitter over a little personal info going to StatsCan (https://business.financialpost.com/news/fp-street/statistics-canada-overreached-with-banking-info-collection-plans-privacy-czar) but in the mean time ALL your bank info is leaving Canada via US run apps like your “money manager” (https://craft.co/mx-technologies, the ones behind the Money managers in your bank accounts.), and 2 step verification bank apps based in New York that are using a Spanish app that is used to run the EU one world financials (for some reason I can’t find that one anymore, it’s got military connections like MX).
# 76 WUL
——
Indeed law is still really expensive at the top schools in Canada. What I know best is STEM; computer engineering, EE, data science, comp. science. At UBC the basic tuition is around 7K per year once the fees are included. This is not too bad, considering the high quality training comparable to some of the best U.S. state (public schools) like U.Wash, U. Minn, U. Wisc, UCLA, UCSD.
University is free in Austria.
I don’t know what a tenured English prof actually does
at a research university. Apparently not a high demand
for this.
I do know tradespeople and tech school grads (2 yr diploma) that make six figure incomes.
#57 Bunny, did you fall and hit your head? If you are paying any tax you’re likely in need of serious counselling. Stop paying tax. It’s really that simple. Don’t contribute, period. Stop working past the point where the clawback begins, what’s the point of working for nothing? Starve the beast.
Always the responsible one will have to pay for other people’s folly. This is how the ‘system’ works.
As for debt jubilee, it is highly unlikely, most likely some form of further ‘guarantees’ (CMHC like), further expansion of’ ‘joint ownership’ will be implemented or direct purchases of debt by central banks.
With loans not based on savings, but on credit demand the banking system is turned upside down and whatever we call ‘money’ has very little to do with it’s historical predecessors.
The biggest problem of course is the debt saturation combined with over-extension of consumers and peak taxation, with the (constantly decreasing) taxpayers being on the hook for everything, there is little room for further wealth extraction out of increasingly poorer people.
We most likely live in times of max. real valuations that won’t last long. Something’s got to give, most likely the currency.
Cheers,
#65 IHCTD9 on 12.10.19 at 7:27 pm
#55 Tater on 12.10.19 at 7:11 pm
#40 IHCTD9 on 12.10.19 at 6:28 pm
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
—— –
That’s one dumbass “problem”.
Pull the lever and save 5 living people, the dead folks don’t care what you do.
My Cat could have figured that one out.
——————————————
And if your cat were looking up he’d see the point, cause it was about 2 feet over your head.
—
Oh, I know what SS’s “point” is.
Let’s see if he/she takes the bait (you sure did).
————————————
Congrats on the posting history that gives the impression you’re thick enough to not.
Time out.
The Jubilee of the Bible/Torah was not about securing a King’s head or about creating a thriving economy. It was a tradition of celebrating freedom every 50th year for all people. Farmers stopped farming for two years (the sabbatical 49th and the jubilee 50th).
It was about acknowledging that all blessing flowed from God, and furthermore, if we’re all God’s children, then we’re all equal. Back then it was popular to sell yourself into slavery (if that’s a tough word for the wimps here… “SERVANTHOOD”) to make money to feed/provide for your family and contribute to your house hold.
A way for the religious leaders to ensure generational/lifelong slavery was not a thing was to induce a year of freedom where all slaves were permanently released to be forever with their families and spend what they had earned (it’s like modern day retirement after 35 years of working).
What the Dems want down south and what Trudeau is trying to do is nothing akin to Jubilee. It’s a shameless cop out for irresponsible adult children.
ps
Ref: Leviticus 25:8-13. More info in chapter 27.
ciao
@#115 DON
“Council demands budget scenarios providing for 5, 6 or 7% tax increase, instead of original 8.2%”
+++++
Ahhh yes.
The old bait and switch.
Tell the sheeple for weeks you are raising taxes 8.2 %.
The taxpayers yell, scream , rant, and rave.
Then the city Clowncil magnanimously announces that instead of the dreaded 8.2% they will raise taxes 6%…which is what they intended all along.
The taxpayers think they “won”.
But, in reality, they now pay another 6%.
The city needs more gender fluid public washrooms.
How about debtors’ prisons?
Yah.
Build mega prisons and load them up with everyone who can’t pay the money they owe.
Sentence lengths are correlated to the amount owing.
The debt disappears when the time served is finished.
While inside, the prisoners will work in a production facility that the prison actually is. Making widgets of some sort.
In the meantime, it creates a boon to the construction industry (building multiple facilities to incarcerate the deadbeats), and stimulates employment (hiring prison guards, wardens, various staff, suppliers, production supervisors, etc).
Oh…wait…it’s already being done, en masse:
https://www.sentencingproject.org/publications/capitalizing-on-mass-incarceration-u-s-growth-in-private-prisons/
#121 Ponzius Pilatus
University is free in Austria.
——————————————————————–
This is the result:
https://www.youtube.com/watch?v=swlMkW4Wdjg
Meet Miss Pricing.
If a typical two-three bedroom condo in a middling Air B&B building runs to $1.5 million is this absolute mansion worth 8 times more? H-ll Ya! Moreso
What a deal compared. Look at it. 12 million here
https://trnto.com/toronto-house-for-sale-42-wimpole-dr/
Oh and if you own a condo in BC…. get ready for exorbitant insurance rate hikes….
https://www.narcity.com/real-estate/ca/bc/vancouver/bc-condo-insurance-is-skyrocketing-from-50-to-300
Deductable amounts on claims are also expected to climb from 25k to 150k or higher…..
Geez, renting is looking better all the time.
#23 SunShowers on 12.10.19 at 5:30 pm
Great post today, Garth!
“But wait. Is it fair to consider forgiving the debt of some dork who overspent and deserves to waste his adult life paying for it?”
This has been one of the biggest arguments against student debt forgiveness, and has been dubbed “The Boomer Trolley Problem.”
The original Trolley Problem, which remains a hotly debated philosophical concept to this day, discusses whether or not it is ethical to divert a trolley onto a track where it will kill 1 person tied to the track, in order to save the lives of 5 people tied to the original track further down.
The Boomer Trolley Problem discusses whether diverting the trolley from a track where 5 people will die further down the line to a track where ZERO people will die would be fair to the people who have already been killed by the trolley before you got to the switch.
It’s not a hard problem to solve.
Which track are you on? – Garth
*******
Don’t wait for an answer Garth, go with this creative approach:
https://www.youtube.com/watch?v=-N_RZJUAQY4
I don’t think forgiving student loan debt goes quite as far as a basic income; more like “free” public education. We already have “free” public healthcare, so it’s not *that* crazy.
Canadian governments have regularly provided large grants to forgive student debt in the past (Canada Student Grants). Coming from a poor family, it made an immense difference when I graduated from university.
Public policy that promotes opportunity and productivity, even if it comes with an economic cost, isn’t full-blown communism.
Crowdie, you’ve got some competition.
Next time I go up to the Yukon, I’m taking this guy with me…
M45BC
Bloke who kills mosquitoes within 6-mile radius with his farts probed by experts.
https://www.dailystar.co.uk/news/latest-news/bloke-who-kills-mosquitoes-within-21073848
#122 Dr V on 12.11.19 at 1:13 am
I do know tradespeople and tech school grads (2 yr diploma) that make six figure incomes.
___
Yep. most dudes outside of the metros that make big bucks are Tradespeoplekind.
It’s going to keep on like this too – we can barely get an apprenticeship done here without the guy getting offers from other businesses. Tough to retain them, you have to keep anteing up more $$.
I used to spend a lot of money on clothes when I was younger.
Nowadays, don’t spend much at all.
I wear whatever keeps me warm enough in winter, and from getting arrested from indecency in the warmer months.
I am not a man of the cloth….
M45BC
“This Visualization Shows Where Your Clothes Come From.
Think about the last time you checked the clothing tag on a new shirt that you bought. Did it say, “Made in China”? Or how about Vietnam or Bangladesh? There’s a good chance that your new shirt was manufactured in another country, especially one in east or south Asia. Our latest visualization takes a closer look at how clothing exports vary around the world.
In 2018, the value of the global clothing export market was $494 billion, an increase from $464.6 billion in 2017.
However, this growth was not seen across the board. Some of the countries that experienced declines in clothing exports from 2017 to 2018 include India (from $18 billion to $17 billion), the Philippines (from $1 billion to $933 million), and Hungary (from $870 million to $791 million).
At the same time, other countries experienced massive increases in clothing exports. Clothing exports from Myanmar and Armenia increased by about 70% from 2017 to 2018.
At $158 billion, China alone accounts for almost a third of the world’s clothing exports.
Top 10 Countries by Clothing Exports
1. China: $158 billion
2. Bangladesh: $33 billion
3. Vietnam: $28 billion
4. Italy: $25 billion
5. Germany: $24 billion
6. India: $17 billion
7. Turkey: $16 billion
8. Spain: $15 billion
9. Hong Kong, China: $14 billion
10. France: $13 billion
As you can see, the value of China’s clothing exports is almost five times higher than the value of the second-highest clothing exporter, Bangladesh. This isn’t surprising, since China beats all the competition in overall exports. The U.S. in particular relies heavily on exports from China. China was the United States’ largest supplier of imports in 2018, providing $557.9 billion worth of goods. Notably, U.S. imports from China fell in September. “
#94 Remembrancer on 12.10.19 at 8:52 pm
#50 IHCTD9 on 12.10.19 at 6:54 pm
#20 Retired in Kelowna on 12.10.19 at 5:20 pm
Yep, its easy to find documented cases of people in positions of trust selling this information on the side – ie from maternity wards…
___
Ms IH and I were a little peeved as there was only one way the advertiser could have got our personal info – it was willing sent to them by the damn Hospital!
Stan, how long can you ignore the call to lead this great land of ours? We need you sagacious views in Ottawa and not wasted on this blog (albeit and important blog run by a bearded financial sage…).
If you forgive student debt then universities and the businesses associated with them will see an opportunity to raise tuition, book prices, etc. knowing people will care less about the “sticker price” in anticipation of the next forgiveness cycle. This will make the next debt forgiveness scenario twice as bad.
People need financial literacy in this country not debt forgiveness. Part of financial literacy comes from working crappy part time jobs while in school and appreciating the value of a dollar. Too many people i went to school with were “focused on studying” and i noticed their spending habits were out of line (i.e. eating out nightly, buying the latest and greatest tech). These habits have followed these people into their early adult lives and have them trapped in the credit cycle.
DELETED
Not sure I understand all of the focus on appraisals. I mean, who cares, appraisals have always been rough estimates. Homes almost never sell at the appraisal value. In FOMO markets they sell way over, and in corrections well under.
No one in YVR should be blown away by a lower appraisal. Anyone who has paid any attention knows homes have been selling under appraisal for a few years now. They know what their neighbors homes were listed and sold for.
Last, people again are making the mistake of thinking that everyone bought in at peak. If you surveyed a typical block in YVR you would find that maybe 1 person out of 20 bought around peak. Average time a person owns a home is 10 years, so most of the guy that bought a peak’s neighbors have been in since 2008. That homeowner is up 2x so is not going to lose his mind over a 10-15% decrease.
Keep in mind CDN homeowners have 6T equity on 1.6T in mortgage debt.
If the gov decides to start forgiving student debt – then they might as well just make it free for everyone and send the bill to the taxpayer. We’re paying for it either way, and the later scenario at least removes the ability for the government to chose who gets forgiven, and who doesn’t.
Free post secondary education would also allow employers to hire well schooled employees with multiple PhD’s at a fraction of the salary they used to command.
Banking and Money Creation
#103 Blacksheep on 12.10.19 at 9:51 pm
Reminder: Chartered banks have the legal right, based on only a mortgagor’s signature, to create new ($) funds (or deposits, as Shawn prefers) from nothing. This happens on a daily basis and is the fundamental way 97% of monies (vertical?) in the system have been created.
Why can’t a sovereign government do same?
Disclaimer: This, is not not a sinister system. It fuels our capitalistic economy. Sourcing ($) for whatever reason, without this chartered bank system, would mean funds would be much more stringently dispersed, based on the lending party having to lend out, their own, hard earned funds whether institutional or not.
*********************************
Nice disclaimer.
Would or could a system of borrowing from a sovereign government bank be any different?
In Alberta, the Alberta government owns a large bank. Called the Alberta Treasury Branch. Its loans and money creation work like any other bank.
Warren Buffett calls dollar bills a “claim check” on goods and services. Having money means the economy owes you something. Money is and always has been credit. Even gold money. A piece of gold was entitled to claim an amount of goods and services as set in the market. Government printed money I guess could be thought of as a credit on income tax. You can use their paper to pay owed income tax.
The nature of money will not change.
Bit Coin can be loaned out on a fractional reserve basis to create more bit coin. If Bit Coin became a popular currency banks would simply lend bit coin on a fractional reserve basis.
Governments might tinker a bit with student loans but there will be no general debt forgiveness. Ever. Thankfully.
I do think it is outrageous that student loans are not wiped out on bankruptcy. I mean, how many graduates would choose that stain on their record anyhow?
In general, debtors can declare bankruptcy and start over. It’s painful. But it is a needed and valid option.
Closing PayDay loan shops would be strongly opposed by one group: It’s borrowers who would then turn to credit cards or loan sharks.
https://www.theglobeandmail.com/real-estate/vancouver/article-armed-with-new-data-bc-set-for-crackdown-on-tax-evasion-in/#comments
Toronto & Ontario – What you waiting for??
Gold Money
P.S. When money was backed by gold, there was still a system of fractional reserve lending. It simply can’t be prevented. It’s a rational market response.
People paid with paper certificates representing gold on deposit. But more paper than gold existed. Lots more.
#131 crowdedelevatorfartz on 12.11.19 at 8:28 am
Oh and if you own a condo in BC…. get ready for exorbitant insurance rate hikes….
https://www.narcity.com/real-estate/ca/bc/vancouver/bc-condo-insurance-is-skyrocketing-from-50-to-300
Deductable amounts on claims are also expected to climb from 25k to 150k or higher…..
Geez, renting is looking better all the time.
————————————————————
Ahhhh….who do you think it going to eat the cost of those increases in a rental building? Call me crazy but if the cost to operate these buildings goes up across the board I’d bet renters will pay for it. If not initially, over time.
#122 Dr V on 12.11.19 at 1:13 am
I don’t know what a tenured English prof actually does
at a research university. Apparently not a high demand
for this.
______________________________________
Yes, there is a huge demand for English courses: English is the second largest major in the US, while Psychology is the first. Most people have no idea what an English professor does. Here is a small sample of what English professors typically teach students:
-how to write in ways that accurately convey their ideas;
-how to speak effectively both in public and in boardrooms;
-how to efficiently research authoritative material in their areas of interest;
-how to read/listen to a CBS, CBC, or BBC news report and detect contradictions, gaps in a story, and outright lies;
-how to identify a conventional set of ridiculous claims that colonizing countries have routinely offered over the past several hundred years when they wish to colonize a weaker country;
-how to quickly identify misrepresentations in a speech by a politician, boss, or anybody else;
-how what happened in the past shapes relations among groups at the current time; and
-how “Tradition” is continually changing and serves to support specific interests at any given moment.
This is just the tip of the iceberg. One area in which English professors (and most other types of professors) fail is that the general public does not know what they do. Hence, professors deserve an “F” in public relations.
#137 IHCTD9 on 12.11.19 at 10:02 am
#94 Remembrancer on 12.10.19 at 8:52 pm
#50 IHCTD9 on 12.10.19 at 6:54 pm
#20 Retired in Kelowna on 12.10.19 at 5:20 pm
Yep, its easy to find documented cases of people in positions of trust selling this information on the side – ie from maternity wards…
___
Ms IH and I were a little peeved as there was only one way the advertiser could have got our personal info – it was willing sent to them by the damn Hospital!
—————————————–
I know a few years back there were support staff from an eastern GTA hospital charged for taking money in exchange for intake info under the privacy laws so not surprising it happened to you too.
But hey, we’re on the verge of the 3rd decade of the 21st century, I’d bet the hospitals will get you to sign a release before long to sell the info themselves along with offering long term loans for daily parking permits.
https://www.durhamregion.com/news-story/4800682-more-than-6-000-new-mothers-at-ajax-pickering-hospital-may-have-had-privacy-breached/
A debt jubilee means that not only is debt expunged so is all the Canadian fiat as it is backed by debt and not gold or silver. Instant cashless and cyber cashless society.
Then again it also means no means of exchange, no economy and no means to pay tax. One would be confronted with the challenge of how to jump start the economy and have credibility.
@#135 IHCTD9 on 12.11.19 at 9:47 am
#122 Dr V on 12.11.19 at 1:13 am
I do know tradespeople and tech school grads (2 yr diploma) that make six figure incomes.
___
Yep. most dudes outside of the metros that make big bucks are Tradespeoplekind.
It’s going to keep on like this too – we can barely get an apprenticeship done here without the guy getting offers from other businesses. Tough to retain them, you have to keep anteing up more $$.
___________________________________
Yup, all my friends in the trades make good $$.
Work as much as they want to and when they want to.
I somewhat regret not going this route as a kid.
Never to late though.
#15 Fortvna on 12.10.19 at 5:01 pm
When debt has been incurred for education then forgiveness sounds fair to me, but I’m biased. I left school heavily indebted despite working as much as I could throughout, and I’m still in debt now, nearly a decade later.
The pursuit of an advanced degree in particular takes a lot of time, time which could be spent working and saving, so there is already some economic disadvantage suffered by studying away. School loans on top of that means that you are really far behind before you’ve even started.
School debt is not like consumer debt. Pretty tough these days to do much without a pricey education.
—-
You’re ignoring the benefit of the education, which SHOULD (if you chose correctly) lead to HIGHER earning potential, in the long run.
Your short term pain is the result of your choice. Your long term gain is also the result of your choice. If your education isn’t paying for itself, you (unfortunately) chose poorly.
You can’t expect others to pay for your pain and not participate in your gain.
I did an engineering degree – six years of schooling, as it was part of a mandatory co-op program. My brother, on the other hand, went straight to the oilfield and started making $70K-$100K a year with no post-secondary education. He had the nice car, nice clothes, etc, and I was slaving away in school.
Fifteen years later, I’m well ahead, thanks to more stable employment, transferable skills to multiple industries (I’ve worked in oil and gas, aerospace, mining and forestry) and a higher salary with lower working hours. I have a much better work/life balance. He eventually transferred to another industry and makes great money but again, works long hours and plenty of overtime.
Again, short term pain (relatively speaking) for long term gain.
Can you make as much or more money in the trades or as a worker in harsh environments? Yup. Working the same hours? Nope, unless you own your own business, in which case the stress will double or triple (along with the financial gain).
Debt isn’t necessarily a moral obligation. It can be thought of as an agreement on future value. If the asset backing the debt is worthless or close to it, even the creditor may be better off settling. The only thing to be said for sure re debt though is that it means lower consumption in the future. So today’s health care is being paid at the expense of tomorrow’s, short of huge economic growth to inflate out the debt (which has its own problems) or defaulting on sovereign debts entirely, which I think is in essence what will need to be done.
Was at Alberta Fair Deal Panel last night in Calgary.
Wow, people in Alberta are right pissed off.
Event sold out but there were empty seats. Rumour is that the lefties are signing up online and then not attending to show empty seats.
Lefties are such knobs.
Sat in front of a group of Rachel lovers. Rather than applaud the speakers they agreed with, they chose to hoot and yelp their agreement. Golly they are so special.
This ticked off a lot of other attendees, but likely that was the goal. At the break I told them perhaps to use their jazz hands to show their approval.
Folks are tired of the talking and want some real action.
Jason Kenney needs to beware. If there is no real action coming from idiots in Ottawa, Albertan’s will find leaders that will do their bidding. This came out loud and clear at this forum.
In his recent meeting Kenney says that Trudeau was “responsive on a number of points.” Funny. Being responsive is one step up from brain dead.
I think that Kenney was just being politically correct.
It’s quite obvious that T2 truly is functionally brain dead.
#83 Niagara Region on 12.10.19 at 8:06 pm
My spouse has a PhD in English and is a tenured professor at one of the most well-respected research universities in the US. Unfortunately, professors in the US are generally paid very poorly, with the exceptions of an increasingly narrow number of fields (e.g., medicine). Funding cuts to universities have been brutal in the US. My spouse is lucky because he has full-time, permanent work, albeit with a poor salary. Over 75% of faculty at American universities (averaged across the disciplines and across universities) are on temporary, usually part-time contracts, making only about $3,500 US per course, even though undergraduates are paying as high as $80,000 US per annum for tuition plus residence. Public American and Canadian universities have been decimated by declining governmental funding over the past 25 years. Apparently politicians no longer think that an educated citizenry is a worthwhile investment. When government funding declines, student-loan debt rises.
—–
While I feel your pain (my brother-in-law did something similar), the idea of spending $150K on an English doctorate is insane. There’s no way you’d ever get the dollar value out of it, which really means that your spouse chose this out of a love for that type of work. As such, this one’s on him (and you).
It’s all well and good to chase your passions but there’s an element of common sense that should stop a person from spending that kind of money on a degree that will never pay for itself. Even in the best of years, that degree would never pay for itself for decades.
Consider that a doctor spends only $50K more AND pretty much has a guaranteed salary of $150K a year anywhere in North America. Ever look up the average salary of an English teacher? It ain’t $150K! It isn’t even $50K in many places.
Rargary, this is so true. I am a credit counselor and see that roughly 70% go back to going into debt with credit cards and lines of credit seem the most popular debt they choose.
This is in my credit counselor’s firm I work for. I noticed also that the myth or misleading information that most of credit card debt is used for living expenses, necessities. This is not true, I have found that out of that 70% that goes into debt deeper and deeper after bankruptcy or consumer proposal that only 20% are really in a low income, high living expenses situation. Every 100 past clients, 70 go back to going into debt again and of that 70 only 14 are in desperate, dire financial situation that they need to feed themselves, their kids, paying rent etc.
Their income is too low or their hours are not enough with some part-time jobs that are low wage or a wage that just short of their basic needs. Bankruptcy is a form of debt forgiveness but higher interest rates, fees and getting less, lower credit limits is a cost of this debt forgiveness, debt jubilee.
Many of my clients have kids and wives that don’t want to live in reality and make good choices instead of they want it now and who cares about the cost. This is all a problem of personal behaviour and personal responsibility. This is what it all comes down to it. Forgiving debt is the worse idea because it precisely sets a bad precedent and rewards a destructive, debt ridden society much worse.
Bankruptcy is the last resort advice, I advise my clients and consumer proposal is the most used in my 15 years of experience. I would say 18% to 30% credit card rates do make it very difficult for my clients to pay down their credit card debt. If rates were just 5% to 10% lower, most of my advised clients could pay off their debts in 24 months to 36 months and be debt free.
#140 Jenny Wang on 12.11.19 at 10:35 am
DELETED
Poor Jenny, almost more deletes than Smoking Man.
Anyone up for a go fund me for her…she needs a spa day or a massage or something, eh?
im sad in some ways i went to school, i know things, and know i dont know lots of things.
if i didnt go, i wouldnt be as smart and probably happy, and maybe richer in a variety of ways.
Garth – are you tilting your equities away from Canada and towards the US?
#150 oh bouy on 12.11.19 at 12:46 pm
Yup, all my friends in the trades make good $$.
Work as much as they want to and when they want to.
I somewhat regret not going this route as a kid.
Never to late though.
____
I also think I would have been better off in a trade. I tried twice, but it never panned out. Now I am stuck in an office.
These days I run out on the floor to beg these dudes to work a little OT, or a Saturday or two to keep my customers happy. The old guys laugh, the young guys usually take it.
2 weeks from now the guys are off for Christmas and it’s paid. If they get called in, they get double time on top, ie they’d be working for 3X the money essentially.
This is where these guys really bring home the bacon.
To Jon Boy #154
It is extremely difficult to predict what occupations will offer a financially secure future and which ones will not. Like many working-class occupations, a lot of middle-class occupations are now becoming de-professionalized, fractured into part-time, temporary work with poor pay and few benefits. In the 1980s and 1990s when many current professors were earning their credentials, no one realized that higher education would become massively underfunded in Canada and the US and that the faculty workforce would be modeled after McDonald’s labor force. Other seemingly secure middle-class occupations are next . . . that is, unless workers fight back en masse.
With all this debt seemingly everywhere, why doesn’t this high demand for money result in higher interest rates?
#154 JonBoy on 12.11.19 at 1:19 pm
#83 Niagara Region on 12.10.19 at 8:06 pm
My spouse has a PhD in English and is a tenured professor at one of the most well-respected research universities in the US. Unfortunately, professors in the US are generally paid very poorly, with the exceptions of an increasingly narrow number of fields (e.g., medicine). Funding cuts to universities have been brutal in the US. My spouse is lucky because he has full-time, permanent work, albeit with a poor salary. Over 75% of faculty at American universities (averaged across the disciplines and across universities) are on temporary, usually part-time contracts, making only about $3,500 US per course, even though undergraduates are paying as high as $80,000 US per annum for tuition plus residence. Public American and Canadian universities have been decimated by declining governmental funding over the past 25 years. Apparently politicians no longer think that an educated citizenry is a worthwhile investment. When government funding declines, student-loan debt rises.
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While I feel your pain (my brother-in-law did something similar), the idea of spending $150K on an English doctorate is insane. There’s no way you’d ever get the dollar value out of it, which really means that your spouse chose this out of a love for that type of work. As such, this one’s on him (and you).
It’s all well and good to chase your passions but there’s an element of common sense that should stop a person from spending that kind of money on a degree that will never pay for itself. Even in the best of years, that degree would never pay for itself for decades.
Consider that a doctor spends only $50K more AND pretty much has a guaranteed salary of $150K a year anywhere in North America. Ever look up the average salary of an English teacher? It ain’t $150K! It isn’t even $50K in many places
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While I feel for the poor English Teachers pay scale
that certainly explains quite a lot about our resident malformed court jester Smoking Man.
I have no f%cking idea of what language he pens half the time. I am rationalizing that he may truly be an idiot savant? “The struggle is real Old Man”
This Babylon story happened 5000 years ago and we have tons of debt that will buy things?
My guess is that many leaders have read the Bible and thought debt was a good idea.
But debt 5000 years ago was debt closer to the “mean” now debt is: forget the “mean,” forget the neighbour and do whatever to make big profits in selling the house (a commodity, not a home). And now surviving.
Debt is not the answer and banks should have been more responsible for the people.
Who should we save in the joke above? I would say we are not God. We do not have the power to control. The people you save may not be the people leading.
147 Niagara – I know a lot of people with many of those
skills that never took English beyond first year (and only then because it was required) though I may have enjoyed some of those topics.
#160 Niagara Region on 12.11.19 at 2:33 pm
To Jon Boy #154
It is extremely difficult to predict what occupations will offer a financially secure future and which ones will not.
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I’ll make it easy. These occupations will offer a financially secure future:
Doctor
Engineer
Lawyer
Electrician
Plumber
Dentist
#160 Niagara Region on 12.11.19 at 2:33 pm
To Jon Boy #154
It is extremely difficult to predict what occupations will offer a financially secure future and which ones will not. Like many working-class occupations, a lot of middle-class occupations are now becoming de-professionalized, fractured into part-time, temporary work with poor pay and few benefits. In the 1980s and 1990s when many current professors were earning their credentials, no one realized that higher education would become massively underfunded in Canada and the US and that the faculty workforce would be modeled after McDonald’s labor force. Other seemingly secure middle-class occupations are next . . . that is, unless workers fight back en masse.
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How about looking at the current salary for a job you’re planning to obtain? Does that seem reasonable? English teachers/professors have NEVER been paid enough to warrant $150K in student loans. If you can’t pay of student loans inside of ten years, you’re probably picking the wrong career.
Sure, some jobs have been eliminated or marginalized over time due to technology but others will be needed indefinitely. An electrician, for instance, may have to keep updating their knowledge but we’ll need them for the foreseeable future. Auto mechanics will be needed for a long time, even if the technology changes.
English teachers will be needed indefinitely. Their salaries certainly haven’t grown much but they were never large enough to really expect payback on a loan of that size. That’s more my point – the job didn’t go away, nor did the need, but the salary was never going to justify that kind of loan…
I don’t mean to give you a hard time but I’m struggling to see how you could have ever foreseen your spouse’s career providing payback on such a massive loan. I feel for you but I don’t think the blame is anywhere but in the mirror.
#73 Andrew on 12.10.19 at 7:38 pm
When Japan initiates the first debt jubilee it will be impossible for all other fiat currencies to resist. The faith will rattle and the separation of money and state may occur.
Buy bitcoin.
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Found the HODLer
Niagara Region, my fiends thought my wife and I were crazy for just getting our high school diploma 10 years ago and not going to college or university. They have not much higher salaries, gross pay that you think someone has gone to college or university compared to us, $108,000 to $112,000 a year as a couple together but are still $75,000 in student loan debt combined and have $10,500 in credit card debt, $44,000 in used auto, car debt resulting in $750 a month in monthly car payments. I doubt they can save much as they are renting a bigger place then us and have 2 kids as well. They have almost $130,000 in total debts.
We have now working 12.5 years in mostly part-time jobs, 2 for me and 3 for my wife. We work in mostly restaurant and cleaning services industry.
We work each between 48 to 55 hours a week each so maximum 55 hours a week. We get mostly 4% vacation pay so nothing more than the labour laws state. We have no major benefits except 25% discount on in restaurant meals and we get combined a $1,000 year end bonus.
We take home gross $88,000 to $90,000 a year. We have 2 children and after our taxes, C.P.P. E.I. etc., rent, food, clothing, one car we own only no debt, no car payments, it is fully paid off , gas, insurance, maintenance, repairs, public transportation everything else etc.we are left with $3,400 a month in savings this past year.
We have managed to make the maximum TFSA’s contributions and have now $152,300 in TFSA’s, put the maximum in RRSP’s contributions now having $167,200 in RRSP’s, reinvesting the yearly RRSP contributions giving us more money in $35,000 in savings accounts, $45,700 in laddered GIC’s.
We have no debts for years, no credit card debt, no student loan debt, no auto, car debt etc. and have almost $400,000 in investments, savings, TFSA’s, RRSP’s. My wife just got her hours extended at the restaurant she works so now she can do less commuting and make an extra $3,000 a year in yearly wages.
The whole point of my story here is, being wise with one’s resources and time will always win out believing that the only option is following the herd. People are not wise today but are over educated and follow the crowd, herd without really questioning and thinking before anything these days before making real, long term life decisions that can cost a whole lot of money, time. Think critically people, really think before you act.
Look at people that are on government assistance and get all or most of their rent subsidized, paid, food assistance, clothing assistance, H.S.T. credit, child tax benefit(CTB) if they have kids, daycare or childcare assistance, dental, pharmacare benefits etc. end up at the end of day just poorer.
The main reason is they don’t get to keep or spend, invest that so called free money because it is assistance. The so called poverty or helping the poor framed by them, Liberals, NDP others is big business through government and organization like NGO’s, non-government organizations which really are helped by governments through special tax free, tax advantaged policies.
They have fooled and duped alot of people and are making out like bandits. Really think about it people.
Sure. Life’s a picnic for low-income-earners. Would you trade places? – Garth