Personal debt and government cutbacks

November 16, 2012 by
Filed under: Bank's Profits, Bankruptcy, Debt Management, debt relief, taxes 

First, let me emphasize that I am not an accountant or a financial analyst of any sort. I’m merely an individual who has gone through bankruptcy herself, and recognizes the value of the range of strategies that are individually available when it comes to debt.

Then, let me say that it makes a lot of sense to me that in times of financially difficult times (ie recessions and depressions), that government increases its spending, thereby stimulating growth in the economy. When governments spend (infrastructure development, social supports including mental health support), people have jobs. When people have jobs, they spend money. When they spend money, the economy is stimulated, more taxes are paid (and collected) and so on.

In times of financial distress, the job of government is to spend, not cut. See this short clip of Daniel Altman, a Chief Economist with Big Think, or the video by John Green that I recently blogged about.

I’ll grant that it’s not that easy. There are experts on both sides of the debate.

But this is what I see:

Governments are cutting jobs. The Canadian government recently “boasted” cuts of 11,000 through early retirement and collapsing vacant jobs. That means we are LESS millions of dollars in the economy. Mortgages haven’t collapsed, nor have university tuitions, nor has the “basket of goods” used to estimate poverty. Gas prices continue to rise. Conequently, there is increased debt.

It can be said that these debts are mini-stimuli for the economy, but personally I don’t believe that that is a burden that should fall to the individual.

I think we need NEW leadership. When governments DON’T spend during economic downturns, the financial simuli comes from increased individual debt that SOLELY benefits the banks.

Until that time comes, Canadians need to get informed of what their REAL options are when it comes to resolving their debt.

Contact me. I can give you an unbiased birds-eye view of your options.

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