# COVID debt, default, and forgiveness.



## sags (May 15, 2010)

There are many discussions on government spending on COVID, that involve everything from the size of the debt, to what the future may bring.

Some say the debt will be paid through inflation. Others say taxes will be raised. Many think it will be paid by future generations.

There are problems with each solution. Governments need to find the solution which will cause the least amount of damage.

Raising taxes.......coming out of an economy in deep recession, this is a very bad idea. It would address the symptoms by killing the patient.

Inflation.........this solution would depend on runaway inflation, which would also be a death knell for a recovering economy.

Default.........this is a likely scenario for many if the crisis lasts for an extended period of time. Already people who had to defer payments are in default.

Bankruptcy........is the end result of defaults.

Debt forgiveness.........the result is similar to defaults and bankruptcies.

The main difference between default/bankruptcy and debt forgiveness is the ability of the government to manage them.

Either method achieves the economic goal of washing away debt so the economy can begin the rebuilding process.

In my opinion, structured debt forgiveness is the best of the options available to governments. We shall see which path they take.

A few months ago a concept such as debt forgiveness was unthinkable, but so was the current situation in which we find ourselves.

Everything is on the table now.


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## Longtimeago (Aug 8, 2018)

I do not agree with forgiving any debt anyone incurs. You owe it, you pay it.


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## sags (May 15, 2010)

In dollars and cents, it should be considered that although the CERB is a large amount of government spending, it only covers until July.

Although the CERB benefit of $2,000 is large in comparison to any previous programs, it represents less than the wages from a minimum wage job.

Many couples receiving even double benefits are unable to pay all their bills, on what is effectively the income from two minimum wage jobs.

They are steadily edging closer to the brink of financial disaster.


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## sags (May 15, 2010)

Longtimeago said:


> I do not agree with forgiving any debt anyone incurs. You owe it, you pay it.


So you think it is better to let the dust settle where it may ? That would mean you prefer the default/bankruptcy scenario ?


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## MrMatt (Dec 21, 2011)

sags said:


> So you think it is better to let the dust settle where it may ? That would mean you prefer the default/bankruptcy scenario ?


Bankruptcy IS debt forgiveness. It's the same darn thing. 

What is the difference between
A. A borrower telling the lender they will not pay them back, and the Government preventing them from pursuing that debt.
and
B. A borrower telling the lender they will not pay them back, and the Government preventing them from pursuing that debt.

I've asked this before, what if your borrowers decided to default, bankrupt, or have their debts forgiven?
Are you really okay with them just saying "all those things you thought you had, you don't"
Your bank balances, contracts, "investments", gone, every single one of them.

I think your "plan" is to "structure" so that all debts, except those owed to sags are forgiven.


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## sags (May 15, 2010)

Low income, part time and some gig workers may be okay financially with the CERB for as long as it lasts.

The wealthy don't need the CERB benefits at all. They are isolated from financial hardship.

It is the middle class, people with average or better wages, mortgages, kids.......who will suffer the most.

They are the same group that propels the economy forward. Remove the middle class and the economy will collapse affecting everyone.

It isn't as simple as saying you don't approve of debt forgiveness. What are the other options ?


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## Longtimeago (Aug 8, 2018)

There is no default/bankruptcy if you pay your debts sags. I believe in being responsible for your own actions. Personally, rather than giving people $2000 each, I would LOAN them the money and expect them to PAY it back.

How a person or a business get themselves into trouble is their responsibility. I am paying all my monthly bills including a large income tax installment last month. I MANAGE my finances and do not live month to month. 

I look at those who will be paid CERB and ask 'where are your savings for rainy days?' I am willing to bet that many of those defaulting on their rent will be using their CERB handout to pay for their smartphone, tv, internet, etc. Their priorities are all wrong.

In a time like this, there are only 2 things we NEED, shelter and food. So you pay rent FIRST and if that means you have to give up your phone service, so be it. You buy groceries and if that means you have to give up your internet and tv service, so be it. 

People and businesses who cannot weather a storm are responsible for themselves. But if someone else bails them out, they learn nothing except that it is OK to live in debt because someone else will bail them out.


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## Longtimeago (Aug 8, 2018)

sags said:


> Low income, part time and some gig workers may be okay financially with the CERB for as long as it lasts.
> 
> The wealthy don't need the CERB benefits at all. They are isolated from financial hardship.
> 
> ...


The middle class have no reason to have ANY debts at all other than a mortgage sags. You seem to accept that it is OK for them to go into debt to buy something that they actually cannot AFFORD to buy.

The 'other option' you are asking for sags is to not go into debt.


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## sags (May 15, 2010)

Too late for that option LTA. The cards have already been dealt. Lessons on morality are redundant at this point. I have no control over other people's spending.


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## MrMatt (Dec 21, 2011)

sags said:


> Too late for that option LTA. The cards have already been dealt. Lessons on morality are redundant at this point. I have no control over other people's spending.


Okay, so we can't control their decisions.
Can we at least let them face the consequences of the decisions so they make better ones next time?
At least some minor consequences.

Lets be clear, this was all obvious, with pretty much every financial expert, at every level, saying that having large amounts of debt was a problem.
We're now facing that problem. This wasn't a surprise, people have been predicting this since the last crisis.

There are only a small number of ding-dongs that were saying high debt levels weren't a problem.


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## Longtimeago (Aug 8, 2018)

sags said:


> Too late for that option LTA. The cards have already been dealt. Lessons on morality are redundant at this point. I have no control over other people's spending.


I realize we have to deal with 'what is' rather than what we wish was sags but people being people, most do not learn their lesson unless they suffer the consequences as MrMatt suggests. IF they get any kind of 'forgiveness' all they learn as I said is that someone else will take care of them.

I'm thinking of the poster here Just A Guy who has told of how he ended up broke and out of work and vowed never again to have to rely on anyone else for food on his table. He learned what was no doubt a very painful lesson. You only need to learn a lesson like that ONCE to never let yourself get into such a situation again.

So take your middle class average person who can't pay their debts, foreclose on their condo, repossess their car bought on credit, take away their credit cards and then MAYBE just maybe I would agree to saying, 'OK, we'll clear the slate and let you start over with no debt. Here's your job back, go find a place to live, buy groceries, walk to work or take public transit and start over.'


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## sags (May 15, 2010)

It will be interesting to return to this thread in July and see what the future brings.


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## MrMatt (Dec 21, 2011)

Longtimeago said:


> I realize we have to deal with 'what is' rather than what we wish was sags but people being people, most do not learn their lesson unless they suffer the consequences as MrMatt suggests. IF they get any kind of 'forgiveness' all they learn as I said is that someone else will take care of them.
> 
> I'm thinking of the poster here Just A Guy who has told of how he ended up broke and out of work and vowed never again to have to rely on anyone else for food on his table. He learned what was no doubt a very painful lesson. You only need to learn a lesson like that ONCE to never let yourself get into such a situation again.
> 
> So take your middle class average person who can't pay their debts, foreclose on their condo, repossess their car bought on credit, take away their credit cards and then MAYBE just maybe I would agree to saying, 'OK, we'll clear the slate and let you start over with no debt. Here's your job back, go find a place to live, buy groceries, walk to work or take public transit and start over.'


I think that is a bit harsh since the government has literally deployed armed officers to keep people from going to many jobs.

I think that the government should do the minimum possible to PAUSE, during this crisis.
Also any pause shouldn't disproportionately benefit one group. I'm for widespread measures, because the WHOLE country is going to have to pay for this disaster.


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## Rusty O'Toole (Feb 1, 2012)

Before I opened this thread, just going by the title, I had the feeling sags would be in favor of welshing on all debts except debts owed to sags.


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## off.by.10 (Mar 16, 2014)

MrMatt said:


> I think that the government should do the minimum possible to PAUSE, during this crisis.
> Also any pause shouldn't disproportionately benefit one group. I'm for widespread measures, because the WHOLE country is going to have to pay for this disaster.


Yes, that is a problem. Teachers (and probably other government employees) get full pay to stay at home. Many private sector employees will get nice pay to stay at home thanks to the payroll subvention (why is this so much more money than the CERB?). Some get the CERB. All the above get paid to basically watch netflix all day long.

Then there are people who have to work from home and juggle work and the kids 24/7. Others are still working in essential services for little more than the CERB, some in horrible conditions right now. And we have the doctors in Quebec who just made a deal to go help in nursing homes... for over 200$ an hour. No, this is NOT a typo. There's a whole lot of unfair going around before we even start paying for all this.

I'll believe debt forgiveness when sags hands over his bank account.


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## sags (May 15, 2010)

Lots of complaining but no solutions ?


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## andrewf (Mar 1, 2010)

Rusty O'Toole said:


> Before I opened this thread, just going by the title, I had the feeling sags would be in favor of welshing on all debts except debts owed to sags.


He also wants his CPP benefits increased, too! Nevermind that CPPIB would be hit hard by such debt defaults.


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## sags (May 15, 2010)

Whining and complaining isn't going to provide a solution.

Perhaps some don't know that default and bankruptcy IS a form of debt forgiveness. It just happens to be a really messy approach to the problem.


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## MrMatt (Dec 21, 2011)

sags said:


> Lots of complaining but no solutions ?


I've posted a few times.
1. Develop a plan to reduce the lockdown and economic impact ASAP.
- Relaxing measures without a plan is bad, waiting years for a vaccine that might not come is also bad.
2. Discourage lenders from formal default procedures. Encourage deferral options under similar terms to the original loan agreement.
3. Increase EI & keep the 75% staff retention program.
4. Be fair in any handouts given. If you're going to give $2k a month out to 6 million+ Canadians, give it to everyone.
5. Review programs to ensure they're not poverty traps.
6. Review EI & CERB to ensure that the labour shortage isn't exacerbated by overly generous compensation programs.

What is your program? Other than spend a trillion dollars and give lots to sags?


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## MrMatt (Dec 21, 2011)

sags said:


> Whining and complaining isn't going to provide a solution.
> 
> Perhaps some don't know that default and bankruptcy IS a form of debt forgiveness. It just happens to be a really messy approach to the problem.


Your'e the one saying that they're different.
"The main difference between default/bankruptcy and debt forgiveness is the ability of the government to manage them. "
That's doublespeak for political interference.


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## sags (May 15, 2010)

I said they are the same. How they are handled is different. 

As we learned from the US experience in 2007, letting defaults turn into mortgage foreclosure was a spectacularly bad idea.


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## Prairie Guy (Oct 30, 2018)

China owns a lot of US debt...since they are responsible for the virus, maybe they can forgive some of that debt. Does anyone know how much money Canada owes China? Maybe some of that can be forgiven to help pay for the mess they created.


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## MrMatt (Dec 21, 2011)

sags said:


> I said they are the same. How they are handled is different.
> 
> As we learned from the US experience in 2007, letting defaults turn into mortgage foreclosure was a spectacularly bad idea.


What is your plan?


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## sags (May 15, 2010)

I can see eliminating the principal residence exemption for capital gains coming to a neighborhood near you.

Probably a hike in the HST and maybe a minimum tax for corporations. If the virus rages on for 2 more years....a plan won't matter.

As for debt defaults, I would make it free to declare bankruptcy. The lenders can have their stuff back. They are big boys and knew the risk.

I would allow the lenders to extend amortization periods on mortgages to 50 years to lower payments to save some foreclosures.

I would lower the maximum interest lending rate to 10% above the BOC rate for all other lending.

I would assign all new revenues to paying down the national debt.


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## Money172375 (Jun 29, 2018)

sags said:


> I can see eliminating the principal residence exemption for capital gains coming to a neighborhood near you.
> 
> Probably a hike in the HST and maybe a minimum tax for corporations. If the virus rages on for 2 more years....a plan won't matter.
> 
> ...


or the return of 75% capital gains inclusion.....something already whispered about before Covid


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## cainvest (May 1, 2013)

Tax gas prices to what they were before the oil price war started, add say $0.40/L, until the 2m "social distancing" is lifted. Credit back those driving for essential services only.


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## MrMatt (Dec 21, 2011)

sags said:


> I can see eliminating the principal residence exemption for capital gains coming to a neighborhood near you.
> 
> Probably a hike in the HST and maybe a minimum tax for corporations. If the virus rages on for 2 more years....a plan won't matter.
> 
> ...


What do you mean "minimum tax" for corporations. There is no "basic corporate exemption" for corporate taxes.
Yes, hike the GST, the most regressive of all taxes.

Free to declare bankruptcy? I'm not sure what you mean by "free".
Who will pay the bankruptcy trustees?

Mortgage amortization of 50 years isn't much cheaper than 25 years.
Also unless they allow rate lock in of longer times, people will be in for a shock if rates go up at renewal. This will hurt the poor.

If maximum interest rate are capped that low, people with poor credit will get cut off from the legal lending market, which of course hurts those with lesser means.

Paying down the debt? Do you realize that the government was operating at a massive deficit BEFORE Covid 19?
With the damage to the economy, tax revenues will be even lower. We're going to have to hike taxes by a good 10+% just to catch up to what they were planning on spending before this.



I think it is quite telling that 3 of your policies appear targetted at making things worse for the most vulnerable.
One I don't really understand.
And of course the last ignores the reality of the current federal budget.

I don't think your proposal is a good idea, well except for maybe those who want to keep the poor poor. 
I think any plan that causes disproportionate harm to the most vulnerable is a non-starter.

Grow some compassion and try again.


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## :) lonewolf (Feb 9, 2020)

Never let a crisis go to waist. The central bankers have issued debt to nationalize corporations. Japan tried to flatten the curve of their down turn after the peak in 1989 they are still in a downward spiral. Covid 19 has not caused the depression it is the authoritarian government that looks to communist China as the template to follow 

The corporations buying back their shares during the bubble that are getting the big cash while the peasants get peanuts with the middle class getting destroyed.

The longer it takes to get the economy going the harder & longer it will be to get going which will result in more death & hardship.


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## :) lonewolf (Feb 9, 2020)

The power tripping government is going to use the crises to strength the argument to get rid of cash. They never look to themselves as the problem instead they look @ those that avoid paying taxes as the problem. The government looks to Europe & thinks negative interest rates never worked because people just used cash. Eliminate cash bring in a single currency is thier goal.
It will never work long term as history has shown the world is to big for an authoritarian government to control.


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## MrMatt (Dec 21, 2011)

:) lonewolf said:


> The longer it takes to get the economy going the harder & longer it will be to get going which will result in more death & hardship.


The problem is lefties don't seem to understand that without a strong economy, people will die.
The government shutdown of the economy IS KILLING PEOPLE.

They simply ignore or don't understand that, which means these COVID measures are just fine by them.

And they LOVE the power, they're trying to stop Porch Portraits. Really, a photographer on the sidewalk with a telephoto lens. Who does everything electronically. If 20' isn't far enough to be no risk, we're screwed.
They have a good reason to shut down a lot of the economy, but then they're trying to shut down things, just because.

Now my question is, are they pushing this stuff because they're power tripping, malicious, or incompetent?


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## Prairie Guy (Oct 30, 2018)

MrMatt said:


> Now my question is, are they pushing this stuff because they're power tripping, malicious, or incompetent?


D) All of the above


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## sags (May 15, 2010)

Nobody is going nowhere for a long time. You just have to learn to accept it.


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## off.by.10 (Mar 16, 2014)

Most of us are going somewhere before too long. The rest of you will just have to learn to deal with your fear.


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## Retired Peasant (Apr 22, 2013)

Longtimeago said:


> I look at those who will be paid CERB and ask 'where are your savings for rainy days?' I am willing to bet that many of those defaulting on their rent will be using their CERB handout to pay for their smartphone, tv, internet, etc. Their priorities are all wrong.


Evidently people are gambling - revenues are up.. Stars Group surges as it reports record revenue in first quarter - BNN Bloomberg


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## nortel'd (Mar 20, 2012)

MrMatt said:


> Your'e the one saying that they're different.
> "The main difference between default/bankruptcy and debt forgiveness is the ability of the government to manage them. "
> That's doublespeak for political interference.


Consider the following debt stimulus except substitute the Canadian Government for the tourist!
Quote by Bernard A. Lietaer, Rethinking Money: How New Currencies Turn Scarcity into Prosperity

_



It is a slow day in the small Saskatchewan town of Pumphandle, and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.
A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.
As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.
The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
The hooker rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything. No one earned anything. However, the whole town is now out of debt and now looks to the future with a lot more optimism. And that, ladies and gentlemen, is how a Stimulus package works.

Click to expand...

_


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## :) lonewolf (Feb 9, 2020)

sags said:


> Nobody is going nowhere for a long time. You just have to learn to accept it.


 Not going to happen when the masses lose everything they lose it. They can increase the handouts 100 fold & it will do nothing for the economy when the government stops people from being productive.


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## MrMatt (Dec 21, 2011)

:) lonewolf said:


> Not going to happen when the masses lose everything they lose it. They can increase the handouts 100 fold & it will do nothing for the economy when the government stops people from being productive.


That's the thing, this is a health concern, and a government induced economic crisis.


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## ian (Jun 18, 2016)

More bad news from NFLD...a province on the verge of insolvency.

Bank of Canada had to buy their bonds.....because no others in the market would buy them.



https://www.cbc.ca/news/canada/newfoundland-labrador/covid-economy-nl-crises-1.5535567


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## :) lonewolf (Feb 9, 2020)

ian said:


> More bad news from NFLD...a province on the verge of insolvency.
> 
> Bank of Canada had to buy their bonds.....because no others in the market would buy them.
> 
> ...


The closing of schools in the US has caused a disruption to the supply chain which supplies the schools with fruits & vegetables resulting in farmers plowing the crops under since they can not get the food to market.


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## MrMatt (Dec 21, 2011)

:) lonewolf said:


> The closing of schools in the US has caused a disruption to the supply chain which supplies the schools with fruits & vegetables resulting in farmers plowing the crops under since they can not get the food to market.


That's part of the supply chain issue, they're trying to get the restaurant supply chain supplying retail, but it is much harder than people think.


I don't think people realize that US restaurants were using somewhere around a billion pounds a day of food. Data extrapolated roughly from below.
Food Waste Is a Massive Problem—Here's Why | FoodPrint

When you're talking quantities that vast, it's almost incomprehensible. It's easy to think of a solution for a few trucks worth. But when you start talking about 20 fully loaded cargo ships per day... I can't even understand that much food on a daily basis.


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## :) lonewolf (Feb 9, 2020)

International shipment of food is being shut down also resulting in farmers just plowing the crops under.


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## Money172375 (Jun 29, 2018)

Our township voted to waive property tax interest and penalties for the remainder of 2020 for those who fall behind.

historically 91% of property owners pay their taxes in our town....this fell to 90% in Q2.


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## ian (Jun 18, 2016)

sags...the concept is silly. Have you ever looked at the consumer debt stats?

What would happen if this debt was forgiven. Those same people would be out incurring debt and in a short time their debt would be up to previous levels. New cars, vacations, bigger TV's...the lot.
It would be like Christmas for them all over. 

So no, I do not believe in debt forgiveness. It is like teaching people that they do not have to be responsible for their actions.


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## Longtimeago (Aug 8, 2018)

In the past, they had 'debtors prisons', including in Canada . If you did not pay your debts, you went to prison and stayed there until you paid your debts or someone paid them for you. Of course, if you had no one to pay them for you, then you could end up staying in debtor's prison for the rest of your life. 

In Canada there were not 'debtors prisons' specifically as there were in countries like the UK but debtors were held in a 'normal' prison solely on the basis of not paying their debts. The prison term was for an 'indefinite' time period.








Imprisonment for debt (Upper Canada) - Wikipedia







en.wikipedia.org





Maybe we should bring that concept back. No more, 'oh well, I'll just declare bankruptcy and start over.'


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## ian (Jun 18, 2016)

I have a $130 cell phone that I bought in Verizon packaging. Had it for three years, works like a charm. My spouse has a $250 Samsung. Bought on line from Koodo. Two years old, works like a charm. We can well afford to buy any phone on the market. We are happy with the ones we own and see no reason to change.

My SIL and BILretired) have top of the line Apple phones. They got them on the three year phone plans. They will no doubt get new ones at the end of three years and sign up to the program again. They are mired in debt. They pay a comparatively incredible amount of money each month to their cell phone carrier for these. Is it any wonder why they slot so neatly into the consumer debt stats? It is all about choices.

Debt that is 'forgiven' does not disappear. No different than inventory shrinkage, aka shoplifting and employee theft losses. It gets redistributed to those who pay their bills and to those who do not in the form of higher taxes or higher interest rates and higher prices. There is no magic to this...it is not an Alice in Wonderland environment despite what sags believes.


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## sags (May 15, 2010)

Longtimeago said:


> In the past, they had 'debtors prisons', including in Canada . If you did not pay your debts, you went to prison and stayed there until you paid your debts or someone paid them for you. Of course, if you had no one to pay them for you, then you could end up staying in debtor's prison for the rest of your life.
> 
> In Canada there were not 'debtors prisons' specifically as there were in countries like the UK but debtors were held in a 'normal' prison solely on the basis of not paying their debts. The prison term was for an 'indefinite' time period.
> 
> ...


But then taxpayers would have to pay the costs of the imprisonment, which in Canada are $115,000 a year.

That would be punishing the studious debt paying taxpayer as well.


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## ian (Jun 18, 2016)

sags...the basic truth is that debt that gets forgiven does not disappear. It gets re-distributed. Would you like to pay more for goods, services, or credit in order to pay off your neighbours consumer debt. He had a luxury vacation that he could not afford. You may have had stay vacation because you were debt adverse.


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## sags (May 15, 2010)

When was the last time a bank or credit card company lowered their fees or interest rates because they have lower loan losses than expected ?


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## ian (Jun 18, 2016)

Sags...if you had a business where demand always equaled, or exceeded supply, would you lower your prices? I think not.

Instead , they lowered their qualification numbers or increased their credit limits.

Do you have a problem with business making money and investors taking profits in return for risking capital?


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## sags (May 15, 2010)

How much longer do you think debt can propel the economy forward ? I think we are near the end of that strategy.


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## ian (Jun 18, 2016)

Is that a reason to forgive debt. Heck, people will load up with new debt the day or day after their old debt is forgiven. 

Forgiving debt does not help people learn to manage their money. If anything, It rewards them for being so poor at it. Is this what you want to encourage??..


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## Longtimeago (Aug 8, 2018)

sags said:


> But then taxpayers would have to pay the costs of the imprisonment, which in Canada are $115,000 a year.
> 
> That would be punishing the studious debt paying taxpayer as well.


Umm, do some research sags. Debtors in prison were required to work to pay for their keep, it costs the taxpayers nothing. If they didn't work or have family to bring them food, they literally starved, simple as that.

"_A *debtors' prison* is a prison for people who are unable to pay debt. Through the mid-19th century, debtors' prisons (usually similar in form to locked workhouses) were a common way to deal with unpaid debt in Western Europe.[1] Destitute persons who were unable to pay a court-ordered judgment would be incarcerated in these prisons until they had worked off their debt via labour or secured outside funds to pay the balance. The product of their labour went towards both the costs of their incarceration and their accrued debt." _Wikipedia quote.

That kind of system would certainly provide motivation to A, not go into debt or B, work to get out of it


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## sags (May 15, 2010)

Yea, and Jesus threw the money changers out of the synagogue, and the French perp walked the rich up to the guillotine.....chop, chop.

New motto for protestors.........Defund the Rich. Candlelight protest......bring your own torches and pitchforks.


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## ian (Jun 18, 2016)

Let them eat cake.

But they still have to repay their debt. Every last cent.


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## Prairie Guy (Oct 30, 2018)

sags said:


> New motto for protestors.........Defund the Rich. Candlelight protest......bring your own torches and pitchforks.


That's been their motto for centuries...do you think the lazy left actually want to work? Nope, they've been raised thinking that someone should pay them to sit on their ***. You know because it's "fair".


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## sags (May 15, 2010)

Nobody is lazier or more self entitled than the rich. They "do" the yacht club circuit while the "ants" do all their work for them.


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## ian (Jun 18, 2016)

Right. Sometimes after risking every dime that they have on a venture or working twelve hour days, six or seven days a week, until they have built up a business or an investment has paid off. Now is exactly the time when some of those investments have become extremely risky. Especially for those in retail, food and lodging.


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## Prairie Guy (Oct 30, 2018)

sags said:


> Nobody is lazier or more self entitled than the rich. They "do" the yacht club circuit while the "ants" do all their work for them.


Why can't you do the same? Are you incompetent? Or do you just find it easier to cherry pick the very few who are successful and then complain?

One of my friends spent 15 years working 80 and often more hours a week trying to build a successful business. His wife's pay cheques were used in lean times to provide food and to cover his payroll so that his employees cheques didn't bounce. They even had to borrow money from their parents once or twice....they lost sleep over that.

Now he's successful and only has to work 30 hours a week. His net worth is 10 times mine and instead of being jealous I admire what he's done. You saw nothing of what he did or what other people like him did during all their lean years but as soon as their successful you suddenly think you're entitled to take your "fair share" based on your warped belief that he has too much. We've been friends for decades all I want from him is his continued friendship and the "good customer" discount.


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## ian (Jun 18, 2016)

We know several people in this position. They were not always though. We are not resentful nor are we envious of them. We are happy for their well earned success. We know that they gave up a lot to get where they are. Long hours, in some instances long hours of post graduate work, few if any family vacations, going without in order to make a payroll. Often paying their employees more than they were able to take out of the business for themselves. Then success after years of working toward a dream. 

They were never eligible for EI, for layoff separation bonuses, for employer pensions plans. They did not have 30 and out programs. They never had a union employer where 37.5 hours was the norm along with supplementary health, dental, and life insurance programs. No such thing as time and a half or double time for those additional 20-30 hours a week that they put into the business. Thank goodness for them. They worked hard be successful, they created jobs, and most contributed to their communities.


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## ian (Jun 18, 2016)

duplicate


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## sags (May 15, 2010)

Many posters on CMF don't appear jealous of wealthy people at all.

They actually appear jealous and resentful of those people who piss all their money away on electronics, cars, homes, vacations, and good times.


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## Prairie Guy (Oct 30, 2018)

sags said:


> Many posters on CMF don't appear jealous of wealthy people at all.
> 
> They actually appear jealous and resentful of those people who piss all their money away on electronics, cars, homes, vacations, and good times.


No one is jealous of people who piss their money away but I can see being resentful for having to bail irresponsible people out.


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## ian (Jun 18, 2016)

Why on earth would we be jealous of those who piss all their money away and then are left with a retirement that they did not envisage? Not resentful at all since it has zero impact on us. We certainly would not have any sympathy for them but I have no doubt that they would not be looking for sympathy in any event.

We would only bail out once and only bail out someone who has respect for money. Not someone who would start to fritter it away once they got bailed out. There would be no point to that.

Speak to a banker about Helocs. Not uncommon for people to go the heloc route in order to covert lots of high interest consumer credit card debt to low interest heloc. Makes sense....only many of them do not learn a lessen. They go right out and max the cards out again. Then back to the heloc. Eventually even their home equity has been eaten away by needless consumer debt. I doubt whether forgiving their debt would change their spending habits so why on earth even bother to think about it.

The banks love this. And it is great for the stock.


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## Longtimeago (Aug 8, 2018)

ian said:


> Why on earth would we be jealous of those who piss all their money away and then are left with a retirement that they did not envisage? Not resentful at all since it has zero impact on us. We certainly would not have any sympathy for them but I have no doubt that they would not be looking for sympathy in any event.
> 
> We would only bail out once and only bail out someone who has respect for money. Not someone who would start to fritter it away once they got bailed out. There would be no point to that.
> 
> ...


I agree with all of that. My experience is that people who can't manage money, can't manage money. End of story. As you say, they consolidate debt and then just run up more debt again. A never ending cycle.

It does however tend to catch up with them and end when they get older. When they can no longer work and have to live on nothing but government pensions, the cycle ends.


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## sags (May 15, 2010)

Don't assume that "spenders" always end up broke. Maybe they have more money to spend than you do.


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## Longtimeago (Aug 8, 2018)

sags said:


> Don't assume that "spenders" always end up broke. Maybe they have more money to spend than you do.


I have no idea what you are trying to suggest sags. Anyone who spends more than they earn will end up broke when they can no longer generate an income.


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## ian (Jun 18, 2016)

Take a look at demographics of the consumer debt statistics in Canada. They tell a story. Especially about where some people will be in retirement based on their consumer credit stats in the mid to late fifties. Scary. We know a few people like this who are now into their retirement years. They have discovered, much to their chagrin, that it is too late to turn that ship around to another course.


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## Plugging Along (Jan 3, 2011)

ian said:


> Take a look at demographics of the consumer debt statistics in Canada. They tell a story. Especially about where some people will be in retirement based on their consumer credit stats in the mid to late fifties. Scary. We know a few people like this who are now into their retirement years. They have discovered, much to their chagrin, that it is too late to turn that ship around to another course.


Just curious on what is happening to these people on retirement? Are they facing any of the consequences of their lack of savings in their younger years. 

We have always been savers for our retirement and despite a good income, feel we spend a lot less than many who make a fraction of what we do. With all the handouts and debt forgiveness, I sometimes question why we do the responsible thing if everyone ends up at the a similar place.


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## Mukhang pera (Feb 26, 2016)

Plugging Along said:


> Just curious on what is happening to these people on retirement? Are they facing any of the consequences of their lack of savings in their younger years.
> 
> We have always been savers for our retirement and despite a good income, feel we spend a lot less than many who make a fraction of what we do. With all the handouts and debt forgiveness, I sometimes question why we do the responsible thing if everyone ends up at the a similar place.


Nope, no consequences to face PA.

As you point out, the indolent get rewarded. What? You saved little for retirement? Okay, we'll give you OAS, funded by those who were diligent. What, you did an even crappier job at saving? No problem! We'll give you GIS to boot. The savers don't mind funding that one either.


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## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> Nope, no consequences to face PA.
> 
> As you point out, the indolent get rewarded. What? You saved little for retirement? Okay, we'll give you OAS, funded by those who were diligent. What, you did an even crappier job at saving? No problem! We'll give you GIS to boot. The savers don't mind funding that one either.


I think that is a bit simplistic and unrealistic Mukhang pera. Would you really want to live on just OAS and GIS? Would you feel it afforded you a reasonable quality of life?

Being poor sucks and being poor when you are elderly sucks even more. Those who failed to plan for their retirement and end up with a very basic income in their old age suffer for it without a doubt.


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## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> I think that is a bit simplistic and unrealistic Mukhang pera. Would you really want to live on just OAS and GIS? Would you feel it afforded you a reasonable quality of life?
> 
> Being poor sucks and being poor when you are elderly sucks even more. Those who failed to plan for their retirement and end up with a very basic income in their old age suffer for it without a doubt.


No, of course it would not afford me what I would find an acceptable quality of life. But for many, it's just fine.

Here's an example. I know a man who is now closing in on age 60. When he was in his 30s. he worked at a union job, quite well paid, in an aspect of construction. Worked on a lot of large projects. Fairly well paid. 

When he wanted to go further, he was told he would have to take some courses. So he signed up. He soon found that he struggled with course work, with reading and reading comprehension. His instructors noticed right away and arranged for him to be tested. The result of the testing was that he was told that he should forget about book learning. It would always be beyond him. He was told that he was "disabled" and that he could get government money. They told him "You deserve it", so he took it. He's on a BC program called "Persons With Multiple Barriers to Employment" or something like that. So, more than 20 years ago he downed tools and went on the public tit. He gets, today, about $1,100 a month, plus some benefits. 

He showed me some of his tests and results of same from when he was labelled as "disabled". I was a bit surprised. For quite a few of the tests the grading system was something of a comparison to others. The rating was along the lines of "average, below average, well below average, somewhat above average and superior" Those are not all the correct terms, and not a full list, but you get the idea. I was surprised at the number of items in which he was rated above average or superior. Those were in areas of manual dexterity, etc. But still, he got the government allowance. He accepted with alacrity and never worked again. He scoffs at those of us who trade our time for money. I mean it. He thinks he has the world by the tail. He is more than content with his lot. He stretches his allowance with work under the table (I think he can earn up to $500 a month with no deduction...he often earns more). He can do a lot of things. He can paint houses, don diving gear and clean boat hulls, work at seafood processing; he can drive any machine. But he's disabled.

He is also astute about finding women to live with who supply room and board. Then they'll take off to places like Vietnam for 4 -6 months most winters. His allowance is supposed to stop if he's out of province for more than 30 days, but no one checks or cares. He has his bases covered. He has someone check his mail, the same person who is willing to say he receives $450 in rent every month from our poor disabled guy (who, in fact, seldom pays rent).

This man is "disabled" the way about 70% of the population is "disabled". He lacks the ability to become a doctor, lawyer, engineer, leader of business, etc. He is more than content to accept the disabled label. It is bestowed by university-trained social workers and those working with them, who think that anyone who cannot do as they have done must be labouring under some sort of disability. 

So I would say it is you, LTA, who is being unrealistic and simplistic here. To be denied the ability to hike in the Swiss Alps, to own a bar in Greece, to be spared the ignominy of having to fly cattle class, would all be anathema to you. You cannot imagine a life without a fair amount of creature comfort and indulgences. You apparently find it inconceivable that some are content to get by on a pittance. You must see them as wallowing in a world of envy and self-pity and regretting their misspent youth. Well, that is just not so. 

I doubt very much the fellow of whom I speak is some kind of one-off curiosity. I think there are many, many like him. I know that beyond peradventure. If they can be supported from the public purse and have unlimited free time from an early age, they are content. When this guy gets to age 65, I expect his present allowance will terminate, or be reduced, and OAP and GIS will take over and his lifestyle will change not a whit. You may see him as "suffering". He sees all the worker bees as those who suffer.


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## sags (May 15, 2010)

You are seriously hurt at work and you collect WSIB. Your right to sue the employer was eliminated in exchange.

Here is what happens to you..........deeming. These people end up on CPP Disability ($1000 a month) or Ontario Works (welfare ....$700 a month)

I doubt many people are enjoying the lifestyle. Average rent for a one bedroom apartment in our city is more than that.









Injured Workers Seek UN Recommendations on Deeming


Imagine you are seriously hurt on the job, that you can’t return to your previous work because you now have a permanent disability. Worker’s compensation is supposed to be there to give…




www.vandykelaw.ca


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## sags (May 15, 2010)

One of the reasons Canada is such a great country is our social programs.

In every poll ever taken, Canadians have clearly said they would rather pay more taxes than cut social programs. 

Politicians who didn't get the message got the heave ho.


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## like_to_retire (Oct 9, 2016)

sags said:


> Canadians have clearly said they would rather pay more taxes than cut social programs.


Socialist drivel. 

Sensible working people do not think that. We pay enough in taxes.

Taking money from those that earn it and giving it to those that don't is the socialist mantra.

Stop trying to get everything for free.

ltr


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## Mukhang pera (Feb 26, 2016)

sags said:


> You are seriously hurt at work and you collect WSIB. Your right to sue the employer was eliminated in exchange.


I would say a better course would be to rescind the 'historic tradeoff' now so widely lamented by worker groups. Get government out of it altogether and restore the right to sue. More work for lawyers and no cost to society. Now, the cost of WCB programs is borne, initially, by employers, who pay a percentage of payroll to in WCB assessments. In turn, it gets passed on to the rest of us. In BC, the cost to employers is according to rate class and individual employer "experience rating" within that class. For example, logging has a higher rate of expensive claims the business of running a daycare. The logging corporation pays a higher percentage of payroll. I say let them pay nothing, and see if they get sued.

In BC, the WCB came in in 1917, a little bit before I became a lawyer, so I am not familiar with the jurisprudence of the day. But I wonder how easy it was to sue. For many actions to prevail, it must have been seen by the courts as some kind of a _sui generis _endeavour, with principles of near absolute liability applied. I would doubt that, but I don't know. As my granny would have said: "Was ya' there Charlie?". 

Ordinarily, to sue anyone for personal injury, we are looking at the application of ordinary principles of negligence law. Concepts of foreseeability, of duty and standard or care, breach of duty, causation, contributory negligence, remoteness of damage, all come into play. So take our gyppo logger for example. He has a few guys out there in the woods falling. So, one of them is felling a nice old growth Douglas fir. As he is near completion of his felling cut, the thing barber chairs on him and he has not yet followed his escape route to a place of safety. He is grievously injured as the log rolls off the stump. Or the cut is otherwise unremarkable, but he gets clobbered by a widow maker. I have a difficult time in either scenario laying blame at the feet of the employer. How was the employer negligent? In what duty did he fail, that produced the injury? 

Another scenario. In BC, for some years, so-called RSIs (repetitive strain injuries) have been in vogue. Not much heard of in 1917 I would guess. They take a variety of forms - tendonitis, tenosynovitis, epicondylitis, bursitis, etc. A popular one is the dreaded CTS (carpal tunnel syndrome) seen in those who spend a lot of time at keyboards. 

I have spent a fair amount of time in offices, working with people who do a lot of keyboarding. A few get CTS. The incidence, in my experience, is fairly low. The fact is, some workers are prone to CTS and some not. You can have two typists, sitting side by side, each using identical equipment, each making the same number of keystrokes per hour and one might be afflicted and the other not al all. In days of old, the prone would have accepted that they were simply not physically compatible with the job and they would have moved on. In sags' world, there is no moving on. Those people should be allowed to say "I hurt and I have to be allowed to retire on an allowance equivalent to what I was earning." 

Again, I say let 'em sue, which is what they are whining about being injuncted from doing. Where lies the employer fault? Is the employer to be held liable because the bulk of the employer's workforce has no problem with keyboarding, while the employee with a weak constitution (at least in RSI terms) cannot manage the job? Does that employee get to say: "I cannot or will not change jobs and the world owes me a living?"

I'll vote for the immediate winding up of all WCB programs in Canada. Put an end to the moaning about mean old government. Get government the heck out of it.


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## ian (Jun 18, 2016)

Here is the thing. Canadians are willing to pay more taxes.....as long as it is someone else's taxes and not theirs. And they always assume that is the case when asked if raising taxes is good.


Sags...would you be willing to pay another pay another 5-10 percent of your net income to the CRA? I suspect not, but you would have no problem if I had to pay another ten percent would you?

It reminds me of the unions asking their members to boycott Walmart. As if that would happen.


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## sags (May 15, 2010)

like_to_retire said:


> Socialist drivel.
> 
> Sensible working people do not think that. We pay enough in taxes.
> 
> ...


Don't worry. Our income in retirement isn't what it used to be, but it is still 6 figures a year. We won't be needing any of your money..........LOL.


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## calm (May 26, 2020)

.
In 1970 I was living in Yellowknife and was bidding on contracts in Frobisher Bay.








Frobisher Bay - Wikipedia







en.wikipedia.org





They always made sure that you needed to work a minimum of 40 hours per week.
Why would anybody work more than 40 hours per week if you could live on 30 hours?
I was renting my 2 bedroom house for 650 bucks per month. (1971)


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## sags (May 15, 2010)

ian said:


> Here is the thing. Canadians are willing to pay more taxes.....as long as it is someone else's taxes and not theirs. And they always assume that is the case when asked if raising taxes is good.
> 
> 
> Sags...would you be willing to pay another pay another 5-10 percent of your net income to the CRA? I suspect not, but you would have no problem if I had to pay another ten percent would you?
> ...


Since many are concerned about the "spenders", I would be okay with raising the HST to pay the bills

At it's current rate, the HST revenue is about the same as the cost of the OAS/GIS benefits. An increase should be directed to paying down the national debt.

I am a "spender" so I would be paying more, but that is my choice.


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## ian (Jun 18, 2016)

Either way sags....forgiving debt is a dead end solution that simply spreads that debt, in a similar way to a sales tax, among others who do repay their debts. Moreover, it only serves to encourage those who have had their debt forgiven to run out and buy more products and services that they cannot afford.

A new car salesman once told me that he loved selling new cars to people who could obviously not afford them. Why? In his experience those where the people who purchased all the high margin, high commission options on their vehicles. Easy sales to make. Price never seemed to be an inhibitor to them. I have seen this a number of times in my own extended family.


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## Plugging Along (Jan 3, 2011)

sags said:


> Don't worry. Our income in retirement isn't what it used to be, but it is still 6 figures a year. We won't be needing any of your money..........LOL.


I have a serious question. If the government changed policy and your retirement income was taxed so you have to pay 15% more tax. Are you okay with that? 



sags said:


> Since many are concerned about the "spenders", I would be okay with raising the HST to pay the bills
> 
> At it's current rate, the HST revenue is about the same as the cost of the OAS/GIS benefits. An increase should be directed to paying down the national debt.
> 
> I am a "spender" so I would be paying more, but that is my choice.


It's not the spenders that people have problems with. You have the money, you want to buy stuff, and can sock some money away for your retirement - great. Just don't come asking for debt forgiveness, or any government hand outs if spent all your money when you are younger (even if you weren't in debt) and expect others to pay for your retirement. 

People generally have problems parasites. One who can fully support their lifestyle from cradle to grave is not a parasite.


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## sags (May 15, 2010)

Everyone makes choices.

We buy new vehicles but we don't take vacations. Some people take vacations instead of spending on a new car.

The consumer debt problem could be solved if lenders just said no.

Only problem is a big one. What would the economy look like if people suddenly stopped spending ?

Businesses would close. Unemployment would rise. Home prices would fall. Stock values would fall.

Better for the government to give people cash and allow them to legally default. It keeps the wheels on the economy rolling.

That's why the government is handing out hundreds of billions in COVID support.


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## sags (May 15, 2010)

If people feel badly about government handouts, they have the option of sending back the child benefits, OAS or anything else they collect.

Their choice, but I have no plans on being a martyr for the cause.


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## ian (Jun 18, 2016)

So the consumer debt problem is the lender's fault?? Really??? It is a catalyst no doubt but the root cause is in the debtor's mirror if he or she looks hard enough and is honest enough with him or herself. Total cop out.

That is simply and excuse for people who shift blame for their own actions and choices on to others.


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## sags (May 15, 2010)

Buy something every day. Your local merchants are depending on you.


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## ian (Jun 18, 2016)

Don't pay a dime until 2029. Let's push out the boat and go first class all the way. Worry about it in 2029.


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## Prairie Guy (Oct 30, 2018)

sags said:


> The consumer debt problem could be solved if lenders just said no.


The consumer debt problem could be solved if borrowers just said no.


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