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Debt Crisis Inflation and Merry Christmas

Written by Margaret Johnson | Tuesday, 06 December 2011

Kelly Sinoski reported in the Vancouver Sun in November that municipal spending was up 46% over the last 10 years in British Columbia according to the Canadian Federation of Independent Business. Although no direct reference is made to debt this piece of news gives a bird’s eye view of how governments throughout the world have been struggling – and it begins with expenses, or more specifically uncontrolled expenses.

We normally think of inflation as being separate from taxation. Even inflation as reported by governments excludes certain items that have volatile price movements, most notably food and energy. These are big ticket items for consumers as are direct and indirect tax increases.

The above report noted that municipal revenues from sales of services — everything from parking fees to business licences — have more than doubled over the decade.  Interesting how municipal revenues become uncontrolled expenses for consumers.

This begs the question - what are uncontrolled expenses? Is an uncontrolled expense for a consumer a tax increase from government(s)? What are uncontrolled expenses for governments? Who’s in control here?

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What Savings

Written by Margaret Johnson | Wednesday, 23 November 2011

What Savings?

Here we go again. Another survey published in the Vancouver Sun in October 2011 informs the public that nearly six in 10 British Columbians, or to be more precise, 58 per cent, are not saving while 32 percent are using savings for daily expenses or emergencies. Most people would see this as authoritative and insightful information. Some would say, “Is that so?”

I say, “What the heck?” It doesn’t seem to matter that the term savings is never defined. Is this just money sitting in a bunch of bank accounts? Whose money is it? Are they pensioners?   

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Under the Carpet of the Wall Street Protests

Written by Margaret Johnson | Wednesday, 19 October 2011

For those of us from the 1960s, it is refreshing to see a new generation respond to the injustices of their era.

We tend to forget the pain and suffering for many of the protesters who were unlawfully locked-up, beaten or killed like Dr. Martin Luther King Jr. in their 1960s marches for social justice, equality and fairness.

Complacency and non-critical thinking are two overarching contributors to the grip that the instant gratification culture presently has over people and governments that worship, beyond anything else, wealth.

Vancouver hosted a very special Free the Children conference on October 13^th 2011 that included prominent speakers such as Mikhail Gorbachev. A number of the youth were interviewed on television during the conference, and when asked who Mikhail Gorbachev was, they didn’t know. (He was the last leader of the Soviet Union who brought the cold war to a final end.) Many others would probably not know that it was a Scottish-born Baptist minister (Tommy Douglas) who brought universal health care to Canada via Saskatchewan in 1962 – something we take for granted. Credit crunch

There is a lot missing underneath the current Wall Street Protests that highlight the reemergence of a growing list of social inequalities between the rich, the middle class and the poor. The irony is that it took impossible levels of debt to wake everyone up.

In many respects the Wall Street Protests are a reaction to the fallout of the debt crisis in the US and abroad – namely, high unemployment, record levels of consumer and corporate debt, unprecedented home foreclosures and feelings of desperation by a wide range of social groups – young and old.

The B word, that is bankruptcy, hasn’t been heard or spoken. What happens under the carpet of a bankruptcy assignment or a defaulted creditor payment really doesn’t matter to a credit society that blames debtors for everything.

The banks that triggered the credit crunch were ultimately helped out of the crisis by governments, similar to the automobile manufacturers. The fraudulent loans and egregious conduct of the major culprits have all gone essentially unprosecuted except for Bernard Madoff and a few others.

In contrast, the consumer debtor was (and continues to be) held fully accountable. They had to pay for everything that went wrong. They were the ones who lost their jobs, their credit ratings, their homes, property and subjected to a hidden society within a society.

In the ‘debt’ sector of the credit society different group of individuals and professionals can be found - debtors, creditors, bill and tax collectors, bailiffs, credit counsellors, foreclosure - matrimonial and insolvency lawyers, bankruptcy trustees, estate administrators, official receivers, provincial debt collection licensing officials, the courts - small claims- provincial and supreme courts, and the Office of the Superintendent of Bankruptcy. This is the world of bad debts, bad loans, bad decisions, bad business deals, broken dreams and broken promises. It’s a place where failure reigns supreme. It’s a place no-one wants to go to, even for a short visit.

It has been this place, the world of debt that has been festering since the 1970s. From the early appearance of credit cards, institutions like the family began to change from single wage earner families to dual income families. Financial principles like saving first before purchasing goods and services were discarded in favour of using credit cards and credit lines for basic household expenses, including food, clothing, entertainment and car insurance to big ticket items like furniture, appliances and cars.

The practice of paying credit card debt off in thirty days to avoid interest to carrying large balances that lead to endless consolidations and a never ending debt spiral became extinct.

Families since the 1980s have been struggling with new money issues and a changing culture that promoted borrowing while being silent about debt – and a new phenomenon for the middle class - being in debt for a lifetime.

The US debt crisis pointed to the slumbering giant, a national bed buffalo that had successfully avoided any serious attention for almost 40 years – because nobody wanted to know how bad the debt picture was or see the economic cycle of endless growth end or slow down or change in any way.

Proposals and Bankruptcy

Written by Margaret Johnson | Wednesday, 21 April 2010

What Does It All Mean?

Coming to terms with insolvency is emotionally draining for people and the stress can be overwhelming. Constant calls from creditors/collectors at home and even at work can cause sleepless nights. It can harm relationships and affect a person’s performance at work.

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