I recently got an understanding of why our government, and the Bank of Canada, continue to issue warnings about personal debt levels. I got this from watching a CBS 60 Minutes segment.
The CBS piece was about family homelessness; interviews with decent, average families who lost their homes and found themselves living in their vehicles, parks or cheap motels. CBS reported that 14 million American children were in poverty before the recent great recession. That’s now 16 million, up two million in two years.
In Florida’s Seminole County schools, 1,000 students have lost their homes. One educator running programs for homeless kids in Seminole County said between five and 15 new homeless kids join her programs every day.
On Highway 192, the road to Disney World near Orlando, 67 motels house 500 homeless kids and their families. Special school bus runs have been organized to pick up these kids and take them to and from school.
The children interviewed on camera are nice, well-spoken kids being raised by decent parents who have lost their jobs, and their mortgaged homes.
Some of the interviews are heartbreaking. Said one student: "I kind of feel like it's my fault that we don't have enough money. I feel like it's my fault that they (my parents) have to pay for me. And the clothes that they buy for me."
The Certified General Accountants Association of Canada said recently that
the pace of debt accumulation in Canada is declining but household debt levels still soared to a new record of $1.5-trillion in the first quarter of 2011, leaving many Canadians with lower or stagnant incomes in a “dire” situation. The association reported that more than half of indebted Canadians are borrowing money just to meet their day-to-day living expenses.
the pace of debt accumulation in Canada is declining but household debt levels still soared to a new record of $1.5-trillion in the first quarter of 2011, leaving many Canadians with lower or stagnant incomes in a “dire” situation. The association reported that more than half of indebted Canadians are borrowing money just to meet their day-to-day living expenses.
Bank of Canada governor Mark Carney has warned in the past of the impact of rising Canadian debt levels, and in a separate report recently, TD Economics warned that “following five years of excessive debt accumulation, Canadian households are finally tapped out.”
The great fear is that when interest rates begin to rise, many Canadians will not be able to meet increased monthly payments.
After watching the kids on 60 Minutes, we don’t want to see that happen here.
You can view the 60 Minutes homeless segment at: http://www.cbsnews.com/video/watch/?id=7371392n
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