High Debt, High Optimism

There seems to be something going on in society and with consumers that may lead to future problems. Debt. Most of us have it, and most of us rely on it to get us through. In a society where consumerism runs rampant, it has become second nature for us to "have it all." Why? Because it's possible to have it all.

There is a credit card for everything. There was a time when MasterCard and Visa were the main forms of credit. I remember as a kid seeing my parents use only those two cards. A sticker on the cash register would usually tell you what card you could use. Today, there are Canadian Tire cards, Sears, Pier 1, Rona, the Bay, and the list goes on. Private citizens take on debt.

The situation is much the same in the United States, consumers carry way too much debt. The US government is also carrying record debt. But the same is not true for Canadian governments. The Saskatchewan government has been paying down debt for years, Alberta is debt free and Canada continues to be one of the only G8 countries with budget surpluses.

So why do we as consumers take on debt and why do lenders provide us with credit? Simple. We are optimistic that we will be able to continue to make payments and creditors are optimistic they will be paid back.

How long can this continue? Or will people suddenly say one day, that's enough consuming for now, it's time to save. I guess you need high interest rates to be encouraged to save. I see a problem of the future, years away, when the prisoners of debt tell their governments to bail them out. Back to Bestbuy.com to find me a big screen.