Sask Reduces Debt, Consumers Spend More

This week, Saskatchewan's debt will reach it's lowest level since 1991, with the accumulated debt being reduced to $6.9 billion. Minister Atkinson announced $400 million will be used towards the debt after the province experiences another quarterly surplus.

But while the Saskatchewan Government pays debt, consumers are spending more and taking on more debt. According to Stats Can consumer spending on retail sales grew by 6.4% in 2006 over 2005 figures to a whopping retail spending average of $11,974 per person in Canada. It must be said too though, that disposable income grew by 6.2% in the same period.

The scary part of all of this is that average disposable income (after tax) per person in Canada was $27,000 in 2005. So approximately 44% of our after tax income goes to retail sales...

IMHO, these levels are becoming dangerously high. The United States are experiencing a housing and consumer crisis that was derived from economic expansion and a housing boom. The difference is that their governments continue to rack up debt while ours reduce the debt. If the same issues arise in Canada (housing/spending), will we expect our government to bail us out?