In defence of debt for those living in this expensive province

Isuppose it is up to me, since no one else seems to want to, to speak up for those Canadians who find themselves in debt.

God knows there are enough of us.

But that’s our dirty little secret, isn’t it? Our shame we shrink from?

Which is odd. Despite the fact that in B. C. the average debt load above and beyond our obscenely inflated mortgages is almost $ 40,000 — which is to say, debt is the normal state of existence here — you would be hard- pressed to find anyone in the public discourse who will admit to being in debt.

Instead, we get lectures from scolds. We get testimonial streeters from those who claim they live within their means, without us knowing if they inherited money, or sold their house for a fortune or haven’t had to shoulder annoying expenses like, say, children. We get the I’m- All- Right- Jack school of financial advice, that voice from the comfortably secure, which urges us to Pay Ourselves First, Live Within Our Means, Pay Down Our Mortgages As Fast As We Can and Maximize Our RRSP Contributions — all of which is advice so obvious and so facile that you wonder if the financial experts who spout these fatuities actually get paid for doing so.

What you also get is the unspoken presumption this financial advice is based upon, which is:

Those who find themselves in debt are either ( a) stupid, ( b) spendthrifts or ( c) both.

I have no doubt that, on occasion, this happens to be the case. I hear the stories — just as I’m sure you do — of families living the high life, who have all the toys, and who finally have to file for bankruptcy because they can’t pay their credit card bills.

Oddly, I have never met anyone like that. People I know who are in debt are middle class. They take out lines of credit to send their kids to college. They borrow money to repair their roof or buy a reliable car. Their mortgage payments eat up so much of their take- home pay that sometimes they resort to using their credit cards.

Meanwhile, they have seen their hourly wages stagnate for the last 30 years — this according to a 2012 Statistics Canada report. Pity that the government and household services we pay for have not.

Then there is the all too obvious correlation between debt and the cost of living in a place like Metro Vancouver.

Why do we have the highest debt loads in Canada?

Is it because we’re less responsible than other Canadians? No, unless you happen to think we British Columbians are uniquely profligate. It’s because it’s so freaking expensive to live here. When folks are doing all they can just to pay their mortgages and rents, they haven’t reserves to pay for unforeseen expenses.

( But what did one news outlet cite in its story on personal debt? A doubling here in the sales of exotic sports cars. It is to laugh.)

Look at RRSPs, touted as the one great tax shelter for the middle class. Only 26 per cent of all eligible tax filers in Canada contributed to RRSPs in 2010 — just under six million people in total. The mean contribution nationwide was a measly $ 2,790.

Meanwhile, the total room for RRSP contributions available to eligible tax filers has grown. Fewer and fewer people are taking advantage of the

People I know who are in debt are middle class. They take out lines of credit to send their kids to college. They borrow money to repair their roof or buy a reliable car.

tax benefits available to them. Why? Because they haven’t the extra funds to do so. But those who can benefit most from RRSPs? The upper and uppermiddle classes.

In the meantime, we’ve seen a widening in incomes. In the last decade, the gap between the average income for those in the top 10 per cent has begun to grow between those in the bottom 10 per cent.

Why? A host of reasons, perhaps:

An increasingly non- unionized labour force; a rise in the numbers of self- employed people, who usually earn less than salaried workers; a tax code that does a mediocre job at income redistribution, especially for one- income families; the rise of a well- paid bureaucratic class at the expense of private sector workers. ( And a thought here: Before our governments lecture us on the evils of personal debt, could they please get themselves out of debt first?)

Maybe, just maybe, the problem of persistent personal debt isn’t one so much of consumer profligacy — unless, of course, you were one of those who put the cost of that Lamborghini on your credit card.

Maybe it’s systemic, that we are finding it harder to save our money because for more and more of us, there is less of it to be saved.