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Discussion Starter #1
I understand tomorrow night's "The Agenda" on TVO with Steve Paikin is a debate between Gail Vaz-Oxlade and Moshe Milevsky (and possibly others) on the topic, "Addicted to Debt?"

It runs at 8 p.m. and then they repeat it at 11 p.m. I think they make their shows available as podcasts/webcasts later, too.

I'll fire up the popcorn machine and report back after I watch it. Should be an exciting night for me; I'm going to see Jim Otar at the library first. An evening of personal finance in the MoneyGal world!
 

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I missed the first two times but I think it's on again today at 5AM. (March 4) Channel 144. Robber's Cable. Recorded it, I'll watch it later.
 

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Discussion Starter #5
They usually throw up clips from the show on their site a few days after the show airs.
 

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It didn't really address anything that we didn't already know. Obviously Canadians are taking on more debt than historically, but as one guest indicated truefully, each person is different. Some people can faithfully manage many times their income in debt and others will sink on $20,000 of debt.

What I think is the problem and you see it on the Debt Do You Part shows, is that money is too complicated for a lot of Canadians. My mother would have had 1 mortgage and maybe when she was 35 or 40, she got her first credit card. Today, young couples will have a mortgage or two, a secured line of credit, an unsecured line of credit, 3 primary credit cards, 4 retail cards, a car lease, a don't pay a cent TV, bills coming in monthly, bi-monthly, quarterly and annually as well as haphazard payments for car repairs, home maintenance, etc.

If one person owes a thousand dollars on a credit card and misses a payment and adds $200 to it and at the end of the month owes $1,200, they would know that they have been very bad with credit. If another that owes $1000, makes a $300 payment and then adds $500, and at the end of the month they owe $1,200, they would think they have been really good with credit. They made a 30% payment on their debt. WOW. But as we know, financially they have both have done the same thing, except the 2nd one didn't hurt their credit rating as bad. Other than that they are both headed into the same pit of dispair at the same rate.

Most Canadians cannot see this. They are spending more than they make and they sometimes don't even know it and if they do, they can't seem to figure out what the ramifications are of it.
 

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Discussion Starter #7
Agreed 100%.

There's also the phenomenon of "debt diversification" in which people (irrationally) hold different debts at different rates when they *could* consolidate into a single lower rate (i.e., HELOCs, as one example).
 

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I wonder how much of this can be traced to the availability of credit cards to teenagers, at one of the most impulsive and irresponsible periods of one's life? It's like smoking: kids get into the habit of debt early on, and it's seen as normal.

My 20-year-old stepdaughter is a case in point -- she got a credit card a couple of years ago when she turned 18, and maxed it out in one day of shopping. And then she kept charging and went over the limit. When the bills came in she just tossed them unopened in the trash, same with the letters from the collection agencies, until they finally tracked her down and started garnishing her paycheques. She did destroy her credit card, but still spends irresponsibly and always runs out of money at least five days before her next paycheque arrives. She's going to have a tough financial life ahead of her; she makes no real attempt to control her spending but just throws up her hands and says "this is the way I am, I can't help it."
 

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MoneyGal - thanks for letting us know about this show, it was a good one.

I found it interesting about their talk on how people have a disconnect between their own spending (its ok!) versus how government spends (all bad!) - never thought of it that way. I've just also unconsciously assumed people who preach fiscal constraint have their own house in order...perhaps not.
 

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Talking about governments. Another issue humanity will need to deal with is the fact that a natural side effect of democracy, is government budget deficits. Unfortuneately, these two go together like milk and oreos.

We would want to throw out any government that was running huge surpluses because it would mean that they were taxing us too much, taxing money that could be used to grow the economy and improve lifestyles. We do the same thing when they increase our taxes or cut our services that we enjoy. Sooooo... the only natural thing left for any politician is to borrow the money they need.

As we know, with governments as with the people, there is a limit to this. Look around the world. The only country I know that isn't wallowing in debt is China and guess what, they are not a democracy. My point isn't to discontinue democracy, but to identify its side-effect and deal with it as mature and responsible citizens and politicians.
 

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I watched this show as well, however I am embarassed to say that I nodded off a couple of times...anyway, they measure household debt in relation to annual household income. I think it would be more meaningful to the average person if debt was measured as a percentage of household income required to service the debt. For example, if a family has $200,000 in household debt (including mortgage) and that debt consumes 50% of their net income, that would hit home more than owing 1.46 times annual household income. Unfortunately, I don't think most people consider the big picture. I think they are more concerned with their bottom line and their continued ability to spend and consume.
 

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Discussion Starter #13
Looks like the feed is up now - you can watch the show online at the TVO "The Agenda" site.
 
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