Dear Mr. Trudeau,
Congratulations on the stunning majority that you and the Liberal Party of Canada have won as the result of Monday’s election. There is something larger than life about this victory. You brought your party from a distant third place to a decisive first. You did so against the backdrop of relentless negative attack ads aimed at you. You have summoned the richness of history with your name. Trudeau.
But I’m worried.
You have been refreshingly honest in stating that you intend to increase our national deficit in order to finance your promise of positive change. Honesty is a good thing. Positive change is a good thing. But debt isn’t.
I am among the majority of Canadians who have contributed to our nation’s record levels of household debt. As you know, our average household debt-to-income ratio has skyrocketed in the last few decades. In 1990, it sat at 93%, meaning that for every after-tax dollar earned, 93¢ was owed. Now it sits at 163%; we owe $1.63 for every take-home dollar earned in some form of debt. And the options are limitless: credit card debts, lines of credit, student debt, car loans, mortgages . . . Most of us don’t even notice the precarious situation in which we’ve put ourselves. We carry our debts comfortably, easily able to make minimum payments and always welcome to borrow still more to “make our dreams come true.”
But some of us know better. When income is suddenly diminished through job loss, divorce, death of a spouse, or illness – and when expenses suddenly surge with the unexpected – those minimum payments aren’t so comfortable anymore. That’s why our record breaking personal debt-to-income ratio is accompanied by our record levels of personal financial distress and personal bankruptcy.
Some of us are trying to change. To turn our financial reality around. To pay off debt and increase savings. To recognize the siren call of marketers and to ignore it. To turn our knee-jerk “yes” into a sobered “not yet”. Delayed gratification. Frugality. Budgets. They don’t seem like the stuff of “dreams come true” still marketed so effectively by those whose interests are served by our debts. But they are.
I woke up Tuesday morning to what really felt like a different country. I could sense the change despite my reservations. There was a boosted energy and the hope of new beginnings. I want to share in your optimism, and I want to believe that your promises are attainable.
One of my earliest memories is of holding up a sign that said “Trudeau” in 1968. I was four years old, and my parents were utterly inspired by the entrance of your father onto Canada’s political scene. Intelligence, wit, boldness, charisma – he had it all. And he captured the imagination of a nation with his vision of a just society, leading us to a broader and deeper embrace of the French language, to a celebration of our multi-cultural composition, to forward momentum in our assertion of women’s equality, to new freedoms, new rights. And debt. Lots more debt.
The past and the present are intertwined, but that doesn’t have to be a point of contention. It is possible to rise above condemnation, to build upon all that is good in the foundation that history has provided us, and at the same time, to face all that is harmful in it and declare a resolute “Not this time around!”
The normalization of debt has crept upon individuals and governments with the same insidious deceit. Pervasive financial distress is the result. Weakened nations are the result. Margaret Atwood’s book Payback: Debt and the Shadow Side of Wealth, timely in its 2008 publication, identifies debt as society’s latest addiction. Deeply rooted in systems of faith and law, the force of payback is one that we must not ignore. In disregarding it, we sabotage our financial present. The entitlement and the taker’s attitude that fuel indebtedness damage more than our money. With a broader understanding of debt beyond finance, and an application of payback to a pillaged planet, we must also recognize that by maintaining our state of denial, we threaten our future.
With a fierce wake-up call, a plan, and three years of working it, my husband and I have changed our financial reality significantly. We have faced our past errors with humbling honesty, and we’ve changed our direction with intention. We don’t finance our vision for our future with borrowed money, and that vision is becoming more and more attainable as our debt drops bit by bit by bit.
And so I can’t help but urge you, as you take on your new role and work towards the vision that has won your leadership of Canada, that you apply fierce and fearless honesty to all that must be corrected in our country. In pursuit of the social imperatives, yes, but also with respect for the financial imperatives that are so stubbornly connected to our well-being. Debt requires payback. My plea is that you approach it with caution and that you work with a zealous mission to reduce it.
I wish you well in the days ahead. I look forward to the fruits of your leadership. And although my optimism is cautious, I believe in you. Balance you passion with reason. Balance the books with honest, tough choices. Forge ahead with clarity. With prudence.
A Reformed Debtor