It seems we’ve evolved from a world of prevention for protecting the public from a long list of hazards and perils to one that posts signs, like, “Use At Your Own Risk”. We see them everywhere. At beaches with empty lifeguard towers. At public and private facilities alike. Everywhere warning signs are posted to protect people from real dangers.
These signs seem to be a substitute for the real thing, such as trying to advise people with helpful details and preventative steps to avoid injury – or seriously discouraging people from going for a swim in a polluted river or lake – or by replacing real lifeguards or safety trained personnel with signs – or removing the danger.
It seems that warning signs protect merchants and governments from liability. It shields them from law suits by doing the very minimum. Signs have become proof that whatever happens on the other side of the sign, people have been duly warned.
Of course these signs don’t say, Do Not Use. (or perhaps build a fence to prevent trouble) I’ve wondered about that when I see children playing on polluted beaches.
The recent public warnings about escalating household debt seem to follow this successful example to prove that business and governments are doing their due diligence by warning Canadians there is too much household debt.
They don’t say, “Do not use household credit because it could be harmful to your financial health.” They don’t even say, “Use At Your Own Risk.” All we hear from time to time is how household debt in Canada is too high. The same root causes are blamed – low interest rates and the cost of housing in Ontario and British Columbia being held hostage by hot housing markets.
The current warnings in the media include:
- Household debt ratio grows in second quarter as debt increases faster than income
- Hot housing markets in B.C. and Ontario are pushing mortgage growth, despite softness in oil producing regions.
- Household debt in Canada continues to get heavier as the ratio of household credit market debt to disposable income climbed to 173.8 per cent from 171.0 per cent in the first quarter.
- The increased borrowing comes at a time of low interest rates.
- Overall, total household credit market debt amounted to $1.874 trillion at the end of the second quarter, up 1.8 per cent from the previous quarter.
There are no lifeguards on duty to rescue the casualties of high credit card interest rates or unaffordable housing. No tangible advice is given to a nation of debtors who have borrowed more each and every year since the 1970s, through periods of high and low interest rates, on how to stop borrowing.
It seems to me that neither governments nor the business community really want anyone to stop borrowing. They don’t want anyone shopping less. They just want to display their concerns in public, like a warning sign pointing the finger at a vague abstract phenomenon (hot real estate markets, low interest rates) that no-one controls.
Unfortunately, with credit and debt, no-one can shield themselves from the growing liabilities that accompany unaffordable housing, unaffordable day-care, unaffordable post-secondary education and insufficient wages for middle and lower income families. Everyone is paying a high price for these unspoken root causes that cry out for immediate attention and real action.