THE GLASS HOUSES OF PARLIAMENT
The Glass Houses of ParliamentA sincere thank you to our regulators, Ministers, MPâ€™s, etc. for your concern about my personal debt figures.
And thanks for channelling this concern into recent deep and drastic cuts to my personal (home financing) purchasing power. Although certainly chopping Canadian familiesâ€™ ability to buy a home in todayâ€™s rising market by a whopping 20% in one abrupt move seems a tad aggressive. Especially considering the many prudent cuts and measures introduced since 2008 which were enacted with reasonable industry consultation and reasonable rollout periods.
Again, thanks for the attention and concern for my own debt levels.
Perhaps we should talk about yours though; after all our nationâ€™s fiscal order is in your hands. And you seem to be paying a lot of attention to this debt-to-income topic. At least where it applies to my own household.
But how do things look for the federal governmentâ€™s debt-to-income ratio?
Letâ€™s have a peak at your (or our collective) â€œhouseâ€™sâ€ debt to income ratio. And since the metric does not factor in equity, net worth, savings, or any assets at all when applied to us, weâ€™ll leave them equally absent from this conversation.
Federal Gross income: $291.2 Billion
Federal Gross Debt: $1.056 Trillion
This appears to be a 363% debt-to-income ratio.
Why thatâ€™s twice our individual household debt-to-income ratio.
2.17 times higher to be precise.
And isnâ€™t my mortgage debt capped for complete payout at 25 or 30 years â€“ the maximum amortization allowable. Tell us again about the actual amortization timeline of the current national debt.
To Infinity and Beyond!
I believe the effective amortization of the national debt is currently just a touch beyond 25 years, or even 30 years; currently it sits at something closer to infinity. As happens when one steadily spends more than they make.
Perhaps you can tell us about your plans to get our nationâ€™s debt to income level reduced below 167% â€“ since this is apparently a concerning number. And once it is below 167% feel free to talk to me about my own debt-to-income ratio.
As things stand you look a bit like that guy at the party with seven shots of rye in him lecturing us all on how we should never consume more than three shots. Yet we are all going to get up tomorrow and work hard, and we had better because for all your worrying about us we need to hustle every day to cover your own fiscal imprudence.
Perhaps it is time for an early night, some introspection, and some internal house cleaning.
Same rules (ought to) apply.
Dominion Lending Centres – Accredited Mortgage Professional