It looks to me that, since Canadians are increasingly becoming reluctant (or unable) to take on more debt, their Governments are doing it on their behalf. I wish we had a public debate about our policy of trying to solve a financial crisis which was caused by too much debt by going even further into debt. Does it make sense to cure an alcoholic by giving them more alcohol? I think we have reached the "put a coin in the fuse box" stage of this financial crisis.

Moody's Investors Service, the New York-based financial rating agency, says the amount of unpaid Canadian credit card debt written off by issuers rose nearly 60 per cent to record levels in the second quarter compared with the same period last year.

"My opinion is that it's going to be a conservative Christmas," Laurie Campbell, executive director of the credit counselling agency Credit Canada, said in commenting on the report

"What we are seeing here is definitely higher debt loads - but more frighteningly - the serious inability to pay this debt," Campbell said.

"Canadians have had record debt levels and the result has been that now the chickens have come home to roost so to speak," she said.

"They're tapped out. They can't get more credit. The banks are shutting off the stream of credit because their losses are so great, which is one of the reasons that debt load has not increased."

http://www.google.com/hostednews/canadianpress/article/ALeqM5i0rf0FK_8KR7mo2nOijl8HE1BvBA

The Liberal government brought in legislation in 2002 to prohibit deficits.

Last December, when economists were predicting a slowdown, Hansen denied he might have to bring in a deficit budget this year.

"In British Columbia there is legislation that says deficits are illegal," Hansen said at the time. "So I will be bringing down on Feb. 17 a balanced budget."

But in February, he tabled a budget that forecast a deficit of $495 million for 2009-2010 and a shortfall of $245 million in 2010-2011. The no-deficit law was amended to allow two years of deficits.

In the fall session, another amendment will extend that to four years.

The government now expects to be back in the black by 2013-2014.

Earlier this week, Hansen told reporters that in the past three months, projected revenues had dropped by about $2.2 billion while expenses grew by more than $400 million, creating a $2.6-billion shortfall. Add that to the original deficit projection of $495 million, and it suggests a deficit for 2009-2010 topping $3 billion.

http://www2.canada.com/vancouversun/news/story.html?id=89f8a4a1-31be-4944-aa3a-0df3941469dc

Last fall the prime minister promised a balanced budget, as did all federal party leaders. Much has changed since then. The January budget projected a deficit of $34 billion. In May it was increased to $50 billion. Now the deficit figure has been upped to almost $56 billion. Since revenue has fallen by only $17 billion, this giant deficit figure reveals how massive over-spending is the key deficit culprit. In fact, from fiscal year 2005-06 through 2009-10 the Harper government will have increased program spending by $66.7 billion - a 38-per-cent increase in only four years.

Over at least seven years Harper plans to add no less than $170.3 billion more to the federal debt.

http://www2.canada.com/montrealgazette/features/viewpoints/story.html?id=1d53004c-888a-44a8-b8f8-93e74a78f1a6

You're right Charles... our whole economy is based on the injection of more debt like a big ponzi scheme... its all about consolidating the real ownership of wealth in the foreign bankers hands while Canadians take their beeds and stare at how shinny they are. At this rate it will not be long before we are a foreign owned subsidiary formally known as a sovereign nation.

I think the government sees hyperinflation around the world as the governments try to cash in on as much debt as they can while they still can... they are going to pay for this debt with hyperinflation taxation on the savers and conservative consumers. The world is awash in fiat currency and digitized dollars made from casino like gambling and pushed by national governments everywhere that distorts the true and real economy. Harper has abandonded any pretense of an economy based on the rule of law and a sound and accountible financial system... Harper has decided to swim with the globalization flow and play their game hoping the ponzi scheme can go on a while longer.

They have put off the crash with more debt.... only to make it worse when it does happen.