Needs, wants and debts
Lloyd Brown-John, Special to the Windsor Star
Published: Wednesday, December 29, 2010
I do not have a smartphone. I don't particularly want
one because I truly cannot think of any sufficient
reason to have one and, worse, to pay vast sums for a
privilege of having something I don't believe I need.
So all the inducements for new smart-phones with
toys galore have no impact upon me or, more
important, my income.
Speaking to the Economic Club of Canada in
Toronto earlier this month, Bank of Canada
governor Mark Carney noted that in Canada "credit
continues to grow faster than income."
He added that "without a significant change in
behaviour, the proportion of households that would
be susceptible to serious financial stress from an
adverse shock will continue to grow." Regionally,
home equity may be diminishing.
I may be considered Neanderthal -- old-fashioned -living in the past and so forth, but I'm not spending
hard-earned money on toys for which I really can
find no significant utility.
Carney's comment offers warnings if people are
willing to listen. Low interest rates seem to have
encouraged more personal debt and that debt is not
sustainable.
Because I grew up in a world where hard physical
labour was normal and where income either came
from hard work or not at all, I learned that what you
needed was not necessarily what you wanted. And
there is another sad aspect to this issue of need and
want.
What is intriguing about personal debt issues,
especially at this time of year, is how easy it is to
incur unsustainable debt loads.
But this apparent willingness to go into debt may
reflect another trend which has emerged over the
past 25 years.
For the first time, I recently visited a large
American-based big-box retail store. It is chained
about the world. Virtually every want I could have
imagined could be satisfied in largely inferior quality
products, most of which seemed to have been
manufactured in China or another developing
economy.
Those who endured wars, depressions and poverty
elsewhere have experience with tribulations of
meeting basic daily needs.
"A penny saved is a penny earned" and "saving for a
rainy day" are adages related to a realization that
over the long haul a few pennies/dollars saved may
be the difference between personal economic
survival and wipeout.
Even a Canadian big-box store I visited later was
loaded with stuff made largely in China.
So here's the lesson. Go into debt to buy stuff you
don't really need made in countries that ultimately
put you and many other Canadians out of work or at
limited work.
Needs defined in terms of sustenance and other
necessities of life are usually readily understood by
those who have endured a lack of plenty. But
somewhere along the way, many Canadians have
transposed "need" into pure and unrestrained "want."
Again, Bank of Canada governor Carney warned:
"Households need to be prudent in their borrowing."
Debt just for "wants" makes no sense.
So "I want a big-screen TV and I want an iPod and I
want a device which allows me to spend endless
hours communicating with friends, and I want trendy
clothes and I want expensive events tickets for sport
or concert, and I want...."
lbj@uwindsor.ca
© Windsor Star 2010
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Unauthorized distribution, transmission or republication strictly prohibited
But as so many people want the latest and the first,
do they really stop to question whether what they
want is what they need?
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