Britain’s stock and bond markets flopped Friday morning on new evidence that the country’s Labour Party leadership doesn’t have a clue what to do about the economy or budget. Add this to the list of welfare-state cautionary tales out of Europe.
At one point Friday morning, the yield on the benchmark 10-year government bond, or gilt, had risen 11 basis points to 4.55%. The main London stock index dipped nearly 2%, and the pound fell. This was in response to a Financial Times report Thursday night that Chancellor of the Exchequer Rachel Reeves is abandoning plans to increase income-tax rates in her budget plan this month.
This sounds like good news. but investors interpreted it as a sign that Ms. Reeves and her boss, Prime Minister Keir Starmer, have run out of politically viable ways to balance the government budget—which is true. Estimates of the budget “black hole” Ms. Reeves needs to fill range up to £30 billion per year—the gap between likely spending and revenue if current policies stay the same.
An attempt over the summer to cut some particularly generous welfare benefits collapsed amid a rebellion from Labour backbenchers in Parliament, putting welfare reform off the table. Mr. Starmer is rightly under pressure to increase defense spending. Labour’s promises of economic growth via public “investment” translate mainly to pay increases for government workers.
What can legislative and education leaders across the state do to protect core education services if funding is eliminated?
NASHVILLE, Tenn., November 10, 2025 (Newswire.com)
– As state agencies prepare to present their requested FY27 budgets to the governor and other budget leaders, In the Black, an initiative of the Millennial Debt Foundation, has released a white paper on the perils of too much reliance on federal funding.
The white paper titled “Reverse ESSER: A Framework for Safeguarding TennesseeEducation Amid Federal Uncertainty“ presents insights and policy recommendations to address the potential for substantial federal education funding losses. On the heels of the Tennessee General Assembly’s House Finance, Ways, and Means Committee series of hearings reviewing agencies’ budget histories, coupled with upcoming FY27 budget decisions, the timeliness of these recommendations is paramount.
Authored by In the Black’s Policy Director, William Glass, the white paper outlines key findings in how Tennessee successfully utilized the federal government’s Elementary and Secondary School Emergency Relief (ESSER) funds offered to Tennessee during the COVID-19 pandemic and how Tennessee, and other states, can take those best practices a step further and protect what matters most in public education should funding go away.
Some of the key findings include:
The Tennessee Department of Education developed a strategic template structure for districts that received ESSER funds with clearly defined categories for spending and assessment requirements. Instead of using the strategic template for assessing expenditures, In the Black recommends reversing the model to identify potential vulnerabilities resulting from funding loss.
Recommendations on developing a Reverse-Triage Template to identify possible solutions or strategies that can address various outcomes beyond the districts’ control.
Recommendations for state leadership to operationalize a Reverse ESSER model for addressing federal education funding shortfalls.
“Our elected officials cannot assume the same levels of federal funding for education will continue,” said Glass. “We have already experienced the turmoil when funds are withheld or even paused temporarily. It is incumbent upon states to develop strategic plans for addressing the shortfall without sacrificing the institutional readiness of our education system.”
The Reverse ESSER white paper is available on the In the Black website. You can also learn more about the In the Black movement, which is centered around the idea that fiscal stewardship is both important and achievable when citizens insist on it, at intheblack.org. Follow along on Instagram, Facebook, X, LinkedIn, and YouTube.
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ABOUT IN THE BLACK
In the Black is an initiative of the Millennial Debt Foundation, a nonpartisan 501(c)(3) dedicated to promoting fiscal stewardship in local and state policy. Founded by Hamilton County Mayor Weston Wamp and inspired by the late U.S. Senator Tom Coburn’s call to get government “back in black,” In the Black brings together generational leaders to address America’s long-term fiscal challenges. The organization is supported by individual donors, the Lynde and Harry Bradley
The Federal Reserve Bank of New York released its quarterly report this week, finding the total household debt in the United States increased by $197 billion, up to $18.59 trillion from the previous quarter.
A WalletHub analysis of TransUnion and Fed data found that average household debt increased by $275 to $975 from the second to the third quarter, depending on the state.
Why It Matters
Household debt is the total amount of money that members of a household owe to lenders, which may include mortgages, credit cards, auto and student loans, and other credit lines. The number shows how much people are relying on credit versus their cash income.
Voters cited affordability and the economy as top concerns in the November 4 off-year elections. Democrats notched key wins in several high-profile races, with many voters citing the difficult economic landscape today. The economy has been a key pillar of President Donald Trump’s administration, particularly in the form of tariffs.
What To Know
The New York Fed’s Center for Microeconomic Data found that mortgage balances grew by $137 billion, totaling $13.07 trillion at the end of September. Credit card balances grew at a slower rate, $24 billion, to a total of $1.23 trillion, while student loan balances rose by $15 billion, with a total of $1.65 trillion by the end of the quarter.
The report also noted that student loan delinquency rates are at 9.4 percent, compared to 7.8 percent in quarter one. It found that average delinquency rates remained elevated, reporting that 4.5 percent of outstanding debt in some stage of delinquency.
According to a WalletHub analysis of TransUnion and Federal Reserve data, Hawaii saw the largest average household debt increase, rising by $975 from the second to the third quarter.
California was a close second, experiencing a $880 average household debt increase, bringing the entire state’s total household debt to roughly $3.17 trillion. Colorado, Utah, and Washington shared similar average household debt increases, $832, $831, $824, respectively.
Donghoon Lee, economic research adviser at the New York Fed said in a November press release: “Household debt balances are growing at a moderate pace, with delinquency rates stabilizing. The relatively low mortgage delinquency rates reflect the housing market’s resilience, driven by ample home equity and tight underwriting standards.”
Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek for a story earlier in November: “When EBT cards aren’t reloaded on time, people often turn to what little credit they have left, whether that’s maxing out a credit card, taking a quick cash loan with astronomical rate, or simply going without essentials altogether.”
Ofek Lavian, CEO of San Francisco-based Forage, which helps grocers serve the 42 million Americans who rely on EBT to feed their families, told Newsweek for a different November story: “Delays in food assistance will push low-income families toward credit card debt and other predatory options, as they face the impossible choice between feeding their families in November or suffering long-term financial consequences.”
The Kobeissi Letter, a weekly commentary on global finances and markets, wrote in a November 6 X post: “US household debt surged +$197 BILLION in Q3 2025, to a record $18.59 trillion…Americans are piling on debt at a rapid pace.”
What Happens Next?
The next quarterly household debt report is likely to reflect the government shutdown’s hit to consumer spending and borrowing. The over month long closure has left hundreds of thousands of employees missing paychecks and disrupting millions of benefits.
Argentina’s stocks, bonds and currency surged Monday after the country’s midterm elections delivered a surprising mandate for President Javier Milei to press ahead with his free-market economic overhauls.
The Argentine peso rose around 9% against the U.S. dollar in midmorning trading, the most in more than two decades. A U.S. dollar-denominated government bond maturing in 2046 rose by 11 cents to trade at 66 cents on the dollar, according to Tradeweb data. Argentina’s benchmark stock index, the Merval, was up 17% as bank stocks soared.
The U.S. national debt has surged past $38 trillion, according to the U.S. Treasury Department, just two months after surpassing previous forecasts to reach $37 trillion in August. This means the federal debt rose by $1 trillion in a little over two months, which the Peter G. Peterson Foundation calculates is the fastest rate of growth outside the pandemic.
Michael A. Peterson, CEO of the nonpartisan watchdog dedicated to fiscal sustainability, said this landmark is “the latest troubling sign that lawmakers are not meeting their basic fiscal duties.” In a statement provided to Fortune, Peterson said that “if it seems like we are adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000.” The foundation’s analysis attributes the acceleration to a combination of deficit spending, rising interest costs, and the economic drag of the ongoing government shutdown.
Peterson emphasized that the costs of carrying this debt are mounting rapidly. Interest payments on the national debt now total roughly $1 trillion per year, the fastest-growing category in the federal budget. Over the last decade, the government spent $4 trillion on interest, and Peterson calculated that it will balloon to $14 trillion over the next 10 years. He said that money “crowds out important public and private investments in our future.”
Shutdown exacerbates fiscal burden
The partial government shutdown, now entering its third week, is compounding those challenges. Shutdowns have historically been costly, adding $4 billion to federal expenses during the 2018–2019 closure and $2 billion in 2013, according to federal estimates. Each day of stalled government operations contributes to higher short-term costs, delayed economic activity, and postponed budgetary reforms—effectively worsening the debt problem they often stem from.
Delays in fiscal decision-making also magnify long-term costs, as Treasury reports have repeatedly warned. For instance, the Treasury’s Bureau of Fiscal Service Financial Report for fiscal year 2024 included a description of an “unsustainable fiscal path” and an indication that “current policy is not sustainable.” Deficit reduction has lagged significantly behind the pace seen after previous economic crises, including the Great Recession, when Congress implemented stricter spending caps and fiscal reforms within a few years of recovery.
Debt ripples
Paying off just the interest on this debt threatens to ripple through the economy. A recent Yale Budget Lab report highlighted how ballooning federal debt exerts upward pressure on both inflation and interest rates, potentially constraining growth and lifting borrowing costs for households and businesses alike. Meanwhile, an analysis conducted by EY this year found that the national debt’s rising trajectory could lead to sustained job and income losses over time.
A complicating factor, somewhat, is the “significant” revenue being generated by President Donald Trump’s tariff regime, several analysts have noted. Apollo Global Management Chief Economist Torsten Slok said the $350 billion being generated each year was “very significant” in September. The Congressional Budget Office (CBO) found that the tariffs, as constructed in August, before an appeals court ruled many of them to be illegal, could cut deficits by $4 billion over the next decade. The ratings agency S&P Global reaffirmed the U.S. credit rating shortly before the appeals court ruled, saying that “broad revenue buoyancy, including robust tariff income, will offset any fiscal slippage from tax cuts and spending increases.”
Still, the U.S. credit rating is no longer top-rated at any of the three major ratings agencies, which have cited both unsustainable fiscal trends and recurring political gridlock. These downgrades have had immediate consequences, placing further upward pressure on borrowing costs and raising questions about the long-term global standing of the U.S. dollar as the world’s reserve currency. Relatedly, gold has been on a historic tear for much of 2025, before slumping to its worst sell-off earlier this week. Gold is still trading above the $4,000-per-ounce mark, a more than 50% increase year-to-date.
“Adding trillion after trillion to the debt and budgeting-by-crisis is no way for a great nation like America to run its finances,” Peterson said. “Lawmakers should take advantage of the many responsible reforms available that would put our nation on a stronger path for the future.”
The Treasury Department did not respond to a request for comment.
Finding out your partner has been keeping financial secrets from you—whether it’s hiding debt, concealing big-ticket purchases, or an undisclosed bank account—can be hurtful, and even a deal breaker for many couples. While it can be hard to trust your spouse again, experts say there are ways to navigate financial infidelity.
Often, people find out about financial betrayal the hard way. It’s either when a spouse feelstheir back is up against the wall and they decide to come clean, or the other half starts picking up on red flags, said Jeri Bittorf, a financial wellness co-ordinator with Resolve Counselling Services Canada.
Indications such as seeing your partner stressed about money even when you perceive things to be fine, or seeing a debt collection letter arrive, could mean something is wrong. “That might start tipping them off that there might be something a little bit more,” Bittorf said. Some people have also found out about financial infidelity while making bigger purchases that require a credit check, or during the mortgage renewal process.
It can have a cascading effect on the lives of both partners, such as negatively impacting joint financial goals or affecting both of their credit reports, she said. “Financial betrayal is a serious type of betrayal,” Bittorf said.
Can couples recover from financial betrayal?
Saijal Patel comes across cases of financial betrayal often in her line of work. Patel, the founder of financial consultancy and education firm Saij Elle, said one of the top comments she hears from clients is: “I learned my partner had all this secret debt, I had no idea, or I learned that they were giving away money to their family members without telling me.”
Patel recalled a client whose husband had racked up debt because of a tanking business, and her client didn’t know about it. Eventually, the couple lost everything and ultimately separated.
But not all financial dishonesties end in separations or divorces, she said. If a couple decides to work through it, Patel said it’s possible to get past financial betrayal.
Sellery said it’s important to understand the context. “The root cause matters,” he said. Start with the five Ws: who, what, where, when and why to get to the facts. Was the person hiding debt because they were helping a sick relative or because of substance abuse, for example. Frequency of dishonesty also matters—whether it was the first time or has this been a pattern, Sellery said. At the same time, communicate how the betrayal made you feel, he said. Talk about how it made you anxious, stressed or made you question your marital choices.
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Rebuilding trust—and your finances
Financial issues can also dredge up feelings of shame or guilt. Bittorf said the couple should seek counselling to understand where communication may have broken down.
If the dishonesty is debt-related, she said a financial planner can help you understand the full impact of the debt, the type of loans that were taken on and what budgeting would look like to get through the situation.
It’s also important to understand responsibilities, such as whether both partners would work equally at paying back this debt, or just the person responsible for it. “It’s really important that some really good boundaries are set and some really good expectations are set so both people in the relationship know exactly what their role is in moving forward,” Bittorf said.
Patel said agreeing to transparency in finances can help rebuild trust. She said the couple should figure out what may be their non-negotiables, such as having a joint account, scheduling regular check-ins, and sharing bank and credit card statements.
“Talk about those financial goals and your values,” she said. “When you have a shared goal … it’s much easier to get everyone on the same page,” Patel said.
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Choosing the right credit card for your stage in life
Credit cards that come with more perks and benefits are likely to carry an annual fee, which can be as high as $799. Most credit cards on the market though have fees closer to $120 per year, she said.
Macmillan said consumers need to look at where they are in their lives when applying for a credit card. For students and young adults, she recommended looking into a no-fee card, which can help build your credit score without the added expense of a fee. Macmillan said secured credit cards—which require a cash deposit—work great for people building or rebuilding their credit scores. These cards are more accessible compared with other kinds of credit cards and don’t carry a monthly or yearly fee.
For an early-career individual or a young professional who may have a better grasp on their spending habits, a fee-based credit card could help unlock perks that align with their lifestyle, Macmillan said.
But it’s important to do the math beforehand, said Melissa Leong, author of Happy Go Money. “Write down numbers. Write down the annual fee, maybe figure out the earn rate,” she said. The earn rate is the percentage or number of rewards you get for every dollar spent on the card.
Leong said if a credit card requires a minimum spending threshold to access its perks and it’s encouraging you to spend when you otherwise might not have, then it may not be right for you. “You’re trying to align the card to your life, not the other way around,” she said.
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Premium cards can pay off—if you use them wisely
Understanding your annual spending habits is key when applying for a fee-based credit card, said Jessica Morgan, founder and CEO of financial blog site Canadianbudget.ca. There are rules to earning rewards, she said. Some may offer higher rewards for spending money at a gas station, while others may have better perks for those who eat at restaurants often or travel avidly. “If those are categories that you are frequently spending in, then it might make sense to look at cards that align with that level of spending,” Morgan said.
Macmillan said cards with an annual fee typically offer higher reward rates, but they only make sense if you aren’t carrying debt. “The premium credit cards usually work best for individuals who use their credit cards often, who pay their credit card balances in full each month,” she said. They’re also only worth it if you’re using the perks.
With the higher cost of living nowadays though, more people have been opting for cash back credit cards because it can help offset daily expenses, Macmillan said.
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Leong likened fee-based credit cards to subscriptions, suggesting people set a calendar reminder ahead of the yearly fee renewal to assess whether it’s still worth the extra money. “Ask yourself a couple of questions: Did I use the perks it provides? Is it worth the value for the fee? And do I carry a balance?” she said.
Often, people think they’re going to use the perks of a fee-based card, but that doesn’t always happen. Leong said if people haven’t used the perks by the time the yearly fee renews, it’s unlikely that’s going to happen after the renewal.
Focus on paying down balances before chasing rewards
For those carrying a balance, Leong said the perks shouldn’t be a priority. Instead, they should opt for a low-rate, no-fee card and curb new spending until the balance is paid off.
Many Canadians carry multiple credit cards. Morgan said having multiple can give a bit more flexibility and backup. And if those cards are free, there’s no added cost. However, she warned not to apply for multiple credit cards at once because it can affect your credit score.
“Just be mindful of how frequently you’re applying for different cards,” Morgan said. “The best way to get the benefit of any credit card is to not have to pay any interest on it.”
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Since 2002, Sue has provided content creation, editing, and consulting services to corporate clients through her business CodeWord Communications. Here, she talks about her formative experiences along the road to becoming a self-employment expert—and the right way to use debt.
Who are your money/finance/investing heroes?
As a freelance writer, I had an early gig reviewing business books, several of which were financial. That gave me insight into the fact that people actually wrote books about money that helped demystify elements like the stock market and other terms. I wish money management had been taught in high school; I would have preferred that class over other math that I never use as an adult. Suze Orman was one of my favourites from those early reads for her practical advice and encouragement that anyone could understand and manage their finances.
How do you like to spend your free time?
I like walking—both in nature and cities—travelling, and seeing new places. I like reading and listening to podcasts and audio books. I also like writing fiction and poetry, although it’s sometimes exhausting to make time for creative writing after a full day as a professional writer.
If money were no object, what would you be doing right now?
I’ve always wanted to be a writer, but when I became an adult, I realized that I also needed to make a living. So I started working as a journalist and content writer. While I enjoy any kind of writing, I still like writing fiction, so I’d probably flip the time so that I’m writing my creative work during the day instead of after hours.
What was your earliest memory about money?
My earliest money memory was being given a dollar allowance from my parents for chores. (I was dusting and cleaning bathrooms; my younger brother was vacuuming. To this day these are our favourite chores. I love the quick fix of a good bathroom polish.) We would walk to our local depanneur in the Montreal suburbs and my brother would buy a big item, like a can of Coke or a chocolate bar, and I would stuff as much penny candy as I could into a little brown bag to last the week.
I think math became important for that transaction as I made the money stretch as far as possible (was it better to buy five gummy bears at two cents each or a 10-cent lollipop?). I also learned that different people want and value different things, as I never brought my brother over to my way of thinking nor converted to his.
What’s the first thing you remember buying with your own money?
Besides penny candy, I think a cassette tape of the soundtrack to the movie Cocktail. Also books from Scholastic.
What was your first job?
After babysitting, my first real job was as a cashier at K-mart, where I also worked in the garden centre when I was 15. I still remember the stress when your cash register tape jammed, and I can still tell the difference between impatiens and petunias.
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I’m not sure what I did with my first paycheque, although probably saved some for a band camp later that summer, which is when I had to quit because my manager wouldn’t give me the week off.
What was the biggest money lesson you learned as an adult? What would you do differently today?
Probably saving earlier. I recall a bank having an ad in the subway about the difference in results between the person who started saving at 23 years old and the person who started saving at 30. The problem is that I think I saw that ad at 28 so I felt already behind. Also, I hated that nerd who had the wherewithal to start saving at 23.
A related lesson as a freelancer was to save my money for income taxes and HST in a separate place so you have it when it comes to tax time. It’s very easy to spend if it isn’t in a separate account.
What’s the best money advice you’ve ever received?
Paying off debt with the highest interest rates first (i.e. credit cards). But also, I learned myself the advantage of having credit available (and saying yes to a lower-interest line of credit) as a way to balance out my freelance business since mostly I’m paid 30 days after I submit an invoice. I’ve also learned to proactively ask for a percentage up front if I’m working on a larger project—say 30% to 50%.
What’s the worst money advice you’ve ever received?
I haven’t received this advice directly, but I find all-or-nothing money advice annoying. Especially the one about how much you can save by avoiding fancy coffees. I’m not a fancy coffee regular but if that’s the spend that earns you an hour of work at a table in a coffee shop or picks up your day, then it’s fine. Treats are okay in moderation and money is also for buying a nice life today, not just saving for the future.
Would you rather receive a large sum of money all at once or a smaller amount of money everyweek/month for life?
As a freelancer, I regularly receive large sums of money at the middle and end of projects and then nothing for a few weeks, so I am curious what it would be like to have regular deposit every week.
What do you think is the most underrated financial advice, tip, or strategy?
Focusing individually on whether each purchase is a good idea. Just because something fits in your budget doesn’t mean it’s a reasonable splurge. I don’t think I’ve ever paid over $100 for a handbag, so if I see one priced at $500, that’s just not for me. Also knowing the current cost of items that you buy regularly so you’re not tricked by marketing or “sales” to think you’re getting a great deal. I know when the toilet paper really is a good sale.
What is the biggest misconception people have about growing money?
That there’s a magic age past which it’s too late. I started saving more in my 30s and I think it’s never too late. It just means I have a lot more room in my RRSP to continue filling up.
In July 2025, Canada’s unemployment rate hovered around 6.9%, with youth unemployment reaching 14.6%. Two in five Canadians say they’re worried someone in their household could lose their job, the highest level of job loss anxiety ever reported, according to MNP. At the same time, 42% of Canadians say money has been their biggest source of stress this year, and nearly half are losing sleep over it.
If you’re in between jobs and worried about how to cover your bills, protect your credit, or figure out what kind of help is available, you’ve come to the right place. In this article, we’ll walk you through how to prioritize payments, negotiate with creditors, and access unemployment relief programs so you can keep things manageable while you search for your next opportunity.
The first 48 hours: Triage your finances
The first few days after losing your job can feel overwhelming, but taking a few simple steps can help you regain a sense of control.
Start by adjusting your current budget or making a bare-bones budget that covers only essentials: housing, utilities, groceries, phone, internet, transportation, and minimum debt payments. Factor in any income you expect to have during this time, such as severance, emergency savings, or Employment Insurance (EI). This gives you a clear picture of what you need and where you might need to cut back.
Then, you’ll want to prioritize your expenses. Make housing your top priority, which includes rent or mortgage and utilities, then add in basic food costs and health needs. Secured debts (loans tied to assets, such as a vehicle) come next, followed by unsecured ones like credit cards.
Once you’ve got the essentials covered, you can look at any non-essential costs that you can trim. “Prioritize housing, utilities, food and transportation. If money is tight, try your best to keep secured debts current, as it is easier to negotiate with unsecured ones,” suggests Mike Bergeron, Credit Counselling Manager at Credit Canada.
It may be tempting to rely on payday loans or high-interest credit, but these can trap you in a cycle of debt. Safer alternatives might include taking an installment loan from a bank or credit union, talking to a non-profit credit counsellor about debt consolidation, or exploring hardship options with your lenders. While not all debts carry the same risk, be aware that missing payments can lead to added fees, damage to your credit score or collections.
Speaking to creditors: When to reach out and what to say
If you’re struggling to make payments, contact your creditors as soon as possible. It may feel uncomfortable, but reaching out early can open the door to options that help lower your payments and protect your credit. Many lenders offer hardship programs like reduced interest, lower minimums, or payment deferrals—but they won’t offer them unless you ask.
“One of the most common mistakes I see people make is avoiding their creditors when they lose their job,” says Bergeron. “The earlier you communicate your situation, the more options you’ll have. Most creditors would rather work with you than send your account to collections.”
When you get in touch, be direct and honest. You could say, “I’ve had a loss of income and want to keep my account in good standing. What hardship options are available?” Before agreeing to anything, ask: “Can you confirm how this will affect interest, fees, and my credit report?” If you’re offered a deferral or payment plan, clarify how long it lasts, whether interest continues, and when regular payments resume. Always get the full agreement in writing. This helps avoid surprises and gives you something to refer back to later.
If your account has already gone to collections, know your rights. Collectors must follow provincial laws and cannot harass or threaten you. You can ask them for details about the debt and any payment options, just like you would with a creditor. Stay calm, ask for everything in writing, and don’t feel pressured to agree to anything on the spot. Consult a credit counsellor if you need help dealing with collections.
Available support: Accessing government and non-profit resources
If you’re between jobs, there are programs across Canada that can help. Start by applying for EI as soon as you stop working, even if you haven’t received your Record of Employment yet (processing can take a few weeks). “Ensure that you have enough income coming in to support your expenses around the house, keep a roof over your head, and keep food on the table,” says Randolph Taylor, a certified Credit Counsellor with Credit Canada. Each province also offers its own emergency or income assistance programs that may help with urgent needs like rent, utilities, or basic living costs, depending on your situation.
You may also be eligible for utility relief programs, offered by many hydro and gas providers across the country, which can include bill deferrals, payment plans, or seasonal discounts. For help with day-to-day essentials, food banks, and community organizations can provide groceries and supplies with no cost or judgment. These resources are designed to support Canadians through temporary hardships like job loss.
If you’re struggling to manage debt while unemployed, consider reaching out to a non-profit credit counselling agency like Credit Canada for free one-on-one financial coaching and review your income, expenses, and debts to help build a realistic plan for your situation. Credit counsellors can walk you through options like debt consolidation, contact creditors on your behalf, and provide educational and budgeting resources.
Prioritizing payments: Which debts to handle first
When money is tight, it’s important to focus on the debts that carry the most risk. Start with secured debts, like your mortgage, rent, or car loan. Since secured debts are tied to an asset, missing these could lead to eviction, foreclosure, or losing your vehicle. If you’re falling behind, contact your landlord or lender early to ask about deferrals, rent relief programs, or adjusting your repayment plan.
Elon Musk’s SpaceX has reached a deal worth about $17 billion with EchoStar for spectrum licenses that it will use to beef up its Starlink satellite network.The deal for EchoStar’s AWS-4 and H-block spectrum licenses includes up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock. SpaceX will make approximately $2 billion in cash interest payments on EchoStar debt through November 2027.SpaceX and EchoStar will enter into a long-term commercial agreement which will allow EchoStar’s Boost Mobile subscribers to access SpaceX’s next generation Starlink Direct to Cell service.Shares of EchoStar surged more than 23% before the market opened Monday.Last month AT&T said that it will spend $23 billion to acquire wireless spectrum licenses from EchoStar, a significant expansion of its low- and mid-band coverage networks.EchoStar said that it anticipates that the AT&T deal and the SpaceX transaction will resolve recent inquiries from the Federal Communications Commission about the rollout of 5G technology in the U.S.EchoStar said Monday that it will use the proceeds from the sale partly to pay down debt. Current operations of Dish TV, Sling and Hughes will not be impacted, the company said.
Elon Musk’s SpaceX has reached a deal worth about $17 billion with EchoStar for spectrum licenses that it will use to beef up its Starlink satellite network.
The deal for EchoStar’s AWS-4 and H-block spectrum licenses includes up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock. SpaceX will make approximately $2 billion in cash interest payments on EchoStar debt through November 2027.
SpaceX and EchoStar will enter into a long-term commercial agreement which will allow EchoStar’s Boost Mobile subscribers to access SpaceX’s next generation Starlink Direct to Cell service.
Shares of EchoStar surged more than 23% before the market opened Monday.
Last month AT&T said that it will spend $23 billion to acquire wireless spectrum licenses from EchoStar, a significant expansion of its low- and mid-band coverage networks.
EchoStar said that it anticipates that the AT&T deal and the SpaceX transaction will resolve recent inquiries from the Federal Communications Commission about the rollout of 5G technology in the U.S.
EchoStar said Monday that it will use the proceeds from the sale partly to pay down debt. Current operations of Dish TV, Sling and Hughes will not be impacted, the company said.
The Pennsylvania State Employees Credit Union has tapped fintech Akuvo for debt management and collections services. PSECU selected Akuvo for its ability to drive efficiency and effectiveness across its collections operations, a spokesperson for the $9 billion credit union told Bank Automation News. Akuvo’s platform, which is 100% cloud-native, can onboard an FI in four […]
But it’s not all bad news behind the dire headline—and there is an opportunity to help young people, in particular, understand the difference between good debt and bad debt.
So, where’s the good news?
Total consumer debt in Canada was $2.55 trillion at the end of the first quarter (Q1) of 2025, up 4% year-over-year. That’s a huge number—and interestingly, almost twice the federal government’s record-setting debt of just over $1.4 trillion.
Still, that consumer debt number is down more than $6 billion from the end of 2024. While average non-mortgage debt rose to $21,859 per person in Q1 2025, there may be some valid reasons for it.
Age is a factor in debt acquisition
Debt, statistically, is a recurring issue for younger people. It makes sense that as people age, debt reduces—particularly when it comes to mortgage debt. Still, it is surprising how long both student debt and consumer debt linger, well into pre-retirement, as shown in the below data from mid-2024.
One of the key culprits right now, especially for young people, is a strong auto loan market, according to the Equifax Canada Market Pulse Quarterly Consumer Credit Trends and Insights Report. There may be valid reasons for this.
Car buyers appear to be reacting to the tariff tax issue, wishing to lock in their purchases before anticipated price hikes. To know if you can really afford a vehicle, do the credit math up front—and include not just the sticker price, but also the interest over the life of your car loan. How can you reduce that?
Seeking help from a tax or financial advisor to understand whether your car loans will be tax-deductible can also help reduce the after-tax cost. Some operating costs, like gas and oil or EV charging, and a portion of fixed costs like interest or capital cost allowances may be written off, with proper documentation, when the vehicle is used for employment or self-employment purposes. Speak to a tax specialist about that. (Also read: How to save on your taxes with automobile logs.)
The mortgage math
New mortgage applications jumped 57.7% year-over-year in Q1 2025. That’s due in large part to the number of mortgages that have come up for renewal and refinancing, many at higher interest rates. It is also interesting to note that first-time home buyers returned to the market, with activity up 40% from a year ago.
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But while average monthly payments may now be dropping due to current lower interest rates, the average loan size is increasing—by 7.5% year-over-year. It’s important to consider what the next renewal cycle might look like for today’s new debtors.
According to Bank of Canada research, 60% of those with mortgage renewals in the next two years will face payment hikes. The factors that push interest rates higher include things like high inflation, low savings rates, decreasing trade, a decrease in labour productivity, high government debt, and the risks of default. Many of those factors are in play today.
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Delinquencies: They’re in non-mortgage debt
When it comes to credit delinquencies, however, financial strain is actually worse for consumers who don’t hold mortgages. In this cohort, delinquency rates rose 8.9% year-over-year, compared to 6.5% for mortgage holders. Again, younger Canadians—those 18 to 25—were hit hardest, experiencing a 15.1% increase in delinquency rates.
On the positive side, the average monthly credit card spend per card holder fell by $107 during Q1 2025, which is the lowest level since March 2022.
Remember, not all debt is bad debt. When it comes to judging good debt vs. bad debt, there are a couple of simple but important rules:
Borrow for assets that appreciate. If you must buy a depreciating asset, make sure it is income-producing—that it helps you earn income from employment or self-employment, or from other investments like a business or rental property.
Consider whether the interest is tax-deductible. Consumer debt, for example, is bad debt—it’s expensive and not tax-deductible. Pay it off first unless you owe money to the Canada Revenue Agency (CRA), in which case that amount owed takes precedence.
Here are some effective waysto manage debt and take back control of your net cash flow:
1. Pay off high-interest, non-deductible debt as soon as possible. This includes credit card debt and high-interest loans, which can neither be written off on your tax return, nor used to build your net worth.
2. Consider consolidating debt to pay off smaller amounts first. Get rid of “debt clutter” but keep two categories: tax-deductible debt and non-deductible debt.
A leading national provider of accredited online graduate degrees endorses Georgetown University group’s report recommending disclosure of earnings and debt costs and calls on colleges to freeze tuition for five years.
INDIANAPOLIS, October 24, 2024 (Newswire.com)
– A new report from a respected Georgetown University research group finds that healthcare programs are among the most expensive for graduate students, contributing to high borrowing levels. American College of Education (ACE), one of the country’s top providers of accredited online graduate degrees, including master’s degrees online, endorses the report’s call for greater transparency on loan debt and return on investment and graduate programs nationwide to significantly reduce tuition costs.
American College of Education (ACE), founded in 2005, offers more than 60 accredited doctoral, specialist, master’s and bachelor’s degrees and graduate-level certificate programs. ACE is known for its quality, flexibility and affordability. ACE has not increased tuition since 2016 and 86% of its students graduate with no debt.
The Georgetown University Center on Education and the Workforce’s “Graduate Degrees: Risky and Unequal Paths to the Top” report documents that the cost of graduate education has more than tripled over the past 20 years, particularly in the healthcare fields in which 73% of students go into debt, compared to 53% across all fields.
The report highlights that healthcare students hold the most debt ($93,000 in inflation-adjusted dollars), significantly higher than overall ($50,000) across all fields of study. More than half (54%) of healthcare students end up with an average of over $45,000 in debt upon graduation. Additionally, the report states that student demand for graduate degrees in healthcare continues to rise, accounting for 24% of enrollments.
To protect students and maintain the value of a graduate degree, the researchers recommend assessing graduate health programs with a “debt-to-earnings test,” examining degree recipients’ federal loan payments in relation to their earnings, and an “in-field earnings premium test,” comparing the earnings of workers with graduate degrees to those without them.
ACE strongly supports the debt-to-earnings test, which would call for loan payments to not exceed 10% of the graduate’s median discretionary earnings. The debt-to-earnings test is particularly relevant to healthcare professionals.
“Given that healthcare professionals are burdened by significantly higher debt than their peers, at ACE we believe that the debt-to-earnings test is vital,” said Geordie Hyland, ACE’s president and CEO. “This approach is key to easing the financial strain of student loans and ensuring healthcare graduates can pursue advanced degrees without being overwhelmed by debt.”
ACE also endorses the in-field earnings premium test, which would ensure healthcare professionals achieve significant ROI on their investment in a graduate degree, earning at least 5% more compared to workers of a similar age and location without the degree.
An independent study by economists at labor market analysis firm Lightcast found a return of $19.20 in increased future earnings for every dollar a student invests in their education at ACE. This amounts to an average annual rate of return of 120.7%.
ACE also urges graduate schools to advocate for healthcare professionals by decreasing tuition costs without losing quality, eliminating non-value-added costs, and adopting new technology when possible.
“ACE calls for graduate schools to reduce tuition without compromising quality. Focusing on teaching and learning, leveraging technology, and eliminating non-essential costs will make education more affordable. Freezing tuition for five years is a smart, proactive move toward a sustainable and equitable model for higher education,” Hyland said.
ACE also improves affordability by choosing not to participate in federal Title IV financial aid programs, which reduces operational costs and reduces costs to students. The college also has a team dedicated to evaluating credit for prior learning (CPL) and extensive professional development content partnerships, which help students decrease the duration and cost of their program.
ACE also maintains a strong record of student success, with an 85% graduation rate, and more than 11,000 current students and 44,000 alumni. Students can complete ACE’s accredited online healthcare degrees in the comfort of their homes, on their own schedules, with free tutoring and student support services. Students can learn more by visiting ACE’s “Student Right to Know” at https://ace.edu/about/student-right-to-know.
Hyland will discuss ACE’s model of success in an upcoming The Future of Education podcast. For more information regarding ACE’s online healthcare degrees, please visit http://ace.edu.
About the American College of Education American College of Education (ACE) is an accredited, fully online college specializing in high-quality, affordable programs in education, business, leadership, healthcare and nursing. Headquartered in Indianapolis, ACE offers more than 60 innovative and engaging programs for adult students to pursue a doctorate, specialist, master’s or bachelor’s degree, along with graduate-level certificate programs.
17. 2018: Transitioning to more protectionist policies, the United States initiated a renegotiation of the North American Free Trade Agreement (NAFTA)—brought into force in 1994. The Canadian government worried it could significantly affect exports to the country’s largest trading partner. The conflict led to a short-lived but dramatic trade war. Canada, the United States and Mexico ended up negotiating a new trade deal—the United States–Mexico–Canada Agreement (USMCA)—which includes a sunset clause after 16 years.
18. 2019: The federal government was concerned about retirement security, with the decline of workplace pension plans and Canadians’ low savings rate. So, it expanded the Canada Pension Plan (CPP). The public pension plan will grow to replace 33.33% of Canadians’ average work earnings, up from 25%. Over the seven-year roll-out of the program’s enhancement, CPP contributions will also continue to increase.
19. 2020: The COVID-19 pandemic swept through the world, and it had dramatic repercussions on the economy. The federal and provincial governments enacted various degrees of lockdowns across Canada to try to contain the virus’ impact.
Image by Drazen Zigic on Freepik
20. 2020: The government spent hundreds of billions of dollars to pay for benefits that encouraged Canadians to stay home and practice social distancing, most notably, the Canada Emergency Response Benefit (CERB), which was a $2,000 taxable monthly payment. The government also loaned huge sums to businesses to support them through lockdowns that prevented many from operating. The high spending level is one of the factors that led to runaway inflation over the next few years.
21. 2021: Saving rates increased significantly during the pandemic at the same time that the Bank of Canada dropped interest rates to historic lows. Those factors and others led to a boom in Canada’s housing market. Previously, high prices had been mostly limited to major cities, but 2021 saw housing prices rise across the nation, exacerbating long-standing housing affordability issues.
22. 2021: The huge supply of money that entered the economy during the pandemic due to government spending and borrowing, plus supply chain disruptions, led to a dramatic increase in inflation. Houses, cars, groceries and other daily essentials all rose significantly in price.
23. 2022: The Bank of Canada started hiking interest rates rapidly to try to tamp down runaway inflation. Housing prices stabilized (and even fell slightly), but affordability remained an issue as some borrowers’ mortgage payments increased, even doubled. The stock market entered a slump, while prices on everyday goods like gas and groceries remained high, leading to frustration for many Canadians.
24. 2023: The federal government continued to increase its immigration targets to unprecedented levels, letting in millions of international students and low-wage, low-skilled workers under temporary worker programs. The surge in population challenged Canada’s already-tight housing market and strained health-care systems. Wages, which had begun to rise shortly after the pandemic because of labour shortages, started to stabilize. Widespread support for immigration, which had for decades been positive, began to waver.
It’s important to review your credit report and score at least once a year, especially when you’re trying to improve it. You can obtain your credit report and score through Canada’s two credit bureaus, a third-party service or your bank’s website or mobile app, as noted above. Doing so will not affect your score.
Look over the report to see what’s documented and ensure the information is correct. You can remove incorrect information at no charge by filing a dispute directly with the credit bureaus. Errors in your report or instances of identity theft can cause your score to be lower than it should be and addressing these errors could increase it dramatically. Look for things like:
Errors related to personal details such as phone number, reported addresses, birth date and full name
Incorrect accounts due to identity theft
Balances on accounts that have been paid off
Unauthorized purchases due to fraud
It can take time for errors to completely disappear from your credit report, so the sooner you address the issue, the sooner you can start the process of rebuilding your credit.
Even if there are no mistakes, the report provides an overview of your accounts, offering insights into how to enhance your credit and better manage debt.
2. Focus on paying down debt
A history of consistently paying down debts is a good starting point for improving your credit, and it’s something you can immediately take action on. Even if you only have one big bill, it’s important to prioritize paying it down. Paying at least the required miniumum amount, on-time, every time, is crucial for your credit score. And remember that carrying debt is expensive, so you’ll want to try to pay off these debts in full as soon as possible by putting more money towards the outstanding balances.
You can do this by creating a debt repayment plan using either the avalanche or the snowball repayment methods. Avalanche focuses on paying off the debt with the highest interest rate first. By prioritizing high-interest debt, you save money in the long run and can pay off your debts more efficiently. The Snowball method has you pay off the smallest debt first, which can provide quick wins and keep you motivated with each debt that gets knocked out. Each method has its pros and cons, so pick the one that best fits your financial situation.
3. Watch out for credit repair scams
Some companies claim they can fix your credit and solve your debt problems quickly—and you may be tempted to use their services if you have a less-than-perfect credit score. However, you can only rebuild credit—there’s no quick fix.
Credit repair companies may say they will fix your credit by removing negative information from your credit report to boost your credit score—for a costly, up-front fee. These companies often take advantage of the fact that many Canadians don’t know you accurate information cannot be removed from a credit report—even if it’s bad. Be cautious of companies offering credit repair services. It’s likely a scam if a company:
BOSTON — More than 700 health care workers will have millions of dollars in student loans paid off under a taxpayer-funded state repayment program aimed at easing workforce shortages.
The program, which launched in 2022, pays off up to $300,000 in college loans for eligible health care professionals in a variety of disciplines, including dental, medical, mental health and substance abuse.
The state Executive Office of Health and Human Services, which oversees the MA Repay program, announced a new round of disbursements this week totaling $14.6 million.
The latest round of loan repayments specifically targets direct care human service workers, supervisors and home health professionals, the agency said.
Health and Human Services Secretary Kate Walsh said the program provides “meaningful student loan relief to our dedicated human service and home health professionals.”
“Their work is vital to our communities, and these loan repayment opportunities are one way we can show how much we really value the people who do these important jobs,” she said in a statement.
The repayments are the latest under the program, which was approved as part of a $4 billion pandemic relief bill signed by Gov. Charlie Baker in December 2021.
The loan repayments are aimed at recruiting and retaining new workers in a sector of the state’s health care system that is traditionally among the lowest paid.
Under the program, psychiatrists are eligible for up to $300,000 if they are employed full time and $150,000 if they work part time. Psychologists can have up to $150,000 in loans repaid if they are full-time workers, $75,000 if they work part time.
Nurses, nurse practitioners, advanced practice nurses, physician assistants and social workers with master’s degrees who are employed in mental health settings can receive $25,000 to $50,000. Workers in those professions with bachelor’s degrees can get between $15,000 and $30,000.
Those who qualify must commit to working for at least four years in the state under a “service commitment” to receive the financial relief. That employment can be with up to two employers, according to the program’s requirements.
To date, the state has repaid $117.5 million in college debt for health care workers under the program, according to the state agency.
The Healey administration is planning another round of disbursements through the program totaling $61 million and targeting behavioral health workers. The agency began accepting applications earlier this month.
The state’s loan repayment program comes as federal efforts to ease the impact of crushing college debt – including President Joe Biden’s federal loan forgiveness program which was rejected by the U.S. Supreme Court – have been shot down amid court challenges.
In 2023, the U.S. Department of Education launched a policy called the Saving on a Valuable Education, or SAVE, plan, which it touted as “the most affordable repayment plan ever created.” The plan is estimated to cost about $156 billion over the next 10 years.
But Biden’s loan forgiveness plan is in jeopardy as he prepares to step down from office in January and a recent federal court ruling siding with Republican-led states that sued to block the program.
The plaintiffs, which include Alabama, Florida and Missouri, argue that the Biden administration exceeded its legal authority by enacting the student debt relief plan.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.
Well, you apply. But make sure you’re applying for the right card and that you have a high chance of being approved. You see, the credit card company will check your credit history, and that can affect your current credit score. So, don’t apply for a bunch and hope for the best, as that could make it look like you are at risk for having access to too much credit. The good news: There are many types of credit cards in Canada, including those for newcomers to Canada, students and even those with bad or no credit. Check out our rankings for the best credit cards in Canada for your situation.
Once you have a credit card you will want to maintain good credit habits, like paying it off on time and paying more than the required minimum payment. Here are some other articles that will help you navigating your first credit card in Canada.
Read:
Why is credit history important?
Say you want to rent an apartment. Your credit history is vital because most landlords will want to see your credit score and credit report to judge whether you’ll pay your rent on time. If you get the apartment, you’ll want an internet connection—and for this, too, the large providers will query your credit score.
If you need to buy or lease a car, your credit history will not only determine whether you’re approved for a loan, but also what interest rate you’re offered: the higher your credit score, the lower the interest rate. Insurance companies may check your credit history before providing coverage. And finally, if you want to buy a home, your credit history is key to qualifying for a mortgage, as well as what mortgage interest rates lenders will offer. A lower rate could save you tens of thousands of dollars over the life of your mortgage.
Read:
How to build a good credit history when you have no credit history
Credit history is usually built organically as people start using credit. In Canada, young people who have reached the age of majority (18 or 19, depending on where they live) can apply for a credit card and start building a history of borrowing and repayment.
If you’re a newcomer to Canada, or if you’re a student, recent grad or young adult who doesn’t have much of a credit history, your credit score may be low—which is a hurdle in getting approved for credit. It’s a frustrating cycle—you need credit history to access credit, and you need credit to build that history. So, what’s the solution? Here are a few steps anybody can take to build their credit history:
With a personal loan, you borrow a single (fixed) amount of money from a bank or other lender. In return, you agree to pay back the principal plus interest over a certain period of time. This is called “installment credit.” Often, personal loans are for specific expenses. For example, you might apply for a car loan to buy a vehicle, or a debt consolidation loan to reduce your debt. Personal loans can be secured with collateral or unsecured, and the amount you’re eligible to receive is tied to your credit history and financial picture.
When you’re approved for a line of credit, the bank, firm or lender extends a certain amount and you can borrow on an as-needed basis. Whatever you pay back, you can access the credit again, just like with a credit card. This is called “revolving credit.” You can use the money for any purpose you wish. Just like with loans, lines of credit can be secured or unsecured.
Here are the key differences at-a-glance.
Personal loan
Line of credit
Type of credit
Installment (non-revolving)
Revolving
Payment schedule
A fixed amount over a fixed time period.
As-needed, with a minimum monthly payment if you borrow
Interest rates
Fixed or variable
Usually variable, and tied to the Prime Rate (which is currently 6.45%.)
Interest applicability
On the whole loan
Only on what you borrow
Extra fees
Transaction or service fees
Transaction or service fees
Uses
A need specified when applying
Any purpose, no need to reveal
Pros and cons of a personal loan
Here are the pros and cons for personal loans.
Pros
Interest rates can be lower than with credit cards
The fixed payment schedule ensures your loan will be repaid by a certain date.
Cons
Typically higher interest rates than the majority of lines of credit.
To use more credit you have to refinance the loan or get a separate loan.
Lenders may charge fees for administering the loan.
There might be limitations on what you can spend the money on. A car loan is only for the purchase of a vehicle, which may seem obvious, but other loans may only be used for renovations or debt consolidation.
Pros and cons of a line of credit
Here are the pros and cons for lines of credit.
Pros
Typically have lower interest rates than personal loans.
Interest is only charged on the portion of credit used.
There is no fixed term so you can pay it off at any time without penalty (as long as you pay the minimum monthly amount).
The credit is “revolving”, meaning that once you pay it back you can borrow again without refinancing.
You can use the money for any purpose.
Cons
Interest rates are variable, based on the prime rate, so the loan rate will fluctuate. For example, you might have a line of credit where the interest rate is prime + 1.5%. As the prime rate changes, so will the total interest on your line of credit.
Lenders often offer the maximum amount which can make it easy to overborrow.
As there is no fixed payment schedule, you must manage repayment on your own.
A secured line of credit against your home (like a HELOC) will require a one-time appraisal as well as legal fees.
How interest rates work for loans and lines of credit
The interest you pay on a personal loan or a line of credit will depend on many factors including the lender, your credit history, the terms of the credit and the prime rate (in the case of variable interest). That said, these are the variables you can negotiate to get the best rates.
For a personal loan:
Interest rate Look for the lowest rate available to you, and decide whether you prefer a fixed or variable rate.
Fixed or variable rate Loans most often incur a fixed rate, meaning that the interest is the same throughout the term of the loan. With a variable-rate loan, the interest rate will change in the same direction as the prime rate.
Secured or unsecured You might negotiate a lower interest rate if you can secure the loan with collateral, such as a home.
Amortization period Amortization is the amount of time you take to pay off the loan and can range from six months to 60 months (five years) for personal loans, reports the Financial Consumer Agency of Canada. Adjusting your amortization period might affect your interest rate.
Fees or penalties Loans come with fees. With personal loans, for example, you may pay a penalty if you pay it off early.
“We saw some rare (price) appreciation during the time that consumers were purchasing these high-priced cars,” Daniel Ross of Canadian Black Book said of the auto market during the pandemic years.
Global supply chain disruptions stemming from the pandemic left the auto market with low inventory—and coupled with high consumer demand—auto prices surged, Ross said.
Some of those issues have since begun to normalize, allowing prices to ease, but it’s left some consumers owing more on their auto loan than the car is now currently worth. It’s referred to as negative equity, or being underwater.
As with the vast majority of vehicles, they’re a depreciating asset, so for those who purchased their car when prices were high, their “vehicle will continue to lose lots of value because it was probably overpriced at that time,” Ross said.
Should you trade in your car for a cheaper one?
On average, people who were underwater saw the negative equity in their cars climb to a record high of USD$6,255 in the second quarter this year, compared with USD$4,487 in the second quarter of 2022, a July report from auto retail platform Edmunds showed.
Trade-ins with negative equity also jumped, Edmunds said in its report.
“If you’re in a negative equity position, it’s not easy to get out of that,” Ross said.
For drivers who are in this situation, it’s better to drive that car into the ground and just keep paying off the loan, he said.
The federal government borrowed $1.9 trillion in the first eleven months of fiscal year 2024, including $380 billion in August, a startling amount as federal watchdogs sound the alarm on spending.
Those borrowing figures come from the the latest Monthly Treasury Statement from the Treasury Department.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that is roughly $6 billion borrowed per day this fiscal year
“America faces steep fiscal challenges in the very near future – next year alone, we’ll need to confront the multi-trillion dollar question of extending the 2017 tax cuts, we’ll need to raise the debt ceiling, and we’ll need to address the expiration of discretionary spending caps,” she said. “In just three years, the national debt will be at a higher share of the economy than any point in history. And in less than a decade, the Social Security retirement trust fund will go insolvent, leaving beneficiaries with automatic and across-the-board cuts without action.”
She said it’s time for former President Donald Trump and Vice President Kamala Harris to dig into the issues.
“Given these pressing deadlines, it’s more important than ever for the presidential candidates to take seriously the threats posed by high and rising debt and deficits,” MacGuineas said. “Yet the debate earlier this week was another opportunity for fiscal clarity that fell flat – instead, we heard far more about what the candidates propose for new spending and tax cuts than we heard about how they will pay for them.”
She said the candidates need to come up with a plan.
“Both elected officials and candidates for our nation’s highest office will need to pivot towards the specifics on deficit reduction – and soon – if we’re ever going to see a more responsible federal budget become a reality,” she said.
The research arm of Congress has given similar warnings. A Congressional watchdog told President Joe Biden and Congress in February that the federal government is on an “unsustainable long-term fiscal path.” The report from the U.S Government Accountability Office said federal spending levels couldn’t be supported long term.
“The federal government faces an unsustainable long-term fiscal path,” according to the U.S Government Accountability Office report. “We project that debt held by the public as a share of the economy will more than double over the next 30 years and will grow faster than the economy over the long term if current revenue and spending policies are not changed.”
U.S. Comptroller General Gene Dodaro said Congress must take action.
“Congress and the administration must act to move the nation off the untenable long-term fiscal course on which it is currently operating,” said Dodaro, who leads the GAO. “The federal debt level is growing at a rate that could threaten the vitality of our nation’s economy and the safety and well-being of the American people. Both spending and revenue issues need to be addressed as part of a comprehensive long-term plan.”
