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Did you know that the average Canadian household is more than $40,000 richer than the average American household? Part 2

[by Michael Adams , special to The Globe & Mail] Part 2:

Canadians have traditionally been the cautious, fiscally conservative society, watching American economic dynamism from a safe remove (and subsisting on a small cut of the branch-plant spoils). For us, paying off the mortgage was once the equivalent of forgiveness for our acquisitive sins. Our public policies were more prudent than the U.S. policy of allowing home owners to deduct the interest on mortgage debt. Canadian leaders rejected mortgage interest deductibility and fortunately Canadians only briefly embraced the subprime mortgages that are still a huge factor in Americans’ fiscal woes.

For the moment, it seems that the risk-averse Canadian tortoise has the lead in the race against the risk-taking American hare, who has singed his feet on his rocket pack. How Canadians will respond to this at the household level remains to be seen. Are we naively careering toward American-style (pre-crash) financial behaviour with loaded credit cards, second and third mortgages, and a lax approach to savings in a headlong pursuit of materialism, hedonistic pleasures, and instant gratification? Or does it say something about our abiding national character that we have so many sober souls in positions of power who will mete out regular scoldings like the clergy in pulpits of old and do things like change our mortgage rules to protect us from ourselves?

By Michael Adams , a president of the Environics Institute and the author of Fire and Ice: The United States, Canada, and the Myth of Converging Values.

Posted: Wednesday, July 18, 2012 9:00 PM by Oleh and Natalie Korchuk

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