by Tom Bradley
In our household, the concept of ‘full accounting’ gets talked about a lot (I know what you’re thinking … get a life!). It usually comes up when talking about environmental costs and how they aren’t fully captured by traditional accounting methods. We need to find a system that captures the full cost of a good or service.
The concept came to mind this week for a different reason. I read that Canadians’ net worth increased 5% in the first nine months of 2020. The improvement is being attributed to rising housing and stock markets, and government income support programs.
But are we looking at the right number? Is the accounting complete? Shouldn’t our country’s rising debt load be factored into the equation if we want a ‘fuller’ accounting of Canadians’ net worth.
Canada got through COVID as well as it did because the federal government spent $250 billion more than it took in. That’s close to $7,000 per man, woman, and child.
Obviously, the math isn’t perfect. The debt isn’t a liability on our individual balance sheets, and it won’t be paid off by my generation. For the most part, it will be future generations of taxpayers who deal with it. But as a proud Canadian, I can’t help think that our collective net worth did not go up by 5% in nine months.
We're not a bank.
Which means we don't have to communicate like one (phew!). Sign up for our blog to get the straight goods on investing.