The two countries took different approaches but both carry heavy loads of debt
A lot gets made of soaring U.S. government debt levels, while Canadian households are notorious for the debt loads they’re carrying, but when it comes to the total amount of debt outstanding relative to the size of the economy, Canada and the U.S. are eerily similar.That puts the U.S.
What sets the countries apart is the trajectory. Debt levels in the U.S. surged in the leadup to the 2008-09 financial crisis, as households borrowed massively because of that country’s housing bubble. That was followed by an extended period of U.S. deleveraging. Canada, on the other hand, took what Mr. Porter called a “slower burn” approach that nevertheless saw debt levels surge after 2015 as realreal rates are still half the level of the 1990s, even with the recent rise,” he wrote. “Second, as we always say, every dollar of debt is someone else’s dollar of asset.”