Introduction

Canadians have loaded up on personal debt through more than half a century of financial crises — and it’s happening again. During the first year of the COVID-19 pandemic, cash from federal benefits allowed many people to pay down their credit card balances. Last year, however, huge mortgages pushed Canada’s household debt-to-income ratio back toward its all-time high, rising above 177 per cent in the third quarter of 2021. Economist Michael Hudson says this kind of debt buildup chokes economic growth and gives undue power to creditors like banks. He also says it demands a reset: cancelling our debts. Today, Hudson explains the millennia-old practice of debt cancellation and how it could help modern economies.