Madam Speaker, what would I do? Well, I have been telling them what to do for the last three years, and if they had listened, they would not be in the mess they are in today.
What can be done? Obviously, we have to find a way to bring rates down before those mortgages come up for renewal. As I said earlier, why did the rates go up in the first place? Government deficits led to higher inflation, which led to higher interest rates, which will lead to higher defaults. How do we reverse that? We bring down the government deficits so we can bring down the inflation, which allows the Bank of Canada to bring down interest rates, and this will allow us to bring down the defaults. That is my IKEA instruction manual for the hon. member today. That is obviously what we need to do to avoid the crisis that is ahead of us.
However, make no mistake, this is a crisis, and it is one that is coming quicker and quicker. It is like a train that is coming down the track, and if we do nothing to prepare ourselves to get off the track now, we will face that very real threat. Now, the member across the way might say “Oh, the debt crisis, who cares? That's something accountants and economists will fray about. They'll wring their hands and it will be discussions on business channels about what that means. Why should anybody really care?”
Well, let me tell members that a debt crisis is a massive humanitarian crisis. The human toll of debt crises is staggering. They produce massive unemployment, which leads to increased depression, suicide, alcohol and opioid addiction, overdoses and other miseries that we are already beginning to see.
Two Harvard economists who studied over 800 years of debt crises, Kenneth Rogoff and Carmen Reinhart, found that debt crises typically bring a 35% decline in house prices, leaving people with mortgages that are worth more than their homes. On average, GDP falls 9%, roughly twice the GDP drop during the COVID recession of 2020. Unemployment rises, on average, 7%, which lasts, on average, four years. That means not just a loss of livelihoods but also a loss of lives.
A University of Calgary study found that a 1% increase in unemployment increases the suicide rate by 2.1%. A paper by the British Journal of Psychiatry estimated that, in Europe and North America, the great recession is associated with at least 10,000 additional economic suicides between 2008 and 2010. There were 10,000 people who killed themselves. More people killed themselves during the great global recession in the United States than would otherwise have done so absent that financial crisis.
The same thing happened in Asia. According to researchers in the British Medical Journal, it is estimated that the 1997 economic crisis in Japan, South Korea and Hong Kong resulted in over 10,000 excess suicides.
The long-term job loss from a financial crisis would be at least as bad as what we experienced during the COVID lockdown with the devastating personal consequences. Unemployed men and women would have no job to go to in the mornings and nowhere they could afford to go in the evenings for recreation.
As a result, they end up isolated and alone. Many turn to alcohol and drugs. We are already seeing these pernicious mals exacting themselves on our people today.
Calls to one national suicide prevention line rose 200% over the period of COVID, according to CBC. That prompted one of our members, the member for Cariboo—Prince George, to introduce a bill creating the 988 suicide prevention line. Make no mistake, the forced unemployment that happened during COVID led to more suicides, and if we do have the kind of financial crisis I am trying to avoid, I am afraid to report to the House, then there will be similar desperation.
The number of overdose deaths in B.C. alone in 2021 was by far the highest on record, and more than twice as high as it was in 2019. In Ontario and Alberta, opioid deaths spiked almost 50% during the lockdown periods. All of this could be associated with unemployment. Researchers have found that, when unemployment in a country rises one percentage point, the opioid death rate jumps 3.6% and opioid overdose emergency room visits jump 7%.
When the Greek debt crisis happened, there were problems with wages, pensions and social programs, and desperate people flooded into the psychiatric units across the country. The Commissioner for Human Rights of the Council of Europe wrote in a report, “Most patients admitted under this regime are unemployed persons, bankrupt businessmen, or parents who have no means of taking care of or feeding their children. Most are reported to be over 40 years old and have never shown previous signs of mental illness.”
Then there are the painful government policies that follow debt crises. Some of the harshest austerity measures, of which we have been warned by the Prime Minister, happened in Greece under a Marxist government. It was led by something called the coalition of the radical left, an alliance of communist, eco-socialists and anti-capitalists.
Why would a party, that has an ideology that believes in boundless government programs, slash public spending so dramatically in Greece? It is for the same reason that the federal Liberal government slashed health care and 45,000 public servant jobs in the 1990s. It is the same reason that the Saskatchewan NDP, a party that credits itself with inventing Canada's medicare program, shut down 52 hospitals in Saskatchewan in the 1990s.
Why? They ran out of money. That is what real austerity is, it is when we run out of money. That is the result of major debt crises like the one I am trying to warn against right now, which proves that debt crises actually do not care about ideology. Numbers are not partisan. Merciless mathematics trump political philosophy in a debt crisis.
When the money is gone and no one will lend more, where the funds have been exhausted, how do we pay the wages of the public servants, the pensions of the retired, the hospital bills, the schools, the food and other essentials? As Pythagoras said, “numbers rule the universe”. Austerity is almost never a choice. It happens when irresponsible governments, like that one over there, make it mathematically unavoidable.
Harvard economists, Reinhart and Rogoff, also found that financial meltdowns cause government debt to further explode. It is an explosion within an explosion, and a crisis on top of a crisis. That is why it is always most humane to protect the country's finances in advance to avoid the need for austerity. That is what we, as Conservatives, do. We protect the finances, not just so that an accountant can be happy with the balance sheet, but because we care about health care, education and the social safety nets that we desperately need.
That is why we want to protect our finances. That is why we want to avoid the nasty and ruthless cuts that the Prime Minister has in store for this country if he succeeds in bankrupting the nation's finances. We have seen these ruthless mathematics under his father, who gave us not just inflation, but also stagflation. He was successful at delivering both record highs in inflation and unemployment at exactly the same time.
Look at the years of 1980 and 1983. During those years of the Trudeau debt crisis, unemployment and inflation both hit 12% at the same time. That means we had a misery index of 24. Inflation plus unemployment is the misery index. That drove interest rates up to an almost unimaginable 19% a year. I remember those days. In fact, some of my earliest memories—
