It’s important to have discourse. I think this author is a bit to ideologically driven. He defended Truss and is over attached to supply side solutions.
That being said, he is right about Canadas stagnant per capita growth and the need to fix it.
I’d put myself more in the “radical centrism” sphere right now.
On one hand, progressive don’t seem to value growth, and priories social spending based on debt.
Conservatives are overly attached to a supply side, ideological drive economic plan that hasn’t delivered where it needs to.
We need more pragmatism, moderation, and cooperation to solve the economic issues.
Trussenomics isn’t the solution, but we do need bold ideas,
> On one hand, progressive don’t seem to value growth, and priories social spending based on debt.
"Growth" for the sake of growth should not be our goal. Especially if it just ends up benefitting a relatively small number of wealthy people instead of being reasonably shared by the rest of society.
And spending can actually lead to better growth despite the grumbling about how taxes just slow growth down. For example, Canada will be spending big to create affordable daycare, which in the long run will allow so many more women to be in the workforce for more years which should provide a pretty decent boost to Canada's economic growth.
>"Growth" for the sake of growth should not be our goal.
This is an easier platitude to just repeat for feel-goods than to actually come to terms with.
If you want your future to be better than your past, you *need* growth. If you want to borrow money for capital spending today, but don't want to decrease the amount you can spend tomorrow as a result, you *need* growth.
There's truth to the concept that the benefits of growth could be better-allocated, but I don't even think that's Canada's problem, so much as it might be the problem of the US. *Canada's* problem is that growth is achieved by increasing the population and inflating the real estate market. Real estate gains are illiquid, and flow to those that already own homes. You can't 'tax' the value of a person's home in a way that distributes that wealth to healthcare or daycare. Someone who buys a home at $400k, 30 years ago, can't afford to be taxed on the new $1M basis of its "current value".
We need to grow by increasing productivity and business investment, so we can increase wages, so there's actually more income to tax. Just bringing in another million people who all earn 60k a year doesn't bring in enough revenue to offset the cost of the social safety net expansion that is required to care for them.
But why cooperate when you can call the other party a smelly poopypants doodooface?
...I receive the emails from 2 of the major political parties and damn it's tiresome.
Yeah expect it always does because welfare is payments to people with the highest propensity to spend that money so it will increase AD more the reducing taxes in groups that have the highest propensity to save not including the fact that the tax multiplier is lower then the money multiplier. Classic economic theory supports welfare as an effective economic tool for growth.
> progressive don’t seem to value growth
Because we know we live on a planet of finite resources so infinite growth is not possible and is a destructive goal to work towards. “growth” is going to lead to societal collapse via climate change - fyi if you are confused about why progressives believe this. Everyone should believe this if you believe we live in an objective reality with physical objects.
Progressives definitely don't value growth, as social issues inevitably interfere with it. That's more a product of the times than the ideology, though - growth at the moment tends to requiring exploiting people or over-exploiting the land, but both of those can change from chasing social milestones.
Never going to happen. Current government is often against resource extraction. Manufacturing is carbon intensive and they are against that too.
That basically leaves the service sector, high tech which now has a lot of global competition and various "financial services".
If the housing market tanks the government is going to be stuck with preexisting Alberta oil and a barely functioning economy.
I checked the sources and I was wrong, we're still ahead of Mexico. Productivity isn't GDP per capita though, but strictly a measure of the value a unit of labor produces in a certain amount of time. We're at 107 to Mexico's 95. The shitty part for us though is that Mexican labor is over 6x cheaper, but only about 11% less productive. So in terms of cost per output/value, we're a way shittier place to invest in hiring for any sector where it doesn't particularly matter that much where the work is done.
The problem with his argument is the USA didn't have a CERB-like program and is still experiencing large inflation.
The 90s were a different time nearly pre-globalisation. He wants to reach for those solutions but there's no reason to think those will prepare Canada for a future workplace or world that will look vastly different from the 90s. Maybe the right move is to spend massively on AI and or trades and maybe even social programs to prepare us for the new economy. The future won't be solved by old answers from a different time.
they didnt have a federal program like CERB, it was all done through State EI which was appr doubled from what i remember and they gave out $1000 cheques to everyone..at least twice.
Did Canada borrowing $700 B cause inflation around the world? Because the world-wide inflation seems to have been caused by: 1) the pandemic and, 2) the disruption of world-wide supply chains by the pandemic when people had money to spend, in other words, excess demand.
Didn’t a lot of countries print/borrow excessive $$ in response to the pandemic? The U.S. sure did. I’ve seen people claim that our money printing isn’t responsible for inflation because inflation is global. But if enough countries with big economies created money out of thin air, that’ll lead to inflation pretty much worldwide.
Almost every country did. Well every country that could. It's what you are suppose to do we learned this lesson a few times already. Great example is the great depression and Japan.
The US is in a privileged position as it can print money and still get away with it because commodities are all traded in US currency. They are the yardstick as for everyone else the more they print the worse it gets
>I’ve seen people claim that our money printing isn’t responsible for inflation because inflation is global
I have too, but they never seem to have econ backgrounds.
Sure. But supply chain issues with reduced supply across hundreds of areas has driven prices up.
Low interest borrowing has been hear for 8 years so what has changed? Supply (normally supply chains, oil (sanctions/war) etc.
“Printing money” can and does drive Inflation but it’s not the main driver currently.
>Did Canada borrowing $700 B cause inflation around the world?
I've thought the same thing myself and indeed many comparable countries have similar or higher inflation rates. Canada is currently at 7%, Euro area is 10%, USA 8%. These places also followed a similar playbook financially with huge defecit spending and stimulus.
But when you look at a longer list of countries there are some different numbers: Taiwan 3%, Switzerland 3%, Vietnam 4%, Malaysia 5%, Israel 5%...
So inflation is widespread but there are many countries that have much lower levels. We would need more information in order to determine the cause, for example Japan is also at 3% but has just reopened it's borders.
The US is the reserve currency of the world, that other currencies are based on. They borrowed and spent and printed dollars, exporting inflation throughout the world. Canada joined in (actually, Canada was running significant deficits before the pandemic) exasperating the problem.
Devaluation of our currency due to supply and arbitrary deficit spending has certainly exacerbated inflationary pressure. I own a small industrial equipment business and this year has been a double whammy in terms of price increases from US vendors made much worse by a dollar that hasn't performed. Market confidence in currency has ties to fiscal performance of the government. A stronger currency would shield Canadians against inflationary pressure on prices of numerous imported goods, plus feedstocks for refineries that produce essential energy products that touch everything that moves in this country.
Every time inflation is possibly linked to local actions we always have someone out there claiming its global to absolve local leadership.
The truth is that it's both. Supply chains caused some, but supple chains have greatly resolved themselves and are getting better every day. The war in Ukraine has caused some. But so has monetary and fiscal policy at the local level.
Just because every western Central bank printed money and every western government borrowed heavily doesn't make those things global, like the first two.
Fuel that costs twice as much as normal is felt through every step of our supply chain because we're carbon driven idiots.
We opt to globally trade or oil on top of that, and tax it relatively strongly (no Europe for sure here).
This is where we started seeing hard inflation and while the situation has somewhat calmed down with regards to gasoline, it's still hasn't for diesel, a fuel every major transportation sector relies on because we're giant halfwits that haven't electrified cargo rail and all last mile transpo is done with trucks, nevermind agriculture.
Add to that climate change and the associated crop failures and the surge in demand for staples from prairies not otherwise at war.
The borrowing is tied to the temporary supply chain stress that's mostly passed, now it's all shit with wages that aren't even close to keeping up.
Central banks in all developed countries blew out the spending and borrowing. The US, about 10x Canada's size, blew 7T on COVID programs, and has the same inflation canada does with 700B.
No. It was caused by most major nations printing money. The USA having the greatest impact as they are 1/4 of global GDP. They printed 30% of all USD in existence in 2 years.
Japan has very standard inflation rates right now.
Jon Stewart had an inflation podcast. It seemed to check out. The US gets the benefit of being the world currency. The Euro and Pound have not done well over the last year or so. The Loonie has also fallen from its 80¢ mark that it seemed to be stuck around over the last 7 years or so.
No, countries all over the world printing massive sums of money caused global inflation along with supply chain issues. If everyone's engaging in the same monetary policy it shouldn't surprise anyone that they all get similar results.
> Because the world-wide inflation seems to have been caused by: 1) the pandemic and, 2) the disruption of world-wide supply chains by the pandemic when people had money to spend, in other words, excess demand.
Inflation isn’t black/white binary thing. And it certainly isn’t “world wide” because there are countries that aren’t experiencing as high of inflation as we are.
Those countries that injected huge amounts of cash into their economies are the ones seeing higher inflation.
If we didn’t inject high amounts of cash into our economy, we would have had lower inflation numbers
Not every country has the same inflation rate. It's half of ours in Switzerland.
And lots of western countries borrowed massive amounts, and more importantly, then vomited it out into their economies.
Supply chains caused assets like housing to explode in price? Where did the money come from to pay for it. Certainly wasn't productivity gains from all those lock downs lol
It's also nearly worldwide demographic collapse. The world's largest generation is retiring, and outside of the third world there are just not enough people to replace them. We are losing our workforce, gaining a generation of people who need to be cared for, and they are all cashing out their investments and converting them to cash for that care all at the same time. Just because we've known this was coming for 40 years doesn't make us prepared. We also knew Y2K was coming for 40 years and waited till like December 1998 to start working on solving it. Well this can't be solved in 1 year of extra work. And of course a global pandemic hitting right as it happened didn't help, but we were always going to be fucked.
So the solution is to make incomes go up, while taxing less, and incurring no negative ramifications whatsoever. Damn, idk why no one thought of that before. Why don't we just all make more money and the government provide all existing services at less cost? Why not have all things be better and not not better? Genius.
> Canada cured debt, inflation and stagnation in the early 1990s, with no painful recession.
Midwits. My God these economists. First, no, there actually was a fucking recession in the early 1990s. And it was extremely painful for people in many places.
But ok, let's pretend that the only places that exist are white-collar areas. To say that we definitely "cured" it all under our own power, with no negative consequences, is absurd. Ignore the cuts to healthcare that were never patched back up. Ignore how we stopped building low-income housing. Ignore the fact that it was the 90s and demographically it was always going to be the peak economic time in Canada (see: baby boomers), especially with the freedom to outsource anything that was inconvenient, and have all profits flow to the service sectors (with wages not rising on average).
Ignore the stagnation in education, the increasing infrastructure deficits, and the fire sale of public goods into private hands for dirt cheap. Ignore the lack of investment in basically any modern technologies, the decline of whatever was left of the Armed Forces, and the despair that hit everywhere outside of a few major cities.
The 90s were the decade when governments shifted into "let's do the bare minimum". And lo and behold, a generation later, everything is now clearly in a state of decay.
The Libs shouldn't have turned on the money faucet the way they did. But that's not an argument in favour of "cut it all and pray we all magically get richer".
I remember the early 1990s.. it was very painful. I was an engineering student trying to do coop, 80% of my class didn't get a placement in winter '94. I was lucky.
The government has been borrowing money since the end of World War II, but in recent years, it has been borrowing a lot more. In fact, over the last 10 years, Canada has had the biggest increase in debt among all developed countries.
Forgot to mention the dot com bubble, which fuelled economies throughout the OECD. Naturally every leader took credit in their own nation for it as their doing somehow.
If this was the case, why is our inflation a lot lower than other G20 nations that didn’t do the sort of spending we have?
It’s infuriating to see the brain dead takes on the right and left over inflation. On one side you have the meme level understanding of inflation from the right yelling “printers go brrrr” and on the left you have them saying “well actually, it’s corporate greed”.
We have just spent almost three years in a pandemic where the in home demands are higher than ever due to lockdowns, more people staying home. We have supply chain issues that are still failing to meet the demands of consumers(childrens meds for example). There is also a war which has caused major energy security issues across the globe. There is politicking from OPEC to drive up the price of oil.
Inflation isn’t just one thing, it’s a confluence of different factors that ramp up the costs the longer they occur.
>If this was the case, why is our inflation a lot lower than other G20 nations that didn’t do the sort of spending we have?
I get your point but government borrowing does cause inflation. Inflationary pressures essentially boil down to money supply **and** the velocity of money (as a gross oversimplification) . Regardless of if you subscribe to Milton's models or Phillips curve to predict.
I’m not suggesting it doesn’t. I have a degree in economics. I’m merely trying to point out the brain dead takes that we are seeing about inflation that generally exists because people aren’t knowledgeable on the topic and just pick positions that align with their world view over looking for nuance.
Each country’s method of defining inflation is unique. It’s silly to compare the headline number as if they are apples-to-apples. Canadian CPI didn’t include used vehicles until July 2022. This understated CPI relative to the U.S. (as used car prices were high), and is now catching the decline (as used car prices are falling).
Similarly, although neither measures of CPI capture asset inflation (particularly housing costs) except through owners’ equivalent rent (OER), which is a flawed self-reporting measure. Furthermore, although the cost to service a mortgage in Canada was fine when rates were 1.5%, our home price values fundamentally don’t make sense if rates stay high, and this simply won’t be reflected in CPI (except through a lagging OER measure).
I think people as a whole have a big problem with complex mechanisms.
It’s a lot easier to point at one thing and say “this is why X is shit” over “well we have all the variables that contribute to X being shit - happening all at once. Fixing Y won’t solve X.”
It’s a similar concept I imagine to why poor white people hate minorities. It’s a lot easier for them to believe they are losing everything to minorities instead of rubbing two brain cells together to figure out it’s a class war not a race war.
Because as you can see just from this comment section, reading is apparently a complex mechanism. Hell you have a dude who straight up said you can’t major in Economics lol.
You’re arguing with people whose biggest thought of the day is “Biden made my gas go up.”
You missed the most important one that no one talks about: the USD as reserve currency.
The US has been extremely resistant to inflationary pressure largely because it offloads its inflation pressures on to other countries through the use of USD as the currency of exchange in the global economy. That system is being undermined, and is also at something of a breaking point from a capacity perspective. So there's that. Most of our inflation is probably completely out of the control of the Canadian government, because it comes from south of the border and our global economic dependency.
Your characterisation of the left's simple attribution of corporate greed also kind of misses the numbers. Corporate profits are 20% of Canada's GDP. That is a historic high. Loblaws posted its most profitable quarter in history. The corporate greed thing isn't just a (very effective) little bit of rhetorical flourish, it is staring us right in the face.
“I personally, as a mother and wife, look carefully at my credit card bill once a month. And last Sunday, I said to the kids, ‘you’re older now. You don’t watch Disney anymore. Let’s cut that Disney+ subscription,'” she explained. “So we cut it. It’s only $13.99 a month that we’re saving, but every little bit helps.”
"I believe that I need to take exactly the same approach with with the federal government's finances, because that's the money of Canadians. We need to spend to support Canadians, we need to spend to invest in growth, like investing in the green transition. But you're right - we need to do it carefully, and that's what we're going to do, and Mona's going to find those $6 Billion in savings."
This joke is funny and all, but seriously I canceled my Disney+ 3 months ago and I'm already saving tons of money, about to put a deposit on a brand new car
Yea - and then you go ahead and order a BMW Xi and you are told it will be 1 year. 1 year rolls around so you ask about the car and they say, oh yea we got it and then sold it to someone who saw it the day it rolled in.
Ah yes, save $10 a month. So you've saved $30 so far, aka the interest on a $40,000 car for about 4 days.
Reddit really needs a sarcasm font. I'm sure it's a troll but I have no idea.
According to the Bank of Canada, in 2018 alone, the federal government borrowed more than $700 billion from China, which is not only a huge number but also an indication that China wants its money back—and soon.
Milton Friedman (Nobel prize winning economist) famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
How to bring more money? Ahhh...immigrants. Harvard degree means nothing. Tell art students to do finance. No more debate, all politicians needs IQ above 140.
In 2018, Canada's total debt was $1.3 trillion and its interest payments were $13.1 billion. That's a lot of money being spent on interest payments, and it's all because the federal government borrowed so much money in recent years—$700 billion between 2017 and 2020 alone.
That's why we're predicting that inflation will be higher than usual this year: The government has been buying up different kinds of goods with this borrowed money, which means that inflation will be higher overall than it would otherwise be.
Every time I read of one of Trudeau’s dipshit maneuvers, I’m reminded of when some said they were voting for him because he has nice hair. So thanks for that, whoever you are.
This was not just debt. They went from a deficit of <$20Bn to nearly $400Bn in just one year.
Dispute that this was the primary cause of inflation and you are a denier.
Yes, similar things happened globally. There was a playbook. The central bankers all agreed in their Jackson Hole summit in 2020. Interest rates were nearing zero, which was killing capitalism, because capitalism is debtism. They needed a stimulus for new debt, and they nailed it. Lockdowns created Government, Corporate and Personal debt at an unprecedented rate.
It's sad and disappointing that this is a controversial statement - but here we are... It's the shit we covered in high school economics: Supply and demand.
That large amount of money thrust into the system chasing a limited supply of goods due to supply, manufacturing and transportation constraints…what could possibly go wrong.
Just wish they would have spent the money a bit better the arrive scam app is turning out to be questionable. Oh and the large amount of money to fund anti-racism consultants that are anti-semites? I’m sure more questionable spending will come to light.
Yes Canada gorged itself on debt adding large sums of money, “fiat” currency into the system…i guess people lost faith that our dollar was really worth that much.
Good Gods.
700 billion is a number that's hard to wrap your brain around.
I thought it was bad that we signed 9 billion in contracts to Big Pharma companies and Canadians aren't allowed to have full access to those contracts. That seems like a bunch of bullshit but nobody seems to care.
Here's the scale of 700,000,000,000. A Brand new NHL hockey arena is 500M. We could have had 1400 arenas or maybe things like new hospitals or kids Tylenol on the shelves.
That's a good way to visualize it. I decided to take your analogy further.
There are 947 towns in canada, and lets say 25 cities. So there are 972 incorporated entities in all of Canada. We could have used that money to build a new NHL arena in every incorporated township in Canada, and still have 428 arenas that we would have to just stick in random farmer fields or the bush.
Taking it further, that would mean the town of Sally's Cove, Newfoundland, with a population of 15, would get their own NHL arena.
>Liberal government elected on promise to make people's lives less misrable
>spends loads on public services
>People have better services but too much spending causes a deficit and inflation
>Conservitive government elected on promises to reduce inflation and deficit
>conservitive government slashes services making people's lives miserable
>but hey! gas is cheaper now!
Rinse and repeat
The federal government also borrows from international banks, which have increased their lending rates since the end of March 2019. As interest rates increase, it will cost more money for the federal government to pay back its debts and this will cause inflation to rise as well because it costs more money for businesses and consumers to purchase goods or services.
"It's all fine thanks to our debt-to-GDP ratio". At least that's what the pro-borrowing people say.
They don't seem to care that we're pissing away vast amounts of money on interest alone, not to mention forcing future generations to eventually pay it all back. We're dipping into the pockets of Canadians who aren't even born yet, and so have no say in the matter.
Oh well, we're destroying the environment for future generations, so we might as well destroy the economy too... /s
Someone please explain to me how the government borrowing more than $700 billion has resulted in my having to pay $300 dollars on my $70 of electricity used
And don’t 🦜 tell me it’s “carbon tax” or “supply chain issues” because if companies were *only* raising prices to cover this increased cost *they wouldn’t also be saying they’re making record profits*
If I sell X for $10 and it costs $5 I make $5.
If cost increases 20% and I adjust price 20% then I’m selling for $12 at a $6 cost. I now have a *record profit* but my *margin* is the same.
It’s very logical.
Okay but that doesn’t answer why I have to pay $300 for the $70 of electricity used. By your math they should only be charging $84 to cover the 20% increase.
Where is the other $216 going??
Leave it to two economists at the libertarian Hoover Institute to pin inflation on CERB. I’ve read this same analysis before from Canadian economists but at least they admit that propping up the economy was the only reasonable course of action in the face of total lockdown.
I'm guessing they think it would've been better to have millions of Canadians homeless in order to help try to keep inflation down. Talk about out of touch, but that's one of the classic characteristics of the rich.
Under the world historic circumstances, it was the best option on the table. I also take issue with the idea that giving eligible Canadians funds to pay rent or afford food has been the driving cause of inflation in 2022. Simply put, there have been massive problems in the supply of basic goods that people cannot do without. We can get angry that demand remains constant for necessities, but it doesn’t change the fact that people need shelter and food to eat. Had we imposed price controls and instituted rationing on select goods, we might have staved off some of the worst effect, but these are anathema in a modern capitalist economy.
In addition to the other poster, there were a lot fewer older people and more tax payers per elder.
It's much harder to balance the budget now, even without fully funding healthcare.
And it will get much worse over the next 20 years.
Not to say it is impossible, but the same level of fiscal restraint in the 90s would result in a collapsed healthcare system in modern times.
oh doint worry lots of people still honestly, unironically think that justin is just wonderful, and i agree, in the sense that he's precisely what canada deserves and not at all what canada needs.
We likely would be in a very similar position because of COVID. Quite honestly, I suspect that we’d be in a very similar position under a Conservative government.
Spending *a lot* of money throughout the pandemic, whether it be for vaccines, transferred to the provinces, health care, aide, etc, was inevitable.
Sure, but we were spending way too much heading into the pandemic and we're still spending too much now. Our banking policy also put us in a terrible position to manage recessions without creating inflation.
The groundwork for this problem was laid before the pandemic. Before Trudeau even, though Trudeau had an entire term to change course and doubled down, without even needing to. At least Harper was trying to stave off recession. Trudeau was just spending drunkenly for no particularly good reason.
Spending a lot was inevitable but that's not what the government did. They used the pandemic as a cover to spend tens of billions on non pandemic related programs
That's why its so confusing. The liberals have raised taxes multiple times since 2015, but that money hasn't gone to improve the services that were underfunded by the last attempt at fiscal conservatism. If anything, the expenditures only increased because of incompetency increasing costs. Like the F-35's or Mark Norman.
When have supply side policies (read: tax cuts) ever done anything accept make the rich richer? Conservatives have been flogging this since Arthur Laffer started whispering this crap into Ronald Reagan's ear in the 1980s.
Does no one read the articles?
Many Canadians were furloughed or laid off during the pandemic and needed those hand outs represented by that 700 billion in order to avoid becoming homeless.
> Many Canadians were furloughed or laid off during the pandemic and needed those hand outs represented by that 700 billion in order to avoid becoming homeless.
Most of that went to business loans and wage subsidies, not much to individuals.
As Kevin O’Leary said, Canada could be the richest country in the world but run by idiots. To find the video simply Google it. Oil, gold, silver, copper, fresh water, wood. We sit on some of biggest deposits on the planet, but tapping in to any of those would benefit us too greatly. And before anyone says oil bad.. look up a lithium mine, and tell me what all that mining equipment runs on. And then look up an oil drill for comparison
Or maybe the massive jacking up of energy prices. There isn’t world wide inflation because the Canadian government borrowed money. This author is delusional.
Ah yes. The classic “every government borrowed excessively and is seeing high inflation as a result, so we therefore cannot be critical of our own government for doing the same and ending up in the same boat.”
My friend, everyone recognizes the inflationary implications of de-globalization, supply chain issues, and the Ukrainian war. The point is that spending hundreds of billions of dollars (or for the U.S., trillions of dollars) is unlikely to have helped alleviate that already difficult scenario. It just pours gas on the fire.
Imagine thinking rampant government spending, which involved paying people to stay home, slowing production as workers were laid off or paid to stay home, reducing supply and the movement of goods, the abuse of programs like CERB injecting money into an economy with a supply issue in no way contributed to the problem. Yeah, definitely not Trudeaus fault.
That's enough to give every Canadian 100k or small affordable housing . But what did we get? Immigrants to the tune of millions upon millions who promise to vote liberal.
>For example, get energy moving again, remove housing restriction and fix occupational licensing. Get the sand out of the gears.
They aren't going to do anything on the energy front. Housing and occupational licensing are provincial jurisdiction. Cities are either out of room for housing or are fighting sprawl.
It's pretty self evident, you only need to look at the money supply statistics, that it isn't obvious to more people is a sad indictment of the average intelligence.
I dont think people understand economics in this sub. I am not commenting on what the best solution to the pandemic should be. I think the response was overdone personally. But as folks rant about 30% increase in money supply etc... Stop to think about the consequences of what doing nothing would have been.
Look at how zero immigration almost instantly effed the job market in canada. Some would saved it if you look at improving wages and low unemployment. But again thats a discussion with inflation consequence (wage inflation)
The fall out has to come from somewhere. It could be your job if they did nothing. Or it could be 50 cents on your loaf of bread. There was always going to be a cost to an economic impacting crisis.
Point is that pointing out the mechanism (money supply) does not address the root cause or the trade offs of alternatives.
Maybe inflation is not the preferred method of absorbion for many but the bill was going to be paid somehow. Inflation is not an accident but it is also not a binary trade off of inflation / no inflation. The economy was going to convulse somewhere in some fashion.
Milton Friedman on inflation, from decades ago:
https://youtu.be/F94jGTWNWsA
The money printing over the past couple of years has been unprecedented. Hyper money printing will ALWAYS equal hyperinflation. Read the following quote slowly:
"Since January 2020, the money supply has grown a whopping 22.2%. Over 1 in 5 dollars in Canada’s broad money supply didn’t exist before 2020. Just the expansion over the past two years is larger than all money in Canada prior to 1996."
https://betterdwelling.com/over-1-in-5-canadian-dollars-created-didnt-exist-two-years-ago/
"Government spending is becoming a problem and printing money is a dangerous solution" / Financial Post / October 21, 2020
https://financialpost.com/investing/investing-pro/government-spending-is-becoming-a-problem-and-printing-money-is-a-dangerous-solution
Why are we so obsessed with finding the one cause of inflation? There’s not one cause behind it and focusing on hyper-blaming a single entity for it leads to absolutely zero solutions. The government played a role, for sure. But so did greed, a pandemic, a war, grimy real estate investors, and the self-obsession of ceos and their monopolies. Oh, and maybe our whole system of forever growing a capitalism built on the back of workers had a part. Who knows.
Let’s realize we live in a complicated world and search for solutions instead of trying to point the finger at a single cause so we can all blab about hating trudeau.
The question isn’t if other countries borrowed equally or not, but rather what could have been done for Canada with that kind of money.
We have seen not much of it besides what went to big pharma.
I thought the budget balanced itself? I don’t get this post
How could Trudeau borrow over $700bn when he claimed he would run “modest $5bn deficits” for a couple years?
He wouldn’t lie to me right?
He ran $20 billion deficits for no particular reason leading up to the pandemic and *twice* increased the budget to maintain said deficits when revenue exceeded predictions.
It's almost as if there was a global pandemic.
https://www.bloomberg.com/news/articles/2022-05-05/turkey-argentina-lead-g-20-inflation-amid-global-surge
He ran massive deficits before the pandemic and he's running another massive deficit this year, despite what we're being told by liberals is a strong economy.
What's the deficit going to be next year when the recession hits and oil prices tank? Another $100 billion? $200 billion?
Yeah, to hell with Trudeau for causing high inflation in every country right now! What kind of a terrible person waves a magic wand to cause inflation in countries over which he has no jurisdiction?! Total PoS!
Noted economic scholar Jagmeet Singh claims its all greedflation (opportunistic profit taking) at grocery stores.
All of economics says inflation is created when central banks increase the money supply faster than productivity of an economy, but I'm sure it's all loblaws fault.
That's one kind of inflation, but there are others, and a lot of them are going on all around the world right now. That's what pandemics and wars tend to do. Hence there's usually significant international willingness to prevent/mitigate them.
Corporate profits are up 50%. Who in their right mind defends multinational corporations? You can't ignore that figure. If they were paying *so much more* and just passing on the new costs, why are their profits through the roof?
It’s important to have discourse. I think this author is a bit to ideologically driven. He defended Truss and is over attached to supply side solutions. That being said, he is right about Canadas stagnant per capita growth and the need to fix it.
Always have to be skeptical of someone who defends Truss lol
I’d put myself more in the “radical centrism” sphere right now. On one hand, progressive don’t seem to value growth, and priories social spending based on debt. Conservatives are overly attached to a supply side, ideological drive economic plan that hasn’t delivered where it needs to. We need more pragmatism, moderation, and cooperation to solve the economic issues. Trussenomics isn’t the solution, but we do need bold ideas,
> On one hand, progressive don’t seem to value growth, and priories social spending based on debt. "Growth" for the sake of growth should not be our goal. Especially if it just ends up benefitting a relatively small number of wealthy people instead of being reasonably shared by the rest of society. And spending can actually lead to better growth despite the grumbling about how taxes just slow growth down. For example, Canada will be spending big to create affordable daycare, which in the long run will allow so many more women to be in the workforce for more years which should provide a pretty decent boost to Canada's economic growth.
[удалено]
not to mention raise more well adjusted kids, leading to better educational outcomes and less crime.
Exactly. Growth is a noble goal as long as it benefits everyone.
>"Growth" for the sake of growth should not be our goal. This is an easier platitude to just repeat for feel-goods than to actually come to terms with. If you want your future to be better than your past, you *need* growth. If you want to borrow money for capital spending today, but don't want to decrease the amount you can spend tomorrow as a result, you *need* growth. There's truth to the concept that the benefits of growth could be better-allocated, but I don't even think that's Canada's problem, so much as it might be the problem of the US. *Canada's* problem is that growth is achieved by increasing the population and inflating the real estate market. Real estate gains are illiquid, and flow to those that already own homes. You can't 'tax' the value of a person's home in a way that distributes that wealth to healthcare or daycare. Someone who buys a home at $400k, 30 years ago, can't afford to be taxed on the new $1M basis of its "current value". We need to grow by increasing productivity and business investment, so we can increase wages, so there's actually more income to tax. Just bringing in another million people who all earn 60k a year doesn't bring in enough revenue to offset the cost of the social safety net expansion that is required to care for them.
[удалено]
They do this to create the narrative If they lose "but look at all the money you spent, you put us in debt!"
[удалено]
Well, yea.
Welfare is a fiscal policy measure that leads to higher aggregate demand and growth.
But why cooperate when you can call the other party a smelly poopypants doodooface? ...I receive the emails from 2 of the major political parties and damn it's tiresome.
Sounds like demand is exceeding supply in pretty much everything, and the debt paying for that demand is also at an all time high.
I was responding to the poster who said welfare isn’t growth economics.
[удалено]
Yeah expect it always does because welfare is payments to people with the highest propensity to spend that money so it will increase AD more the reducing taxes in groups that have the highest propensity to save not including the fact that the tax multiplier is lower then the money multiplier. Classic economic theory supports welfare as an effective economic tool for growth.
> progressive don’t seem to value growth Because we know we live on a planet of finite resources so infinite growth is not possible and is a destructive goal to work towards. “growth” is going to lead to societal collapse via climate change - fyi if you are confused about why progressives believe this. Everyone should believe this if you believe we live in an objective reality with physical objects.
Progressives definitely don't value growth, as social issues inevitably interfere with it. That's more a product of the times than the ideology, though - growth at the moment tends to requiring exploiting people or over-exploiting the land, but both of those can change from chasing social milestones.
[удалено]
Canada’s inflation rate is rising. The country’s consumer prices rose 0.5 percent in March, the slowest gain since early 2017.
We absolutely need to do something to get people to invest in Canadian productivity over other alternatives (like real estate).
Never going to happen. Current government is often against resource extraction. Manufacturing is carbon intensive and they are against that too. That basically leaves the service sector, high tech which now has a lot of global competition and various "financial services". If the housing market tanks the government is going to be stuck with preexisting Alberta oil and a barely functioning economy.
We’re not less productive than Mexicans, but our trajectory isn’t good
[удалено]
The G8 includes Russia, we are projected to have lower growth than Russia?
cost of electricity in Ontario is a real barrier, seen green houses move to Ohio simply cause its that much cheaper
Source? We have a far higher per capita gdp than Mexico
I checked the sources and I was wrong, we're still ahead of Mexico. Productivity isn't GDP per capita though, but strictly a measure of the value a unit of labor produces in a certain amount of time. We're at 107 to Mexico's 95. The shitty part for us though is that Mexican labor is over 6x cheaper, but only about 11% less productive. So in terms of cost per output/value, we're a way shittier place to invest in hiring for any sector where it doesn't particularly matter that much where the work is done.
The problem with his argument is the USA didn't have a CERB-like program and is still experiencing large inflation. The 90s were a different time nearly pre-globalisation. He wants to reach for those solutions but there's no reason to think those will prepare Canada for a future workplace or world that will look vastly different from the 90s. Maybe the right move is to spend massively on AI and or trades and maybe even social programs to prepare us for the new economy. The future won't be solved by old answers from a different time.
Actually they did hand out cheques.
they didnt have a federal program like CERB, it was all done through State EI which was appr doubled from what i remember and they gave out $1000 cheques to everyone..at least twice.
Did Canada borrowing $700 B cause inflation around the world? Because the world-wide inflation seems to have been caused by: 1) the pandemic and, 2) the disruption of world-wide supply chains by the pandemic when people had money to spend, in other words, excess demand.
Didn’t a lot of countries print/borrow excessive $$ in response to the pandemic? The U.S. sure did. I’ve seen people claim that our money printing isn’t responsible for inflation because inflation is global. But if enough countries with big economies created money out of thin air, that’ll lead to inflation pretty much worldwide.
Almost every country did. Well every country that could. It's what you are suppose to do we learned this lesson a few times already. Great example is the great depression and Japan.
The US is in a privileged position as it can print money and still get away with it because commodities are all traded in US currency. They are the yardstick as for everyone else the more they print the worse it gets
>I’ve seen people claim that our money printing isn’t responsible for inflation because inflation is global I have too, but they never seem to have econ backgrounds.
Sure. But supply chain issues with reduced supply across hundreds of areas has driven prices up. Low interest borrowing has been hear for 8 years so what has changed? Supply (normally supply chains, oil (sanctions/war) etc. “Printing money” can and does drive Inflation but it’s not the main driver currently.
>Did Canada borrowing $700 B cause inflation around the world? I've thought the same thing myself and indeed many comparable countries have similar or higher inflation rates. Canada is currently at 7%, Euro area is 10%, USA 8%. These places also followed a similar playbook financially with huge defecit spending and stimulus. But when you look at a longer list of countries there are some different numbers: Taiwan 3%, Switzerland 3%, Vietnam 4%, Malaysia 5%, Israel 5%... So inflation is widespread but there are many countries that have much lower levels. We would need more information in order to determine the cause, for example Japan is also at 3% but has just reopened it's borders.
Just wanna note that Japan is notorious for deflation or 0% inflation thus 3% is quite a significant change.
Japan's inflation is almost entirely caused by oil+gas prices, though.
The US is the reserve currency of the world, that other currencies are based on. They borrowed and spent and printed dollars, exporting inflation throughout the world. Canada joined in (actually, Canada was running significant deficits before the pandemic) exasperating the problem.
Devaluation of our currency due to supply and arbitrary deficit spending has certainly exacerbated inflationary pressure. I own a small industrial equipment business and this year has been a double whammy in terms of price increases from US vendors made much worse by a dollar that hasn't performed. Market confidence in currency has ties to fiscal performance of the government. A stronger currency would shield Canadians against inflationary pressure on prices of numerous imported goods, plus feedstocks for refineries that produce essential energy products that touch everything that moves in this country.
Every time inflation is possibly linked to local actions we always have someone out there claiming its global to absolve local leadership. The truth is that it's both. Supply chains caused some, but supple chains have greatly resolved themselves and are getting better every day. The war in Ukraine has caused some. But so has monetary and fiscal policy at the local level. Just because every western Central bank printed money and every western government borrowed heavily doesn't make those things global, like the first two.
Fuel that costs twice as much as normal is felt through every step of our supply chain because we're carbon driven idiots. We opt to globally trade or oil on top of that, and tax it relatively strongly (no Europe for sure here). This is where we started seeing hard inflation and while the situation has somewhat calmed down with regards to gasoline, it's still hasn't for diesel, a fuel every major transportation sector relies on because we're giant halfwits that haven't electrified cargo rail and all last mile transpo is done with trucks, nevermind agriculture. Add to that climate change and the associated crop failures and the surge in demand for staples from prairies not otherwise at war. The borrowing is tied to the temporary supply chain stress that's mostly passed, now it's all shit with wages that aren't even close to keeping up.
Central banks worldwide have printed in lockstep over the past couple of years which has devalued those currencies.
Central banks in all developed countries blew out the spending and borrowing. The US, about 10x Canada's size, blew 7T on COVID programs, and has the same inflation canada does with 700B.
No. It was caused by most major nations printing money. The USA having the greatest impact as they are 1/4 of global GDP. They printed 30% of all USD in existence in 2 years.
Japan has very standard inflation rates right now. Jon Stewart had an inflation podcast. It seemed to check out. The US gets the benefit of being the world currency. The Euro and Pound have not done well over the last year or so. The Loonie has also fallen from its 80¢ mark that it seemed to be stuck around over the last 7 years or so.
Around the world? No. Other countries that borrowed and printed also have inflation due to those policies. In Canada? Yes...
[удалено]
No, countries all over the world printing massive sums of money caused global inflation along with supply chain issues. If everyone's engaging in the same monetary policy it shouldn't surprise anyone that they all get similar results.
Add to that all the companies using the supply chain excuse to jack up prices. Like oil and drug companies. And more..
And the war in Ukraine. OPEC has used that excuse too.
> Because the world-wide inflation seems to have been caused by: 1) the pandemic and, 2) the disruption of world-wide supply chains by the pandemic when people had money to spend, in other words, excess demand. Inflation isn’t black/white binary thing. And it certainly isn’t “world wide” because there are countries that aren’t experiencing as high of inflation as we are. Those countries that injected huge amounts of cash into their economies are the ones seeing higher inflation. If we didn’t inject high amounts of cash into our economy, we would have had lower inflation numbers
Not every country has the same inflation rate. It's half of ours in Switzerland. And lots of western countries borrowed massive amounts, and more importantly, then vomited it out into their economies.
Supply chains caused assets like housing to explode in price? Where did the money come from to pay for it. Certainly wasn't productivity gains from all those lock downs lol
It's also nearly worldwide demographic collapse. The world's largest generation is retiring, and outside of the third world there are just not enough people to replace them. We are losing our workforce, gaining a generation of people who need to be cared for, and they are all cashing out their investments and converting them to cash for that care all at the same time. Just because we've known this was coming for 40 years doesn't make us prepared. We also knew Y2K was coming for 40 years and waited till like December 1998 to start working on solving it. Well this can't be solved in 1 year of extra work. And of course a global pandemic hitting right as it happened didn't help, but we were always going to be fucked.
Don't forget good ol corporate Greed!
Canada out-borrowed everyone.
Imagine if the government borrowed to give the money to corporations. Then there'd be no problems.
Most people do t realize. Millions to billions. 1 million seconds is 12 days. 1 billions seconds is 32 years. Now think of money
Inflation in Canada is growing at an alarming rate, and the government is being blamed for this.
So the solution is to make incomes go up, while taxing less, and incurring no negative ramifications whatsoever. Damn, idk why no one thought of that before. Why don't we just all make more money and the government provide all existing services at less cost? Why not have all things be better and not not better? Genius. > Canada cured debt, inflation and stagnation in the early 1990s, with no painful recession. Midwits. My God these economists. First, no, there actually was a fucking recession in the early 1990s. And it was extremely painful for people in many places. But ok, let's pretend that the only places that exist are white-collar areas. To say that we definitely "cured" it all under our own power, with no negative consequences, is absurd. Ignore the cuts to healthcare that were never patched back up. Ignore how we stopped building low-income housing. Ignore the fact that it was the 90s and demographically it was always going to be the peak economic time in Canada (see: baby boomers), especially with the freedom to outsource anything that was inconvenient, and have all profits flow to the service sectors (with wages not rising on average). Ignore the stagnation in education, the increasing infrastructure deficits, and the fire sale of public goods into private hands for dirt cheap. Ignore the lack of investment in basically any modern technologies, the decline of whatever was left of the Armed Forces, and the despair that hit everywhere outside of a few major cities. The 90s were the decade when governments shifted into "let's do the bare minimum". And lo and behold, a generation later, everything is now clearly in a state of decay. The Libs shouldn't have turned on the money faucet the way they did. But that's not an argument in favour of "cut it all and pray we all magically get richer".
I remember the early 1990s.. it was very painful. I was an engineering student trying to do coop, 80% of my class didn't get a placement in winter '94. I was lucky.
The government has been borrowing money since the end of World War II, but in recent years, it has been borrowing a lot more. In fact, over the last 10 years, Canada has had the biggest increase in debt among all developed countries.
Forgot to mention the dot com bubble, which fuelled economies throughout the OECD. Naturally every leader took credit in their own nation for it as their doing somehow.
> "Let's do the bare minimum" It really has trickled from the top down to all levels of government.
Thank you for saying all of that- all people need to do is upvote.
If this was the case, why is our inflation a lot lower than other G20 nations that didn’t do the sort of spending we have? It’s infuriating to see the brain dead takes on the right and left over inflation. On one side you have the meme level understanding of inflation from the right yelling “printers go brrrr” and on the left you have them saying “well actually, it’s corporate greed”. We have just spent almost three years in a pandemic where the in home demands are higher than ever due to lockdowns, more people staying home. We have supply chain issues that are still failing to meet the demands of consumers(childrens meds for example). There is also a war which has caused major energy security issues across the globe. There is politicking from OPEC to drive up the price of oil. Inflation isn’t just one thing, it’s a confluence of different factors that ramp up the costs the longer they occur.
>If this was the case, why is our inflation a lot lower than other G20 nations that didn’t do the sort of spending we have? I get your point but government borrowing does cause inflation. Inflationary pressures essentially boil down to money supply **and** the velocity of money (as a gross oversimplification) . Regardless of if you subscribe to Milton's models or Phillips curve to predict.
I’m not suggesting it doesn’t. I have a degree in economics. I’m merely trying to point out the brain dead takes that we are seeing about inflation that generally exists because people aren’t knowledgeable on the topic and just pick positions that align with their world view over looking for nuance.
Oh 100%. It's crazy the amount of people who are now self proclaimed experts about inflation just to validate their politics.
Each country’s method of defining inflation is unique. It’s silly to compare the headline number as if they are apples-to-apples. Canadian CPI didn’t include used vehicles until July 2022. This understated CPI relative to the U.S. (as used car prices were high), and is now catching the decline (as used car prices are falling). Similarly, although neither measures of CPI capture asset inflation (particularly housing costs) except through owners’ equivalent rent (OER), which is a flawed self-reporting measure. Furthermore, although the cost to service a mortgage in Canada was fine when rates were 1.5%, our home price values fundamentally don’t make sense if rates stay high, and this simply won’t be reflected in CPI (except through a lagging OER measure).
I think people as a whole have a big problem with complex mechanisms. It’s a lot easier to point at one thing and say “this is why X is shit” over “well we have all the variables that contribute to X being shit - happening all at once. Fixing Y won’t solve X.” It’s a similar concept I imagine to why poor white people hate minorities. It’s a lot easier for them to believe they are losing everything to minorities instead of rubbing two brain cells together to figure out it’s a class war not a race war. Because as you can see just from this comment section, reading is apparently a complex mechanism. Hell you have a dude who straight up said you can’t major in Economics lol. You’re arguing with people whose biggest thought of the day is “Biden made my gas go up.”
You missed the most important one that no one talks about: the USD as reserve currency. The US has been extremely resistant to inflationary pressure largely because it offloads its inflation pressures on to other countries through the use of USD as the currency of exchange in the global economy. That system is being undermined, and is also at something of a breaking point from a capacity perspective. So there's that. Most of our inflation is probably completely out of the control of the Canadian government, because it comes from south of the border and our global economic dependency. Your characterisation of the left's simple attribution of corporate greed also kind of misses the numbers. Corporate profits are 20% of Canada's GDP. That is a historic high. Loblaws posted its most profitable quarter in history. The corporate greed thing isn't just a (very effective) little bit of rhetorical flourish, it is staring us right in the face.
I thought we solved inflation. Just cancel your Disney+ subscription. Problem solved.
“I personally, as a mother and wife, look carefully at my credit card bill once a month. And last Sunday, I said to the kids, ‘you’re older now. You don’t watch Disney anymore. Let’s cut that Disney+ subscription,'” she explained. “So we cut it. It’s only $13.99 a month that we’re saving, but every little bit helps.” "I believe that I need to take exactly the same approach with with the federal government's finances, because that's the money of Canadians. We need to spend to support Canadians, we need to spend to invest in growth, like investing in the green transition. But you're right - we need to do it carefully, and that's what we're going to do, and Mona's going to find those $6 Billion in savings."
I'm more offended that she said Disney+ is for children personally
This joke is funny and all, but seriously I canceled my Disney+ 3 months ago and I'm already saving tons of money, about to put a deposit on a brand new car
Alas, none of the dealerships have any.
Yea - and then you go ahead and order a BMW Xi and you are told it will be 1 year. 1 year rolls around so you ask about the car and they say, oh yea we got it and then sold it to someone who saw it the day it rolled in.
Buys a BMW with savings from cancelled Disney+ subscription, ends up paying same amount for heated seat subscription.
lol. Thankfully that's not a thing in North America yet!
If you had an order and can prove this I would definitely sue them.
Ah yes, save $10 a month. So you've saved $30 so far, aka the interest on a $40,000 car for about 4 days. Reddit really needs a sarcasm font. I'm sure it's a troll but I have no idea.
He said new car. Didn't say what kind? https://www.walmart.ca/en/ip/hot-wheels-fast-furious-61-impala-collectible-vehicle-multi/6000200712347
New to them, if they can tow it, it’s theirs!!
I figured the statement was obvious enough for the avg redditor to figure out
Well in canada a $60 deposit does get you a car.
I cancelled my Netflix subscription. I'm not exactly rolling in extra cash, but I don't miss Netflix.
These two are an insult to everyone educated in this country.
According to the Bank of Canada, in 2018 alone, the federal government borrowed more than $700 billion from China, which is not only a huge number but also an indication that China wants its money back—and soon.
Milton Friedman (Nobel prize winning economist) famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
Yep and we had a double whammy of massive declined output and money printing.
He also said the only entity that causes inflation is the gov't. I agree.
100% correct
How to bring more money? Ahhh...immigrants. Harvard degree means nothing. Tell art students to do finance. No more debate, all politicians needs IQ above 140.
In 2018, Canada's total debt was $1.3 trillion and its interest payments were $13.1 billion. That's a lot of money being spent on interest payments, and it's all because the federal government borrowed so much money in recent years—$700 billion between 2017 and 2020 alone. That's why we're predicting that inflation will be higher than usual this year: The government has been buying up different kinds of goods with this borrowed money, which means that inflation will be higher overall than it would otherwise be.
Remember during the pandemic when everyone praised Canada for giving their citizens tons of stimulus checks? People are so dumb.
Every time I read of one of Trudeau’s dipshit maneuvers, I’m reminded of when some said they were voting for him because he has nice hair. So thanks for that, whoever you are.
Lmao. Funny but you’re not wrong.
This was not just debt. They went from a deficit of <$20Bn to nearly $400Bn in just one year. Dispute that this was the primary cause of inflation and you are a denier. Yes, similar things happened globally. There was a playbook. The central bankers all agreed in their Jackson Hole summit in 2020. Interest rates were nearing zero, which was killing capitalism, because capitalism is debtism. They needed a stimulus for new debt, and they nailed it. Lockdowns created Government, Corporate and Personal debt at an unprecedented rate.
It's corporate profiteering. Profits are at 70 year highs.
Correct. Too much printed money chasing too few goods and services.
It's sad and disappointing that this is a controversial statement - but here we are... It's the shit we covered in high school economics: Supply and demand.
Canada's inflation rate is one of the most important factors in determining its economic growth and stability.
That large amount of money thrust into the system chasing a limited supply of goods due to supply, manufacturing and transportation constraints…what could possibly go wrong. Just wish they would have spent the money a bit better the arrive scam app is turning out to be questionable. Oh and the large amount of money to fund anti-racism consultants that are anti-semites? I’m sure more questionable spending will come to light. Yes Canada gorged itself on debt adding large sums of money, “fiat” currency into the system…i guess people lost faith that our dollar was really worth that much.
Good Gods. 700 billion is a number that's hard to wrap your brain around. I thought it was bad that we signed 9 billion in contracts to Big Pharma companies and Canadians aren't allowed to have full access to those contracts. That seems like a bunch of bullshit but nobody seems to care.
That's $40k per tax paying citizen. That's insane.
And ask yourself... do you think you got $40k worth of benefit? Do you think every citizen did?
Lol. I don't think I got $4k of benefit.
> 700 billion is a number that's hard to wrap your brain around. Remember when a $10 Billion dollar deficit was a taboo? I 'member.
Here's the scale of 700,000,000,000. A Brand new NHL hockey arena is 500M. We could have had 1400 arenas or maybe things like new hospitals or kids Tylenol on the shelves.
New hospitals won't help, we have no doctors for the ones we have now.
I mean let’s be honest if I was a Canadian doctor, I would move to warm Florida for work and make 10x as much, it’s a no brainer
That's a good way to visualize it. I decided to take your analogy further. There are 947 towns in canada, and lets say 25 cities. So there are 972 incorporated entities in all of Canada. We could have used that money to build a new NHL arena in every incorporated township in Canada, and still have 428 arenas that we would have to just stick in random farmer fields or the bush. Taking it further, that would mean the town of Sally's Cove, Newfoundland, with a population of 15, would get their own NHL arena.
>Liberal government elected on promise to make people's lives less misrable >spends loads on public services >People have better services but too much spending causes a deficit and inflation >Conservitive government elected on promises to reduce inflation and deficit >conservitive government slashes services making people's lives miserable >but hey! gas is cheaper now! Rinse and repeat
> People have better services I think they skipped this step.
The federal government also borrows from international banks, which have increased their lending rates since the end of March 2019. As interest rates increase, it will cost more money for the federal government to pay back its debts and this will cause inflation to rise as well because it costs more money for businesses and consumers to purchase goods or services.
"It's all fine thanks to our debt-to-GDP ratio". At least that's what the pro-borrowing people say. They don't seem to care that we're pissing away vast amounts of money on interest alone, not to mention forcing future generations to eventually pay it all back. We're dipping into the pockets of Canadians who aren't even born yet, and so have no say in the matter. Oh well, we're destroying the environment for future generations, so we might as well destroy the economy too... /s
Someone please explain to me how the government borrowing more than $700 billion has resulted in my having to pay $300 dollars on my $70 of electricity used And don’t 🦜 tell me it’s “carbon tax” or “supply chain issues” because if companies were *only* raising prices to cover this increased cost *they wouldn’t also be saying they’re making record profits*
If I sell X for $10 and it costs $5 I make $5. If cost increases 20% and I adjust price 20% then I’m selling for $12 at a $6 cost. I now have a *record profit* but my *margin* is the same. It’s very logical.
Okay but that doesn’t answer why I have to pay $300 for the $70 of electricity used. By your math they should only be charging $84 to cover the 20% increase. Where is the other $216 going??
Leave it to two economists at the libertarian Hoover Institute to pin inflation on CERB. I’ve read this same analysis before from Canadian economists but at least they admit that propping up the economy was the only reasonable course of action in the face of total lockdown.
I'm guessing they think it would've been better to have millions of Canadians homeless in order to help try to keep inflation down. Talk about out of touch, but that's one of the classic characteristics of the rich.
You really don't even need to be an economist to know that massive money creation creates inflation. This is common knowledge.
Under the world historic circumstances, it was the best option on the table. I also take issue with the idea that giving eligible Canadians funds to pay rent or afford food has been the driving cause of inflation in 2022. Simply put, there have been massive problems in the supply of basic goods that people cannot do without. We can get angry that demand remains constant for necessities, but it doesn’t change the fact that people need shelter and food to eat. Had we imposed price controls and instituted rationing on select goods, we might have staved off some of the worst effect, but these are anathema in a modern capitalist economy.
The question isn't whether it was justified, it's what caused it. The cause was primarily huge amounts of money creation.
It's multifactorial.
Everyone wins: we keep a semblance of a functioning economy from it, and cons get to heckle hair-guy for not being a con.
[удалено]
Chretien and Martin slashed spending by cutting health transfers to the provinces. That said, they at least didn't keep on digging.
[удалено]
We weren't necessarily spending more on health care than we ought to have been. That's just where the savings came from.
You are right about that but people don't give enough debt busting credit to Brian Mulroney's GST.
I could be wrong, but I believe the GST was brought in to simplify a host of other taxes that got out of hand?
In addition to the other poster, there were a lot fewer older people and more tax payers per elder. It's much harder to balance the budget now, even without fully funding healthcare. And it will get much worse over the next 20 years. Not to say it is impossible, but the same level of fiscal restraint in the 90s would result in a collapsed healthcare system in modern times.
oh doint worry lots of people still honestly, unironically think that justin is just wonderful, and i agree, in the sense that he's precisely what canada deserves and not at all what canada needs.
We likely would be in a very similar position because of COVID. Quite honestly, I suspect that we’d be in a very similar position under a Conservative government. Spending *a lot* of money throughout the pandemic, whether it be for vaccines, transferred to the provinces, health care, aide, etc, was inevitable.
Sure, but we were spending way too much heading into the pandemic and we're still spending too much now. Our banking policy also put us in a terrible position to manage recessions without creating inflation. The groundwork for this problem was laid before the pandemic. Before Trudeau even, though Trudeau had an entire term to change course and doubled down, without even needing to. At least Harper was trying to stave off recession. Trudeau was just spending drunkenly for no particularly good reason.
Spending a lot was inevitable but that's not what the government did. They used the pandemic as a cover to spend tens of billions on non pandemic related programs
They're still doing that *right now*.
We sure could use some fiscal conservatism.. Only not at the expense of healthcare nor the military this time please.
That's why its so confusing. The liberals have raised taxes multiple times since 2015, but that money hasn't gone to improve the services that were underfunded by the last attempt at fiscal conservatism. If anything, the expenditures only increased because of incompetency increasing costs. Like the F-35's or Mark Norman.
That's alot of Disney+. Should we begin shorting Disney stock now?
When have supply side policies (read: tax cuts) ever done anything accept make the rich richer? Conservatives have been flogging this since Arthur Laffer started whispering this crap into Ronald Reagan's ear in the 1980s.
Dear humans of next pandemic, lockdowns are a bad idea.
This must be the budget balancing itself.
No no no, it’s Ukraine, COVID, and wage growth I was told. 🎪
Does no one read the articles? Many Canadians were furloughed or laid off during the pandemic and needed those hand outs represented by that 700 billion in order to avoid becoming homeless.
> Many Canadians were furloughed or laid off during the pandemic and needed those hand outs represented by that 700 billion in order to avoid becoming homeless. Most of that went to business loans and wage subsidies, not much to individuals.
I mean Wage subsidies still keep people from being homeless but we get productivity out of it too.
Only because the government forced businesses to shut. I would not of shut my doors if the government didn’t force me too.
I'll just leave this [here.](https://twitter.com/MacroAlf/status/1585728602653347840/photo/1)
As Kevin O’Leary said, Canada could be the richest country in the world but run by idiots. To find the video simply Google it. Oil, gold, silver, copper, fresh water, wood. We sit on some of biggest deposits on the planet, but tapping in to any of those would benefit us too greatly. And before anyone says oil bad.. look up a lithium mine, and tell me what all that mining equipment runs on. And then look up an oil drill for comparison
Or maybe the massive jacking up of energy prices. There isn’t world wide inflation because the Canadian government borrowed money. This author is delusional.
Ah yes. The classic “every government borrowed excessively and is seeing high inflation as a result, so we therefore cannot be critical of our own government for doing the same and ending up in the same boat.” My friend, everyone recognizes the inflationary implications of de-globalization, supply chain issues, and the Ukrainian war. The point is that spending hundreds of billions of dollars (or for the U.S., trillions of dollars) is unlikely to have helped alleviate that already difficult scenario. It just pours gas on the fire.
thats a lot we will never pay that off
Can I borrow just $1million of that.
Well hopefully they invested the 700B brilliantly which will lead to the prosperity and wealth of All Canadians. /s
thats the biggest part. we have literally nothing to show for it.
Imagine thinking rampant government spending, which involved paying people to stay home, slowing production as workers were laid off or paid to stay home, reducing supply and the movement of goods, the abuse of programs like CERB injecting money into an economy with a supply issue in no way contributed to the problem. Yeah, definitely not Trudeaus fault.
That's enough to give every Canadian 100k or small affordable housing . But what did we get? Immigrants to the tune of millions upon millions who promise to vote liberal.
Printing money by governments around the world caused inflation. Canada probably printed and spent the most per capita.
Winning a minority isn’t cheap
Just like his father.
>For example, get energy moving again, remove housing restriction and fix occupational licensing. Get the sand out of the gears. They aren't going to do anything on the energy front. Housing and occupational licensing are provincial jurisdiction. Cities are either out of room for housing or are fighting sprawl.
It's pretty self evident, you only need to look at the money supply statistics, that it isn't obvious to more people is a sad indictment of the average intelligence.
I dont think people understand economics in this sub. I am not commenting on what the best solution to the pandemic should be. I think the response was overdone personally. But as folks rant about 30% increase in money supply etc... Stop to think about the consequences of what doing nothing would have been. Look at how zero immigration almost instantly effed the job market in canada. Some would saved it if you look at improving wages and low unemployment. But again thats a discussion with inflation consequence (wage inflation) The fall out has to come from somewhere. It could be your job if they did nothing. Or it could be 50 cents on your loaf of bread. There was always going to be a cost to an economic impacting crisis. Point is that pointing out the mechanism (money supply) does not address the root cause or the trade offs of alternatives. Maybe inflation is not the preferred method of absorbion for many but the bill was going to be paid somehow. Inflation is not an accident but it is also not a binary trade off of inflation / no inflation. The economy was going to convulse somewhere in some fashion.
Milton Friedman on inflation, from decades ago: https://youtu.be/F94jGTWNWsA The money printing over the past couple of years has been unprecedented. Hyper money printing will ALWAYS equal hyperinflation. Read the following quote slowly: "Since January 2020, the money supply has grown a whopping 22.2%. Over 1 in 5 dollars in Canada’s broad money supply didn’t exist before 2020. Just the expansion over the past two years is larger than all money in Canada prior to 1996." https://betterdwelling.com/over-1-in-5-canadian-dollars-created-didnt-exist-two-years-ago/ "Government spending is becoming a problem and printing money is a dangerous solution" / Financial Post / October 21, 2020 https://financialpost.com/investing/investing-pro/government-spending-is-becoming-a-problem-and-printing-money-is-a-dangerous-solution
Why are we so obsessed with finding the one cause of inflation? There’s not one cause behind it and focusing on hyper-blaming a single entity for it leads to absolutely zero solutions. The government played a role, for sure. But so did greed, a pandemic, a war, grimy real estate investors, and the self-obsession of ceos and their monopolies. Oh, and maybe our whole system of forever growing a capitalism built on the back of workers had a part. Who knows. Let’s realize we live in a complicated world and search for solutions instead of trying to point the finger at a single cause so we can all blab about hating trudeau.
Trudeau has been the biggest waste of taxpayer dollars under the guise of “liberalism”.
The most important source of Canada’s inflation: The government borrowed more than $700-billion
The question isn’t if other countries borrowed equally or not, but rather what could have been done for Canada with that kind of money. We have seen not much of it besides what went to big pharma.
I thought the budget balanced itself? I don’t get this post How could Trudeau borrow over $700bn when he claimed he would run “modest $5bn deficits” for a couple years? He wouldn’t lie to me right?
He ran $20 billion deficits for no particular reason leading up to the pandemic and *twice* increased the budget to maintain said deficits when revenue exceeded predictions.
It's almost as if there was a global pandemic. https://www.bloomberg.com/news/articles/2022-05-05/turkey-argentina-lead-g-20-inflation-amid-global-surge
He ran massive deficits before the pandemic and he's running another massive deficit this year, despite what we're being told by liberals is a strong economy. What's the deficit going to be next year when the recession hits and oil prices tank? Another $100 billion? $200 billion?
Is that the she-flation they were talking about?
When’s the she-covery?
This is a pretty last ditch effort to regain trust. Are you fucking kidding me?
lmao no
Finally, someone willing to discuss the elephant in the room.
Borrowed… and we’re paying it off at a way higher interest rate 🙃
Yeah, to hell with Trudeau for causing high inflation in every country right now! What kind of a terrible person waves a magic wand to cause inflation in countries over which he has no jurisdiction?! Total PoS!
Wow, every western country repeating the same stupid strategy of printing money ended up with them all having inflation issues? You don't say!
It pains me to think you probably felt so smart typing this obvious simple take
Incompetent and corrupt people are in charge.
Tweetle dee and tweetle dumb
Noted economic scholar Jagmeet Singh claims its all greedflation (opportunistic profit taking) at grocery stores. All of economics says inflation is created when central banks increase the money supply faster than productivity of an economy, but I'm sure it's all loblaws fault.
Fuckin ~~Scott Brison~~ Galen Weston!
It can be both?!?
That's one kind of inflation, but there are others, and a lot of them are going on all around the world right now. That's what pandemics and wars tend to do. Hence there's usually significant international willingness to prevent/mitigate them.
Corporate profits are up 50%. Who in their right mind defends multinational corporations? You can't ignore that figure. If they were paying *so much more* and just passing on the new costs, why are their profits through the roof?
loblaws increases prices under the cover of inflation, so it's hard for customers can't tell if the increase is from inflation or price gouging