Joseph Facal, a newspaper columnist in Québec, recently wrote an excellent article on what we can expect from the Canadian and global economies. The picture he paints isn’t pretty.
Mr. Facal reminds his readers of the 2008 economic crisis and that it was the worst since the 1930s. He primarily blames US banks and their feeble balance sheets on account of having granted way too many bogus loans and mortgages.
With the world being the interconnected place that it is, it was only a matter of time before the virus spread around the globe.
According to Mr. Facal, the accumulated debt of households, governments and non-financial companies at the start of the 2008 crisis amounted to 215 percent of global GDP. Today, he alerts, it is at 250 percent, or even as high as 280 percent for rich countries.
In Canada, he explains, the debt level today holds where it was in the United States just before the crisis exploded. And in case you doubt his explanations, Mr. Facal refers to a recent survey that shows that many people don’t even have $500 left over to deal with any unexpected emergencies.
In fact, as he points out, Canada is currently the most indebted G7 country – a trend that will be exacerbated dramatically by the Trudeau government’s stated intention to bring the federal deficit to well over $100 billion by the time the writ is dropped and Canadians head to the polls again in 2019.
Mr. Facal expects a considerable slowdown in the global economy. Only this time, however, unlike back in 2008, governments won’t have the necessary leeway to stimulate their countries back to health. Even China, with debt equivalent to 255 percent of its GDP, will not be the little engine that could either.
Leaving Mr. Facal aside now, you may have wondered, as several economists have done in recent years, why it is that the economy has not really recovered anywhere since the end of the 2008 crisis. Growth has been sluggish, and people are becoming more and more concerned, not to mention stressed, about their financial wellbeing. For in the past, whenever a crisis or recession ended, it was customary to see exponential growth in subsequent years. But not this time.
The answer to this conundrum is simple. Governments around the world have spent time, efforts and resources mostly on all the wrong things and measures. What is more, in some cases they have devised monstrous plans to suck even more of the hard-earned money out of people’s pockets, particularly those who can least afford it.
Take Canadian Prime Minister Justin Trudeau’s enhanced Canada Pension Plan (CPP) initiative as an example. At the behest of Ontario premier Kathleen Wynne, Mr. Trudeau caved in and adopted this ridiculous plan – to help people save for retirement. Where his and Ms. Wynne’s calculations fail is that the people who have not saved enough are the ones who do not have the extra cash to do so – because their federal and provincial governments have already robbed them of close to 50 percent of their income, and after paying the taxman as well as for food, shelter and clothing, there is nothing left but crumbs, if that.
Remember the time-honoured saying, “When government shows up at your door and says, ‘I’m from the government and I’m here to help you’, run, run, run like hell in the opposite direction”. Well, thanks to the two geniuses in Toronto and Ottawa, respectively, those people will now be aided in the form of a further tax, that is, increased CPP contributions, and it is probably not far-fetched to assume that many people will have to load up on even more debt to pay all their bills. (And jobs will be killed too, because businesses will not put up with having to pay even higher employer’s CPP contributions.)
Then there is “man-made global warming”, you know, the lie created by the extreme left as a means to introduce communism and worse through the back door and to destroy Western civilization as we know it. In the name of stopping or slowing down “global warming”, governments have spent billions and billions of dollars. In the process, they have destroyed jobs and ensured that there will be no substantial economic growth. The Ontario Liberals, for example, have been particularly committed to such programs and spending, with the result that Ontario, once Canada’s powerhouse, is now in a worse state than Greece.
This “carbon is bad” lie is the main reason why people are falling further and further behind. Alberta, where people have been in dire need of work, and where suicide rates have seen a meteoric rise, just lost tons of potential jobs and a good $800 million – because the American company behind the investment had major concerns about the climate of uncertainty and the “global warming” policies of the Alberta government.
Thus, as Philip Cross of the Macdonald-Laurier Institute, puts it:
The mounting cost of policies to fight global warming has helped keep the western world mired in slow income growth for eight years after the Great Financial Crisis. The longer the average person sees no prospect of income growth and jobs for himself and his children, the more likely he will be tempted to vote for populist leaders such as Donald Trump, who promise much different choices in the trade-off between restoring income growth and battling climate change than our liberal elites have been making. At least the average person and populist leaders know there is a trade- off between the economy and the cost of energy. Proponents who pretend that more expensive energy policies don’t harm incomes simply demonstrate that they fail to understand the basics of economic growth.
There is your culprit right there: governments peddling a lie as a pretext for taxing individuals and businesses to death.