Transfer Payments Lower Growth- Art Laffer, Why The Canadian Dollar is losing its purchasing power – August 24, 2021,

Most countries in the world have transfer payments schemes, one of the reasons America’s economic decline has occurred at a slower rate than other countries is that transfer payments in America are often met with resistance. Transfer payments are a tax on productivity, meaning the harder you work, the more you’ll be taxed.

If you’ve ever worked in a Unionized work environment, you’ll quickly learn that a large percentage of the unionized workforce doesn’t want to do any overtime, why? To avoid getting taxed at a higher percentage, well the same is true in the business world when employers are taxed for being productive then those employers will discover ways to be less productive in the country that is taxing them, often this means that jobs Canadians could and should be doing are outsourced to other countries.

Although the Forex markets are rewarding the Canadian dollar, domestically the Canadian dollar is losing its purchasing power, meaning that the Canadian dollar has more purchasing power outside of Canada, the end result of this hyperinflation, which is economic DEFLATION. Inflation is a phenomenon created by the government, as an example, if the Canadian dollar was backed by gold, it’s unlikely that the Canadian dollar could hyperinflate.

Because the Canadian dollar is a fiat dollar backed by nothing but confidence, price discovery is based on what the market believes the Canadian dollar to be and the more value the forex markets put on the Canadian dollar, the more incentive there is for the Canadian government to spend, which in the context of transfer payments in Canada equates to more people being rewarded in Canadian dollars for being less productive.

Now, that it appears that America is headed for PRICE inflation, the economic deflationary results will eventually hit Canada as our economy is extremely reliant on the U.S consumer. If you’ve ever wondered why Canada per capita doesn’t have as many entrepreneurs as America, it’s because of transfer payments. It’s heartbreaking for entrepreneurs in Western Canada as an example to watch as Quebec and eastern Canadian Leftists laugh and steal from them for being productive, this doesn’t exist in America YET!

 

Biden’s economic policies ‘far more destructive’ than Obama’s | YouTube
| Reagan economic adviser Art Laffer refutes Psaki’s claim more spending will fix inflation.

Interesting times ahead!