Liberal Party of Canada to provide $2,000 per month for 4 months to workers whose income drops to zero because of COVID-19 – March 25, 2020,
The Liberal Party of Canada is going to apparently give away $2000 per month to workers affected by COVID-19. My guess is this money should be used as a stimulative effect to the Canadian economy, unfortunately, a large segment of the Canadian population is in debt, so this is one of those you’re damned if you do, you’re damned if you don’t scenarios.
Because if this stimulative effect goes to paying down debts, they’ll lose productivity which is how HARD money is created and if the money goes into the economy, well, currently only handful stores are legally allowed to open in Canada, so the small businesses who are suffering aren’t going to get much if any stimulation. If as an example every Canadian worker got $8000 this equates to about one hundred and forty-four billion dollars.
$8000 x 18, 000,000(Working class Canadians) = $144,000,000,000
I worked in Sheet metal most of my life, and some of the characters I met, loved nothing more than to get paid not to work. So if they knew they’d get $8000 not to work, many would opt not to work. Hopefully, things have changed in Canada now!
Now, obviously I’m exaggerating the numbers I hope, but this could trigger a lot of inflation as this money might not be spent on productivity in the economy. If you ever wonder why big and small businesses usually get the bailouts it’s because they’re usually more resourceful. I’m not saying bailing out anyone is a good idea, but when you give money to people aren’t productive, or if you inflate the ages of people’s production, you create unforeseen problems in the future as money often gets thrown in unproductive areas of the economy.
As an example, all of sudden toilet paper factories are ramping up production, because there was a belief that there would be a toilet paper shortage? Canada still manufactures toilet paper, we’re not at Venezuelan levels yet… But because the average person doesn’t comprehend the importance of being productive and manufacturing things in Canada, the assumption by most Canadians is that we don’t make things in Canada anymore.
Well, the truth is Canada has been losing manufacturing jobs and those manufacturing jobs were a huge chunk of Canada’s wealth. In a service sector economy, in which you’re reliant on IMPORTS, you become heavily reliant on your currency and your business environment, which is determined by the Government, I don’t know if printing money and running up the Federal deficit is going to be good for the Canadian dollar in the long term, I also don’t think April 1st is a good time to ratchet up the carbon tax!
Interesting times ahead!
