Because of Justin Trudeau’s Current Economic Policies, Racialized groups in Canada will ‘lose’ in the post-COVID-19-pandemic economy – June 2, 2020,
Currently, the world is floating on a fiat-based monetary system, never before in history have governments been this lucky, the problem the Leftists have created with the fiat-based monetary system is growing the size of government, which is the real job killer, in this era of abundance.
Because of Donald Trump, the price of oil is very cheap for Canadians, which oddly enough allows Canadians not to feel the pain of Justin Trudeau’s carbon tax.
Both Justin Trudeau and Donald Trump and to be fair a lot of other world leaders have been spending and borrowing money like crazy, in fiat monetary system, the market, the lenders will all accept massive borrowing as long as the Governments have the right economic policies in place to pay back the debt with productivity.
Whether you like him or hat, whether think he’s choosing politics over human life, Donald Trump’s current economic policies allow investors to feel safe enough to prop up U.S asset prices, which of course give the U.S economy the ability at least on the surface to get their economy rolling again.
In Canada, Justin Trudeau’s policies namely the Carbon tax, his war on Canada’s energy sectors, and his growth of the government, which also includes additional regulation burdens he’s placed on Canadian businesses, would have hurt the Canadian economy if Coronvirus never happened.
The problem is if there’s ever a global economic restart, Canada under the Trudeau cabinet, will have economic problems it will need to address for Canada’s most vulnerable economic groups. Although at this point minimum wages is the last of anyone’s concern, the provincial minimum wages are a wage control instrument which doesn’t allow businesses to get creative with how they pay their employees and adding higher energy costs via the Carbon Tax, which is a regressive tax consumers have to pay for, equates to businesses which provide essential services being the main beneficiaries after the pandemic ends.
This lack of demand in particular areas of the economy will lead to deflation, which in economy of big government, will lead to a lot of business bankruptcies because again, the Canada Mortgage and Housing Corporation(CMHC) also props up prices in commercial real estate and the problem with a very big government is paying for this big government is extremely hard during a period of domestic deflation.
Regardless of what backs the money supply, the problem for most countries is usually the size of government, and how much effect the government has over people’s ability to be productive. People forget what caused Hyperinflation in the Weimar Republic(Germany), it was their governments’ inability to pay for war reparations.
The cash flow of the country was out of whack, now in their era, fiat money hadn’t arrived yet, however in this era, fiat money is accepted worldwide and the market allow this primarily because of property rights and a governments ability to pay down debt without exclusively printing money.
So in China, because people can’t and usually don’t want to buy property in Communist Party, it’s unlikely that no matter how good of economic policies China has, people aren’t going to want to invest too heavily in Chinese treasuries.
But in countries like Canada and the United States, even if our countries were to default and suffer a lower credit rating all that would mean really is higher interest rates, but let’s say Canada doesn’t default? and the Canadian dollar maintains it’s valued globally, what does that mean domestically? Well to answer that question, one only needs to look at Japan and in Japan, they have what is called a Zombie economy. In a political economy, a country with a zombie economy requires constant bailouts in order to operate.
Now, why Japan has been able to survive their zombie economy is that the Japanese are savers, the Japanese also have a pay as go pension plan, which some argue has led to a decline in their population. New workers pay for the retired and the problem in Japan is getting so bad that a government official once told Japan’s elderly to hurry up and die!
Canada has a better immigration system than Japan does, the problem is Canada also has a giant welfare state that continues to grow larger as we invite more immigrants to move here. If you invite immigrants to move to Canada and they don’t work, mostly because of government regulations it puts a strain on the economy and during a period like this in which a lot of Canadians are being paid no to be productive, the people who will suffer the most well be the Racialized groups in Canada.
Interesting times ahead!