More Signs of Economic Deflation in Canada: Nova Scotia construction industry calls on government to finalize prompt payment regulation! Corporatism in Decline? – July 3, 2021
The pandemic has exposed prior problems that existed in the Canadian economy that has never been addressed because all the government had to do in years prior was borrow money, to solve economic problems. But because Leftism is a dominant force in the year 2021, most people forget that the entire reason A government borrows money is supposed to be their RETURN ON INVESTMENT.
Under Stephen Harper, there was an understanding to cut the deficit because, throughout history, pandemics have happened, and now is the time you’d go in debt or possibly tac on some regulations to keep private businesses afloat. The problem with Justin Trudeau is that he began borrowing money and growing the Canadian government during the good times, meaning that the cost of living increases are causing all sorts of problems for Canadian businesses that via Justin Trudeau’s prior borrowing and regulating saw their profit margins SLASHED.
Energy costs as an example are a huge cost to private businesses and Justin Trudeau has been hell-bent on raising the cost of energy in Canada, Trudeau as also been anti-pipeline, now, these types of high paying jobs in the energy sector, often create additional jobs, because if as an employee I’m making a good living, I may start a side business, this is how capitalism is supposed to work.
However, if the government raising the cost of living, thereby raising my tax liabilities, I as well as many others have fewer dollars to take on more risk, and when it comes to the story in Nova Scotia, what I believe is happening, is not only is there a labour shortage, but I also think some private businesses are reluctant to take on debt.
The Jagmeet Singh/Bernie Singh types want people who know nothing about business, to imagine that all business people are living like fat cats when in fact most business people are IN DEBT!
Unlike the government which can simply borrow money anytime it wants and not worry about paying it back, private businesses do have to worry about debt servicing, because when the government can’t debt service, Canadians feel the pinch of inflation as the Canadian dollar is debased, when a private business can’t service their debts, they go bankrupt.
Once bankruptcy happens with a private business, depending on how their business is structured, the financial institutions to the private business is indebted may come after their personal assets. In the Global news story below, the woman says she had to remortgage her house?
Now when Justin Trudeau spends money he doesn’t have does he have to remortgage his house? No, of course not because the Canadian private businesses are the dole for his reckless spending and bad ideas. Now, to the companies that owe money in Nova Scotia, if this law is passed, they might simply close their doors.
Accrual accounting is a major part of doing business, in my opinion, accrual accounting is the main reason why there was even a demand for an elastic money supply. But, the party that has to shrink in all of this is the government, the government is too big, the government has too many existing regulations that private businesses have to adhere to, and a lot of private businesses, do not understand that had government costs not been so expensive in the first place, they wouldn’t need to these additional regulations.
It wasn’t always the norm to go into debt to start a business, it’s become the norm because of artificially low interest rates, excessive regulations on the economy creating monopolies and of course, REGRESSIVE taxes that cause economic deflation in the economy. If it costs me more money tomorrow to buy the same things I bought yesterday, and I’m not charging more money for products or services, because the market refuses to support my business at a certain pricing point, this will lead to economic deflation.
For some businesses, they’d rather fight it out in court than pay what they owe, because remember in the private sector bankruptcy is always an option, that can be used strategically. This again is why the government should stay out of the private sector, but when things start going wrong they can go very wrong very quickly.
Interesting times ahead