Some Members of Canadian Media Still Assumes Inflation Is Transitory: Liberals may find extra spending room in budget created by rising oil prices – March 20, 2022,
When the government is running a deficit, inflation picks up and the government finds itself with a surplus in revenue, now would be a good time to pay off the debt, not run more deficits. Why? Because if Canadians are having to spend more money to purchase fewer goods and services, there’s a chance there will be a change in consumer behavior.
Now, one of the reasons I assume the writer wrote the article I point to below, is because they’re probably confusing public sector pay increases with private sector pay increases. If the private sector raises prices on consumers, they’re forced to do so responsibly, when the public sector raises the WAGES so do so with political aspirations.
With the uptick in consumer prices, there is obviously going to be an uptick in wages from the private sector, but when the private sector is forced to raise wages, via new economic conditions created by the Federal Government, via their regulatory policies, those wage-price INCREASES are passed onto the consumer, whether it’s Shrinkflation, or certain business opting to exit the marketplace altogether, the quality of life for most people comes down as consumer price inflation rages on
In economics, shrinkflation, also known as the grocery shrink ray or package downsizing, is the process of items shrinking in size or quantity, or even sometimes reformulating or reducing quality, while their prices remain the same or increase. The word is a portmanteau of the words shrink and inflation.
Now, I’m not sure if this is utter ignorance on the part of the writer of the article I point to below, but higher prices hurt the working class the most, especially if higher prices aren’t TRANSITORY. If the consumer price inflation we’re experiencing isn’t transitory it will equate to low-wage workers not being able to keep pace with inflation.
The consumer price inflation culprit and beneficiary of the consumer price inflation is the government, especially a government that’s openly at war with fossil fuels. So when the writer below says that “Liberals may find extra spending room in the budget created by rising oil prices” he/she should know how elitists this article sounds.
Why didn’t the writer say now would be a good time to pay down the debt? Sure it was only a quarter-point interest rate hike, but debt servicing costs are rising and could continue to rise if inflation isn’t transitory. The Federal government is running RECORD deficits, we’re not even talking about a solvent government, there are still debt servicing costs, and this surplus revenue to come as the result of Trudeau’s spending sprees yielding positive results, this surplus cam because of oil price revenues skyrocketing.
Higher oil prices equate to higher taxes, especially with the added carbon tax. But are we just going to ignore, that Canadians want to get out of debt, and consumer price inflation equates to more Canadians finding it harder to get out of debt? Furthermore, higher consumer prices could equate to more Canadians finding themselves in debt.
I’ve been saying for months now, that I think a wave of bankruptcies could be headed to Canada, the Canadian housing market already crashed, Trudeau, bailed out the housing market when Covid first happened, so a lot of the rising costs, Canadians were able to ignore, they can’t not anymore, the cost of going to work is rising and we’re headed for unchartered territory, so while some Canadian writers feel that the Federal government is entitled to run record deficits into infinity, the middle class and poor may see their quality of life drop to unexpected levels.
Because I remind the reader that the average employed Canadian can’t walk into a private bank and convince the private bank to buy up their record debts at the lowest interest rates imaginable. No, Canadians in debt IF THEY QUALIFY have to pay retail prices for the debts they accumulate at financial institutions.
This is why now would be a good time to pay down the debt, hopefully, get Canada in a surplus position, and don’t tell me it’s not possible because there are nations in the world that don’t run deficits.
Interesting times ahead!