Some Politician’s Genuinely Believe Inflation Is Transitory: The CAQ government has pledged to make a one-time $500 cheque per adult with a net income of $100,000 or less ($3.2 billion in payouts to roughly 6.4 million Quebecers) – March 25, 2022,
One of the main problems with “Transfer Payments” is that it rewards bad economic decisions. One of the main reasons Quebec has a deficit is due to its denial of pipelines. Quebec hasn’t been a friend to Western Canada, nor does it feel like it needs to be. To put this in its proper perspective the current Premier of Quebec François Legault is actually the Conservative Premier of Quebec.
That’s something you should think about when you imagine that he plans to stimulate the Quebec economy by sending Quebecers $500. With that said, I have to point out that, that social activist and other politicians in Quebec feel like that’s not enough
Saray Ortiz Torres, a community organizer with the housing and anti-poverty advocacy group Project Genesis, said the $500 cheques will be a big help for those with lower means because it will help defray rising rents and food costs. However, it is a one-time payout that does nothing to help the systemic problems that cause poverty and the lack of affordable housing.
What many in Quebec are looking for is some sort of Universal Basic Income. It’s difficult for me to know the actual deficit in Quebec, the articles I read throw out all sorts of numbers, some claim the Quebec deficit is $3 billion others say $6+ Billion another says $7+ billion. I’m not sure, I can’t keep up with it, what I do know is that Quebec has been in debt for a long time and what this equates to is more money going to service the debt and fewer dollars being spent on what the tax dollars were intended for.
You to have to remember that a perpetual deficit revolves around a government making bad bets in the past. The idea of social spending is that governments imagine social spending will stimulate the economy, perpetual deficits are a clear sign this isn’t true. Furthermore, the longer deficits linger on, the more people depend on them, leading to unforeseen problems if inflation isn’t transitory.
The province sees a C$7.4 billion deficit in 2021-22, compared with the C$6.8 billion projected in November due to higher spending.
The problem with transfer payments is that badly run provinces in Canada are rewarded for incompetence. the article I point to below is the real problem with how news is reported in Canada.
The Finance Department is projecting the deficit this year to hit $144.5 billion, one year after a shortfall of $327.7 billion. The deficit for the next fiscal year, starting in April, is projected to hit $58.4 billion, not including any new spending promises in the budget.
“Not including any new spending promises in the budget.” So yeah, sure we’re going to pay back the debt, but we may need to spend more than borrowed prior in the future. Many in Canada are banking on Consumer price inflation being transitory,e if it’s not, and inflation rages on Canada could see a wave in bankruptcies. There are a few reasons why the Premier of Quebec François Legault feels the need to send Quebecers earning less than $100,000 a $500 cheque, I’ll mention 2 one is that he’s obviously looking to buy votes and the other reason is that a wave of bankruptcies could be on the horizon.
When I look at inflation and debt levels, my mind wanders into bankruptcies. Canada already went bankrupt, that’s what CERB and debt deferrals were all about. Canada defaulted on its debt, now, magically provinces and the federal government has a surplus? Well, if this is how it works, why don’t we keep doing it? Send people free money and pay down the debt?
What’s that you say? it will lead to more consumer price inflation? and it’s clearly not sustainable? If that’s your argument then didn’t we simply delay the inevitable? If I’m in debt and I pay down SOME of my debt, maybe a little more than I expected, but after I pay down my debt I have no money, and now my money is worth-less than it was a year prior, does that not mean I am poorer now than I was a year earlier?
Maybe I’m missing something here? Because the way the government is framing this is that all levels of government have made some sort of achievement. But already, Premier of Quebec François Legault is making spending plans? Justin Trudeau and Jagmeet Singh have agreed on a deal that includes more spending.
Libs, NDP reach confidence-and-supply deal in seven policy areas | ipolitics.ca
The deal will last until June 2025.
Whether it’s provincial or federal deficit spending, there appears to be no paying down of the debt, I’ve only heard about government revenues going up. What I’m getting at is I see a recession coming, but on that note, sometimes it’s better to just allow things to play themselves out, maybe I can learn something new!
Interesting times ahead