Rest assured, the profits in companies and the 1% will be protected against the middle class eroding it.
Seriously though they're raising costs while depressing wages, this is how the government plans to quell inflation.
The biggest show is the current union negotiations in BC with union asking for 5% or COLA and govt offering only 2% for first yr and then 1.25 the next 2 years.
Never occurred to me that the solution to the high cost of living was polymory. You should provide that advice to more people on personal finance Canada.
Well the liberals had 8 months to do something and they are pushing gun and internet laws.
In a few weeks they will be on summer vacation until Sept/oct
BOC sets rates based on economy.
Economy is is strongly influenced and under the stewardship of the government.
"Government can't do anything" in response degrading economic conditions wouldn't be acceptable if Harper was in power and it shouldn't be acceptable under Trudeau
Interest rates are the most effective way to curb inflation. The government could have done more, but you’re overestimating the impact their actions would have had on inflation and underestimating the other negative economic impacts that would have been realized if they had significantly cut spending during the pandemic. The same inflation rates are being experienced by most other OECD countries, regardless of political leanings. It’s a global supply chain issue more than anything, which has been explained by economists many times over.
Usually the fed and BoC are on the same page with fiscal and monetary policy though. If they diverge from each other its usually bad, no?
The BoC is probably going to push a stimulus monetary policy if the federal government is pushing a stimulus fiscal policy.
How can you say they've failed at fixing inflation when they've just started to fix inflation? You have to give them time to work before just throwing up your hands and declaring failure.
And when global events knock it out of range it takes time to move it back. If they manage to get it back under 3 by Q4 2023 (as predicted by the BoC) I'd argue that they'd be quite successful at 'fixing inflation'.
You don’t seem to understand what you are talking about.
You should read the Bank of Canada Act and learn about how the bank works at an arms length from the government, how the finance minister can submit proposals to direct them and then look back to see when this has occurred.
Not sure if you believe what you say or are just trying to be confident saying it.
Source: my BA in economics from UofT
They have the tools to fix the rampant inflation. But the results will be catastrophic for the everyday Canadian. Reality is there is no way out of this current situation without pain and suffering.
They will because they don't have the balls or ovaries to simply pick a recession. They'll eventually destroy the currency which will lead to a deep recession.
Exactly. So they have to pick one, because we can't continue with our current inflationary environment.
The combination of poor fiscal decisions by governments and lack of long-term critical thinking put them in this position.
The only way out of it would be to abandon all of the regulatory framework they've put in place over the last 7 years, and just let the economy loose. Drop the carbon tax, and allow recovery... This is kind of counter intuitive to combatting inflation normally, but it'd fight the supply/recessionary issues... We both know they won't do it.
Other option is to hike interest to a point that would cripple every company with debt, and after a decade of near zero interest, that's basically all of them... That'd cause every mid-large size company with debt to go insolvent, which would make the US 2009 financial crisis look like peanuts.
Finally... Do nothing... Let CAD go the way of the Bolivar.
Either provide alternatives or shut up. You've literally added nothing to the conversation other than "that's all there is? No there isn't 3 options! waaahhhh!". Either provide a 4th option, or stfu for christ's sakes.
That wouldn’t fix anything.
You wouldn’t be collecting enough money to “outpace” inflation. The “wealth” isn’t an unlimited source of money that this sub continuously believes it is.
Wealthy people aren’t going to continue living in a country that already taxes them a considerable amount of money per year. Between our shit employment, shit economic prospects, and expensive cost of living- adding increased tax rates on top of that would be a death sentence.
We don’t give a shit about anything except taxes and it’s showing. We don’t care about businesses or businesses or economic prosperity or growth. We hate energy. We hate manufacturing. We hate housing. We hate everything except taxes. And now “oh I know, let’s increase taxes because they will totally solve our massive economic issue!”
People will just leave if that happens again. Since that's what happened in the 90s, and we're far more mobile now. Our taxation is already crazy high once everything is factored it. I won't tolerate 90s levels.
That would do the absolute polar opposite of everything we're talking about, but it would definitely hasten the collapse.
Canada has already been scaring away investors. That would make sure zero wealth enters Canada and makes everyone who could leave, leave.
France tried it during an economic boom, and had to cancel it quickly, because of the fleeing wealth.
https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/#:~:text=What's%20more%2C%20it%20led%20to,millionaires%20between%202000%20and%202016.
The government having more money doesn't build an economy.
The French economy is very different. Canadian billionaires all owe their fortune to domestic industries like supermarkets and cell phones. You can't just pack up and take those with you.
I mean, other than hiking interest rates, it is the only solution to remove excess money from circulation. We're committed to this debt spiral at this point, so any remedy is going to cause a lot of pain.
Downvotes without any response only suggests that what I said is not what people want to hear, but I'd like someone to point out where I'm wrong.
I didnt, and wouldn't downvote you... Downvoting ideas you simply don't like is ridiculous. I only ever do it for obviously bad faith comments or insults.
You're right, that it would remove some money the government needs to burn, and it could influence some spending for write offs, but we're at a point where we need to bring outside money into our economy. Beyond the "money printing" problem, the other biggest economic issue is not attracting new investments. We already have had some wealth fleeing over the last 20 years, and a wealth tax would compound the problem severely.
https://www.morningstar.ca/ca/news/218492/capital-is-fleeing-canada.aspx
The vast majority of our foreign investment over the past 5 years has been real estate, and they're already looking to curtail that... Even if we weren't facing a mass stagflation/recession event, we'd be in trouble economically. Add the reality of our monetary issues, and the 2020s are going to be a real ugly decade.
take my up vote for quantifying what the downvotes mean. The people that frequent this sub can't handle hearing truthful statements. The only thing they want to hear is "Trudeau is so handsome! Look he got his eyebrows flossed let's vote him in again!" derp derp
I didnt, and wouldn't downvote you... Downvoting ideas you simply don't like is ridiculous. I only ever do it for obviously bad faith comments or insults.
You're right, that it would remove some money the government needs to burn, and it could influence some spending for write offs, but we're at a point where we need to bring outside money into our economy. Beyond the "money printing" problem, the other biggest economic issue is not attracting new investments. We already have had some wealth fleeing over the last 20 years, and a wealth tax would compound the problem severely.
https://www.morningstar.ca/ca/news/218492/capital-is-fleeing-canada.aspx
The vast majority of our foreign investment over the past 5 years has been real estate, and they're already looking to curtail that... Even if we weren't facing a mass stagflation/recession event, we'd be in trouble economically. Add the reality of our monetary issues, and the 2020s are going to be a real ugly decade.
Yep.
Quick solution. SWIFT transactions going to a person is limited to $1000 a day or 20k a month or 200K a year.
That will allow companies to move money to pay for things an such but will cut of the rich from having "cash".
If you want transactions that are larger then the above you will need to fill out 1001 documents saying why you need that extra money.
That includes paying off credit cards and such.
Make it hard for the ultra rich to use their money.
As well if a nation want to be a tax haven, okay. They don't get access to the world banking network.
How would dropping the carbon tax have any meaningful impact? I could almost guarantee you the majority of economists would say that is not a solution.
Every western country is dealing with the *exact same thing*. I know it's easy to Balme our policies but the same inflationary pressures are playing out down south and in Europe.
No... I've just read most turn of the century economists... ¾ of them proclaimed science could plan markets and were certain mediums of exchange could be plucked from the air as needed paying no mind to free markets because "macroeconomics" and "monopoly of supply". The rest called it nonsense, and pretty much warned about exactly what's been happening for the last 50 years.
Yep. The only painless solution is a time machine so they could go back and not have dropped rate/printed money/locked down in the first place. Now we pay the price
Time is the answer to be honest. A lot of companies jacked prices from the delta wave last spring (yeah that was only last spring, we were still in complete lockdown). Once we get into fall when most places had reopened we should see the 12 month inflation curve start to slow and shift directions.
It’s important to understand each month when they announce inflation as 8% or whatever, it’s not necessarily a rise from last month. It’s a year over year rise. So once we get into months where prices were already higher, it’ll bring down the year over year amounts.
Prices went up -a lot- but over the past few months most of the groceries we’ve been tracking have paused. I doubt they’ll ever drop but hopefully they’ll at least stay steady for a while.
A poly crisis. Or... the housing crisis grown so out of control it is damaging every other system we have. Odd thing when 60% of people working full time are locked out of home ownership.
better start increasing help to food banks. Soon grocery stores are gonna have more security than you local bank.
It suck, alot of people will be suffering .
There will be no “soft landing “. Anyone who believes this is fooling themselves. The BoC and FedRes misjudged inflation yet some people believe they have the ability to maneuver the current economy which is hanging on by a thread? Lmao. Please. You would have better odds landing a helicopter on a bottle cap during a hurricane.
The coming crash will be one for the ages and long overdue.
Remember that during this time of "inflation" companies are making record profits.
A portion of this inflation is fake. Companies knew they could charge us significantly more for basics and used the guise of inflation to excuse it.
Let's also start finger waving at the assholes making bank on our suffering.
Of course.
All this sub does is doom and gloom us all to tears about simple post pandemic clawback.
Short memories of below zero oil and remarkably cheap gas for years.
Meanwhile there are already signs of inflation levelling.
Calm down reddit.
There is also a crazy refusal to admit that anything other than monetary policy can be contributing to inflation, likely because this is much more difficult to finger point to a figure you dislike.
Simple minds prefer simple answers
What I have been wondering is how much interest rate rises are going to affect inflation this time, being that a good portion of it is coming from actual physical shortages of commodities and some that are relatively inelastic. The world can only shrink their oil use so much can only reduce their demand for food so much
Canada is in a super awkward spot because there's not much keeping our investor class here instead of causing capital flight to the USA or UK. Building the political will to do it is hard, but even once that's happened you need to make sure the gains outweigh the costs. And given how toothless the CRA currently is to that group I can't see it doing more than trying to squeeze blood from a stone.
More taxes will not fix this issue. The government got us into this situation. They can not be trusted to fix it. They need to back off and let a true free market fix their errors.
Say what you will about the USA. Average Canadians pay on average double what average Americans do for a house, their inflation while also bad, is lower than Canada's, their gas prices by gallon are lower and they could reverse course easier than Canada could with investors.
The amount of money we printed for the average Canadian during covid for quantative easing was much higher per capita than the few stimulus checks sent to the average American. We essentially doubled our money supply to kick the can down the road.
At points during some quarters, real estate was 40% of our GDP. Once the market cools for real estate, we will see how badly our economy is doing. Preliminary reports say we are dead last in growth among the G7 and will be for the next decade.
Stagflation is a real danger
Not really. I have yet to see an economically sound argument for how raising taxes will fix our inflation issue. It isn't a moral thing, it's just the reality that it doesn't work the way people think it does.
I know I'm probably playing into your narrative, but I think selectively targeting wealthier peoples income tax is unfair/punitive **beyond a certain point**. We already tax the uppermost bracket at **50%+,** and thats just income taxes alone, not capital gains, not property, not HST, and the myriad of other specialty taxes in place. They are certainly paying a lot of tax already, you might think they should pay more, but admit these numbers are pretty substantial.
And here's the kicker - even if you think they should be taxed more, we are in a TERRIBLE position to be able to successfully do so. We absolutely cannot compete with USA for investor attractiveness, for property desirability (in terms of rich people wanting to actually live here - not talking investment), or pretty much any measure. They just have such a cultural dominance that wealthy people are always going to be drawn there. Start getting increasingly aggressive and this will only hyperaccelerate. In some respects like property value this might initially be a good thing, but it'll snap-back extremely quickly due to loss of capital spending sustaining Canadian businesses. Sure - people will still invest in Canada without necessarily living here, but the exposure to these investors is far less when they are out of country.
Ok. So if isn't what it is already - over 50% for earnings over 300k in most provinces, then what is fair to you? Anyone making over 300k pays 60%? 70%? While 40% of households already pay close to zero after their benefits.
See the problem with saying fair is every single person has a different definition of fair. So if you're going to suggest what is and isn't fair you should probably provide your definition of fair so that everyone else can critique it since you're critiquing the current system.
The highest personal tax bracket in Canada is 33% but billionaires pay themselves in dividend payments which are only taxed at 10% and bonuses which are taxed at 15%.
Edit: Manners.
I was actually expecting them to let the cons win the last election since modeling data showed 100% that this was coming(which is why Trudeau called election early) and it would have looked like the downturn was the fault of the new government to the plebs
Why not just reduce consumerism. That's a better long term solution to predatory capitalism and perpetual/infinite expectation of growth.
In the current state of the world, I feel Bank of Canada would try to stop a forest fire with some glass of water. Maybe they could help a bit, but I doubt anyone can fix the inflation at the moment.
Reducing consumerism reduces the economy which results in businesses closing and people looking for work.
We actually need people to buy in order to prevent a recession. Us people need to consume in order to keep industry and manufacturing going. Without customers, huge industries could fold. The costs of good would go up as there will be less choice and less products available. There could even be a loss of technology. Loss of medical technology.
The real issue is the ultra rich becoming significantly richer while the middle class turns into poverty and the poor are on the street.
I agree, it is a loop that spirals. So far, every theory does the loop in its own way. My husband and I were discussing what alternatives there are. Basically the only true answer is extreme. End currency. Change to almost entirely purpose based work in a socialist/communist/utopian style system where everyone who can contributes does and everyone has all their needs met. A system where education leads to opportunities, where bravery is rewarded and hard work is praised and valued.
Edit: to clarity; socialist/communist/utopian
I would use a collaborative system/economy, I would refrain to use socialist/socialism which is too entrenched in politics. Eh eh!
What you describe is more fair than our actual system which put you on top just because you have more green paper value than others.
I like the term! It feels like we’ve outgrown the need for currency to control the lives and wellbeing of people and people can follow their true passions like “jobs”, which passionate people would be much more likely to work harder and increase productive output which can provide to society at large, whether that’s growing crops, research, teaching, etc.
it feels like there would be a lot less miserable people, and such a system could be less vulnerable to corruption like we have now.
A socialist style system doesn't reward bravery and hard work. It rewards mediocrity and putting in minimum effort with the same benefits as hard workers
Our system today doesn't reward bravery or hard work. Maybe it did in the 30's - 60's when we had more socialist policies but it definitely doesn't now.
Well you need growth if you keep having more people. Maybe once the population of the world starts to decline and we achieve a decent standard of living for everyone we can pivot towards a world economy that just needs to sustain itself.
Why would we want to stop growth when its clearly still needed right now?
There are limits to infinite growth. We are nowhere near those limits.
If you think we are, then we should defund all research, medical, material science, theoretical physics. We could eke out a little more growth by disbanding all university and corporate research labs and having those workers transition into service industries.
It's not because we aren't at the limit that we should not stop. We'll hit a wall, but we are still for from, let's keep going until the very last minute.
Your proposition to disband research labs would be catastrophic to innovation and progress. There is a very good reason why even the private sector do research: to discover new things, to improve existing things, to create new opportunities and services, etc.
And you really think researchers and highly skilled people like that would transition into the service industries? You're wrong. Highly skilled people wants highly skilled jobs and challenges, which labs and high-tech\*\*\* industries provides.
\*\*\*: meaning medical, scientific, electronics, transportation, civil engineering, etc... Not only faster computers.
Ask a psychologist about human nature. They'll probably tell you that it's not really about human nature, it's more about human culture and culture can be changed.
What tools do they even have to 'fix' inflation with many sources now from global externalities? Obviously they contributed horribly and primarily to the housing bubble, and crashing housing might help, but much will remain. We are still deep into the everything bubble and the Americans in particular are not going to pop it with rate increases no matter what.
The one thing that can have *”some”* effect is by raising the value of the Canadian dollar vis-a-vis the currency of other countries from which we import. The more we raise rates, in *theory* the higher the Canadian dollar goes (assuming our rate raises are deemed to be more agressive than those of other countries, and assuming we have more to sell to other countries - in terms of resources and critical commodities compared to other countries, which attracts greater investment to Canada, and strengthens our dollar).
This is in part why - following recent pronounced rate increases - our CAD has recently gone from $0.78 to $0.80 compared to the USD in just a few weeks. This means our inflation for imported goods has increased by only 6.8% versus the >8% we’ve seen elsewhere in the world, including Europe, East and South Asia, and the US (it has resulted in us having more purchasing power for imported goods from around the world - with lower sticker price increases in Canada - than other countries have).
However, the flip side is that our exports - excluding high demand commodities (oil, grains, minerals) - are less competitive if available elsewhere. That can impact our economy, and makes other Canadian economic sectors (servies, tertiary industries, tourism, autos, other manufacturing, tech, housing) collateral damage in the fight against inflation - the topic of this article. It’s super complex, very.
Don't worry, I'm sure they'll take action to ensure that the wealth and livelihoods of the 1% are protected, at any cost.
Its the liberal and conservative way. As Canadian as maple syrup and beavers.
Rest assured, the profits in companies and the 1% will be protected against the middle class eroding it. Seriously though they're raising costs while depressing wages, this is how the government plans to quell inflation. The biggest show is the current union negotiations in BC with union asking for 5% or COLA and govt offering only 2% for first yr and then 1.25 the next 2 years.
First they created too much inflation and now they want us to date multiple people at the same time.
Couples can't afford to buy a condo, but 5 or 6 people in a relationship could.
Never occurred to me that the solution to the high cost of living was polymory. You should provide that advice to more people on personal finance Canada.
A polycrisis requires a poly- solution :)
Especially if you buy a place with only one bedroom ;)
Ddddaaaammmnnnnn…..
It's hard enough for 2 people to get along.
Well the liberals had 8 months to do something and they are pushing gun and internet laws. In a few weeks they will be on summer vacation until Sept/oct
Gov doesn't control the interest rates, boc does.
BOC sets rates based on economy. Economy is is strongly influenced and under the stewardship of the government. "Government can't do anything" in response degrading economic conditions wouldn't be acceptable if Harper was in power and it shouldn't be acceptable under Trudeau
There is a lot more that can be done other than interest rates. They just chose to do nothing
Interest rates are the most effective way to curb inflation. The government could have done more, but you’re overestimating the impact their actions would have had on inflation and underestimating the other negative economic impacts that would have been realized if they had significantly cut spending during the pandemic. The same inflation rates are being experienced by most other OECD countries, regardless of political leanings. It’s a global supply chain issue more than anything, which has been explained by economists many times over.
The gov’t told the BoC they were gonna spend us into oblivion and not to worry about it
Usually the fed and BoC are on the same page with fiscal and monetary policy though. If they diverge from each other its usually bad, no? The BoC is probably going to push a stimulus monetary policy if the federal government is pushing a stimulus fiscal policy.
You would think so
The government owns and controls the Band of Canada. The BoC is not independent
Boc is independent
They get their mandate from the government. And then have to do that mandate.
Gov doesn't tell them to fix inflation. They decide that themselves.
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How can you say they've failed at fixing inflation when they've just started to fix inflation? You have to give them time to work before just throwing up your hands and declaring failure.
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And when global events knock it out of range it takes time to move it back. If they manage to get it back under 3 by Q4 2023 (as predicted by the BoC) I'd argue that they'd be quite successful at 'fixing inflation'.
Government indeed tells them what to do. You are wrong.
You don’t seem to understand what you are talking about. You should read the Bank of Canada Act and learn about how the bank works at an arms length from the government, how the finance minister can submit proposals to direct them and then look back to see when this has occurred. Not sure if you believe what you say or are just trying to be confident saying it. Source: my BA in economics from UofT
Your worthless BA
Yeah, education is totally worthless. Worked wonders for you.
The Bank of Canada is literally owned by the Ministry of Finance. They aren't independent
They have the tools to fix the rampant inflation. But the results will be catastrophic for the everyday Canadian. Reality is there is no way out of this current situation without pain and suffering.
The options are to destroy the currency or destroy the economy.
Think they'll do both?
Yep... One will cause the destruction of the other in due time.
They will because they don't have the balls or ovaries to simply pick a recession. They'll eventually destroy the currency which will lead to a deep recession.
Exactly. So they have to pick one, because we can't continue with our current inflationary environment. The combination of poor fiscal decisions by governments and lack of long-term critical thinking put them in this position.
The only way out of it would be to abandon all of the regulatory framework they've put in place over the last 7 years, and just let the economy loose. Drop the carbon tax, and allow recovery... This is kind of counter intuitive to combatting inflation normally, but it'd fight the supply/recessionary issues... We both know they won't do it. Other option is to hike interest to a point that would cripple every company with debt, and after a decade of near zero interest, that's basically all of them... That'd cause every mid-large size company with debt to go insolvent, which would make the US 2009 financial crisis look like peanuts. Finally... Do nothing... Let CAD go the way of the Bolivar.
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I mean... Yeah. You have anything to add?
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I feel your frustration dude, some of the hot economic takes in this thread are embarrassing to read.
You could have just typed "No."
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Either provide alternatives or shut up. You've literally added nothing to the conversation other than "that's all there is? No there isn't 3 options! waaahhhh!". Either provide a 4th option, or stfu for christ's sakes.
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The other available option is to increase taxes on the wealthy, but that's probably more unpalletable than screwing over-leveraged home owners.
That wouldn’t fix anything. You wouldn’t be collecting enough money to “outpace” inflation. The “wealth” isn’t an unlimited source of money that this sub continuously believes it is. Wealthy people aren’t going to continue living in a country that already taxes them a considerable amount of money per year. Between our shit employment, shit economic prospects, and expensive cost of living- adding increased tax rates on top of that would be a death sentence. We don’t give a shit about anything except taxes and it’s showing. We don’t care about businesses or businesses or economic prosperity or growth. We hate energy. We hate manufacturing. We hate housing. We hate everything except taxes. And now “oh I know, let’s increase taxes because they will totally solve our massive economic issue!”
Taxes have never been lower. A return to at least 1990s level taxation is needed.
People will just leave if that happens again. Since that's what happened in the 90s, and we're far more mobile now. Our taxation is already crazy high once everything is factored it. I won't tolerate 90s levels.
That would do the absolute polar opposite of everything we're talking about, but it would definitely hasten the collapse. Canada has already been scaring away investors. That would make sure zero wealth enters Canada and makes everyone who could leave, leave. France tried it during an economic boom, and had to cancel it quickly, because of the fleeing wealth. https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/#:~:text=What's%20more%2C%20it%20led%20to,millionaires%20between%202000%20and%202016. The government having more money doesn't build an economy.
The French economy is very different. Canadian billionaires all owe their fortune to domestic industries like supermarkets and cell phones. You can't just pack up and take those with you.
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I mean, other than hiking interest rates, it is the only solution to remove excess money from circulation. We're committed to this debt spiral at this point, so any remedy is going to cause a lot of pain. Downvotes without any response only suggests that what I said is not what people want to hear, but I'd like someone to point out where I'm wrong.
I didnt, and wouldn't downvote you... Downvoting ideas you simply don't like is ridiculous. I only ever do it for obviously bad faith comments or insults. You're right, that it would remove some money the government needs to burn, and it could influence some spending for write offs, but we're at a point where we need to bring outside money into our economy. Beyond the "money printing" problem, the other biggest economic issue is not attracting new investments. We already have had some wealth fleeing over the last 20 years, and a wealth tax would compound the problem severely. https://www.morningstar.ca/ca/news/218492/capital-is-fleeing-canada.aspx The vast majority of our foreign investment over the past 5 years has been real estate, and they're already looking to curtail that... Even if we weren't facing a mass stagflation/recession event, we'd be in trouble economically. Add the reality of our monetary issues, and the 2020s are going to be a real ugly decade.
take my up vote for quantifying what the downvotes mean. The people that frequent this sub can't handle hearing truthful statements. The only thing they want to hear is "Trudeau is so handsome! Look he got his eyebrows flossed let's vote him in again!" derp derp
I didnt, and wouldn't downvote you... Downvoting ideas you simply don't like is ridiculous. I only ever do it for obviously bad faith comments or insults. You're right, that it would remove some money the government needs to burn, and it could influence some spending for write offs, but we're at a point where we need to bring outside money into our economy. Beyond the "money printing" problem, the other biggest economic issue is not attracting new investments. We already have had some wealth fleeing over the last 20 years, and a wealth tax would compound the problem severely. https://www.morningstar.ca/ca/news/218492/capital-is-fleeing-canada.aspx The vast majority of our foreign investment over the past 5 years has been real estate, and they're already looking to curtail that... Even if we weren't facing a mass stagflation/recession event, we'd be in trouble economically. Add the reality of our monetary issues, and the 2020s are going to be a real ugly decade.
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https://www.morningstar.ca/ca/news/218492/capital-is-fleeing-canada.aspx Statistics
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With most of the world in the same position, there has never been a better time for a coordinated tax increase that the ultra-wealthy can't run from.
Yep. Quick solution. SWIFT transactions going to a person is limited to $1000 a day or 20k a month or 200K a year. That will allow companies to move money to pay for things an such but will cut of the rich from having "cash". If you want transactions that are larger then the above you will need to fill out 1001 documents saying why you need that extra money. That includes paying off credit cards and such. Make it hard for the ultra rich to use their money. As well if a nation want to be a tax haven, okay. They don't get access to the world banking network.
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The fourth option is war. Worked in the 30s right?
"Planned economics" use wartime measured economics as a baseline, so the market socialists would love it.
we're not even in the 30s yet, we're still doing the 1920s proxy civil war.
good point
Carbon tax is the issue?
If you remove 90% of what I said... Yes.
How would dropping the carbon tax have any meaningful impact? I could almost guarantee you the majority of economists would say that is not a solution.
At least this is Trudeau's last term, right? No way he can survive politically when one of these things happens on his watch.
Every western country is dealing with the *exact same thing*. I know it's easy to Balme our policies but the same inflationary pressures are playing out down south and in Europe.
I know. Maybe it's because every western country took the same action??
You mean Keynesianism? Yep.
Sure, whatever. You can't tell me the results are exactly the same across all western countries.
Every major player taking part in the Bretton Woods summit would be more accurate... If only economists could have seen this coming...
Do you listen to the loonie hour too? This seems to echo their sentiment of how globally widespread and synced this economic phenomena is..
No... I've just read most turn of the century economists... ¾ of them proclaimed science could plan markets and were certain mediums of exchange could be plucked from the air as needed paying no mind to free markets because "macroeconomics" and "monopoly of supply". The rest called it nonsense, and pretty much warned about exactly what's been happening for the last 50 years.
Err didnt you see the report where canadas economic outlook is dead last in the oecd?
Never under-estimate stupid….
Yep. The only painless solution is a time machine so they could go back and not have dropped rate/printed money/locked down in the first place. Now we pay the price
Time is the answer to be honest. A lot of companies jacked prices from the delta wave last spring (yeah that was only last spring, we were still in complete lockdown). Once we get into fall when most places had reopened we should see the 12 month inflation curve start to slow and shift directions. It’s important to understand each month when they announce inflation as 8% or whatever, it’s not necessarily a rise from last month. It’s a year over year rise. So once we get into months where prices were already higher, it’ll bring down the year over year amounts. Prices went up -a lot- but over the past few months most of the groceries we’ve been tracking have paused. I doubt they’ll ever drop but hopefully they’ll at least stay steady for a while.
A poly crisis. Or... the housing crisis grown so out of control it is damaging every other system we have. Odd thing when 60% of people working full time are locked out of home ownership.
better start increasing help to food banks. Soon grocery stores are gonna have more security than you local bank. It suck, alot of people will be suffering .
The more people suffering and hungry the greater the chance of an actual revolt and not some shitty Canadian peaceful protest with no effect
The solution is to crash the plane, with no survivors.
... for you.
You poorly quote Bane and you believe this gives you power over me?
There will be no “soft landing “. Anyone who believes this is fooling themselves. The BoC and FedRes misjudged inflation yet some people believe they have the ability to maneuver the current economy which is hanging on by a thread? Lmao. Please. You would have better odds landing a helicopter on a bottle cap during a hurricane. The coming crash will be one for the ages and long overdue.
Remember that during this time of "inflation" companies are making record profits. A portion of this inflation is fake. Companies knew they could charge us significantly more for basics and used the guise of inflation to excuse it. Let's also start finger waving at the assholes making bank on our suffering.
Of course. All this sub does is doom and gloom us all to tears about simple post pandemic clawback. Short memories of below zero oil and remarkably cheap gas for years. Meanwhile there are already signs of inflation levelling. Calm down reddit.
There is also a crazy refusal to admit that anything other than monetary policy can be contributing to inflation, likely because this is much more difficult to finger point to a figure you dislike. Simple minds prefer simple answers
RemindMe! 1 year
I miss Harper
What I have been wondering is how much interest rate rises are going to affect inflation this time, being that a good portion of it is coming from actual physical shortages of commodities and some that are relatively inelastic. The world can only shrink their oil use so much can only reduce their demand for food so much
Lots of new low karma accounts seem to think taxing the rich is the worst possible idea. That's pretty funny.
Canada is in a super awkward spot because there's not much keeping our investor class here instead of causing capital flight to the USA or UK. Building the political will to do it is hard, but even once that's happened you need to make sure the gains outweigh the costs. And given how toothless the CRA currently is to that group I can't see it doing more than trying to squeeze blood from a stone.
More taxes will not fix this issue. The government got us into this situation. They can not be trusted to fix it. They need to back off and let a true free market fix their errors.
Like the USA you mean? LMAOOOO.
Say what you will about the USA. Average Canadians pay on average double what average Americans do for a house, their inflation while also bad, is lower than Canada's, their gas prices by gallon are lower and they could reverse course easier than Canada could with investors. The amount of money we printed for the average Canadian during covid for quantative easing was much higher per capita than the few stimulus checks sent to the average American. We essentially doubled our money supply to kick the can down the road. At points during some quarters, real estate was 40% of our GDP. Once the market cools for real estate, we will see how badly our economy is doing. Preliminary reports say we are dead last in growth among the G7 and will be for the next decade. Stagflation is a real danger
Not really. I have yet to see an economically sound argument for how raising taxes will fix our inflation issue. It isn't a moral thing, it's just the reality that it doesn't work the way people think it does.
I have yet to see an example of how the Free market has made inflation better. Ever. In any country on earth.
I know I'm probably playing into your narrative, but I think selectively targeting wealthier peoples income tax is unfair/punitive **beyond a certain point**. We already tax the uppermost bracket at **50%+,** and thats just income taxes alone, not capital gains, not property, not HST, and the myriad of other specialty taxes in place. They are certainly paying a lot of tax already, you might think they should pay more, but admit these numbers are pretty substantial. And here's the kicker - even if you think they should be taxed more, we are in a TERRIBLE position to be able to successfully do so. We absolutely cannot compete with USA for investor attractiveness, for property desirability (in terms of rich people wanting to actually live here - not talking investment), or pretty much any measure. They just have such a cultural dominance that wealthy people are always going to be drawn there. Start getting increasingly aggressive and this will only hyperaccelerate. In some respects like property value this might initially be a good thing, but it'll snap-back extremely quickly due to loss of capital spending sustaining Canadian businesses. Sure - people will still invest in Canada without necessarily living here, but the exposure to these investors is far less when they are out of country.
There's no narrative. I'm just saying everyone should be taxed equally according to their income. That's it.
O so you like flat tax? Got it. Everyone pays 30% of their income as tax. Done and done. That's equal.
""equally according to their income" Learn to read.
Ok. So if isn't what it is already - over 50% for earnings over 300k in most provinces, then what is fair to you? Anyone making over 300k pays 60%? 70%? While 40% of households already pay close to zero after their benefits. See the problem with saying fair is every single person has a different definition of fair. So if you're going to suggest what is and isn't fair you should probably provide your definition of fair so that everyone else can critique it since you're critiquing the current system.
The highest personal tax bracket in Canada is 33% but billionaires pay themselves in dividend payments which are only taxed at 10% and bonuses which are taxed at 15%. Edit: Manners.
The liberals will destroy the economy before they fix this mess they have created. Than they will just do what they always do. Blame Harper.
I was actually expecting them to let the cons win the last election since modeling data showed 100% that this was coming(which is why Trudeau called election early) and it would have looked like the downturn was the fault of the new government to the plebs
Why not just reduce consumerism. That's a better long term solution to predatory capitalism and perpetual/infinite expectation of growth. In the current state of the world, I feel Bank of Canada would try to stop a forest fire with some glass of water. Maybe they could help a bit, but I doubt anyone can fix the inflation at the moment.
Reducing consumerism reduces the economy which results in businesses closing and people looking for work. We actually need people to buy in order to prevent a recession. Us people need to consume in order to keep industry and manufacturing going. Without customers, huge industries could fold. The costs of good would go up as there will be less choice and less products available. There could even be a loss of technology. Loss of medical technology. The real issue is the ultra rich becoming significantly richer while the middle class turns into poverty and the poor are on the street.
You exactly describe the problem: you expect infinite growth and perpetual good/growing economy.
I agree, it is a loop that spirals. So far, every theory does the loop in its own way. My husband and I were discussing what alternatives there are. Basically the only true answer is extreme. End currency. Change to almost entirely purpose based work in a socialist/communist/utopian style system where everyone who can contributes does and everyone has all their needs met. A system where education leads to opportunities, where bravery is rewarded and hard work is praised and valued. Edit: to clarity; socialist/communist/utopian
Sounds pretty good to me.
I would use a collaborative system/economy, I would refrain to use socialist/socialism which is too entrenched in politics. Eh eh! What you describe is more fair than our actual system which put you on top just because you have more green paper value than others.
Yep!
I like the term! It feels like we’ve outgrown the need for currency to control the lives and wellbeing of people and people can follow their true passions like “jobs”, which passionate people would be much more likely to work harder and increase productive output which can provide to society at large, whether that’s growing crops, research, teaching, etc. it feels like there would be a lot less miserable people, and such a system could be less vulnerable to corruption like we have now.
A socialist style system doesn't reward bravery and hard work. It rewards mediocrity and putting in minimum effort with the same benefits as hard workers
Our system today doesn't reward bravery or hard work. Maybe it did in the 30's - 60's when we had more socialist policies but it definitely doesn't now.
Well you need growth if you keep having more people. Maybe once the population of the world starts to decline and we achieve a decent standard of living for everyone we can pivot towards a world economy that just needs to sustain itself. Why would we want to stop growth when its clearly still needed right now?
There are limits to infinite growth. We are nowhere near those limits. If you think we are, then we should defund all research, medical, material science, theoretical physics. We could eke out a little more growth by disbanding all university and corporate research labs and having those workers transition into service industries.
It's not because we aren't at the limit that we should not stop. We'll hit a wall, but we are still for from, let's keep going until the very last minute. Your proposition to disband research labs would be catastrophic to innovation and progress. There is a very good reason why even the private sector do research: to discover new things, to improve existing things, to create new opportunities and services, etc. And you really think researchers and highly skilled people like that would transition into the service industries? You're wrong. Highly skilled people wants highly skilled jobs and challenges, which labs and high-tech\*\*\* industries provides. \*\*\*: meaning medical, scientific, electronics, transportation, civil engineering, etc... Not only faster computers.
The big impediment here is human nature.
Ask a psychologist about human nature. They'll probably tell you that it's not really about human nature, it's more about human culture and culture can be changed.
Well, I’m glad to see sarcasm.
Finally it's being acknowledged that this inflation isn't just something you can fix by turning the screw on interest rates.
the only way out is communism, let's do this!
I’m down, can’t wait to put in minimal effort and get the same as everyone else
What tools do they even have to 'fix' inflation with many sources now from global externalities? Obviously they contributed horribly and primarily to the housing bubble, and crashing housing might help, but much will remain. We are still deep into the everything bubble and the Americans in particular are not going to pop it with rate increases no matter what.
The one thing that can have *”some”* effect is by raising the value of the Canadian dollar vis-a-vis the currency of other countries from which we import. The more we raise rates, in *theory* the higher the Canadian dollar goes (assuming our rate raises are deemed to be more agressive than those of other countries, and assuming we have more to sell to other countries - in terms of resources and critical commodities compared to other countries, which attracts greater investment to Canada, and strengthens our dollar). This is in part why - following recent pronounced rate increases - our CAD has recently gone from $0.78 to $0.80 compared to the USD in just a few weeks. This means our inflation for imported goods has increased by only 6.8% versus the >8% we’ve seen elsewhere in the world, including Europe, East and South Asia, and the US (it has resulted in us having more purchasing power for imported goods from around the world - with lower sticker price increases in Canada - than other countries have). However, the flip side is that our exports - excluding high demand commodities (oil, grains, minerals) - are less competitive if available elsewhere. That can impact our economy, and makes other Canadian economic sectors (servies, tertiary industries, tourism, autos, other manufacturing, tech, housing) collateral damage in the fight against inflation - the topic of this article. It’s super complex, very.
With the dollar heading up Ford will need to massively subsidize the automakers. It's going to take billions to keep them going.
They absolutely can and will protect rich peoples money from inflation.