Canada’s economy has hardly grown, and America’s economy is rocking upon the cliff of recessionary blues

BY STEVEN KASZAB

We the citizens of the world should be quaking in our boots today. Why? Our governments are highly leveraged, and in so much debt that simple interest rate increases could bring some governments into insolvency.

Ontario is the most indebted Provincial Government in Canada. California and Hawaii residents are the most indebted in their nation, but also those most active at paying down their debt. Our governments and neighbours have borrowed seemingly unlimited funds, only to realize that with the potential increase of interest rates, a credit crash will soon follow.

“Why is the Bank of Canada patting itself on the back and handing out millions in bonuses and pay raises while Canadians are struggling to pay for groceries and gas?” asked Franco Terrazzano, Federal Director of the CTF. “If its objective is to keep inflation low, then it doesn’t make sense for Canada’s central bank to hand out bonuses and pay raises while the cost-of-living soars.”

In April of 2020 America’s Public Debt was 24.97 trillion dollars, paying 0.6% interest. Washington will increase the interest rates through its fight to bring inflation downward. It may be successful, but the national debt levels are going to increase too, to a whopping trillion dollars a day in the near future. That will cause the government in Washington and many State capitals to increase taxes. A vicious cycle will be set and unyielding for a decade or two.

Governments have difficulty admitting to their error and therefore will continue their practice of inflation, and increased taxes. In 2020, the Bank of Canada gave pay raises to 1,728 employees, costing $5.3 million. In 2021, it gave pay raises to 1,857 employees, costing $5.2 million. It did not cut the pay of any employees in 2020 or 2021.

In addition to pay raises, the Bank of Canada gave bonuses to 1,632 employees in 2020, costing $16.2 million. In 2021, it gave bonuses to 1,752 employees, costing $18.4 million. The Bank of Canada told the CTF that it hands out bonuses for “successfully meeting or exceeding expectations.”

The federal Crown corporation’s mandate is to keep inflation around 2%, meanwhile consumer prices increased by 8.1% in June 2022; the largest annual increase since 1983. Year-over-year consumer price increases were above 3% for nine consecutive months in 2021.

The central bank printed more than $300 billion during the pandemic by purchasing financial assets such as government debt.

The massive amount of money borrowed by our governments and given/lent to the citizens of our fair land, present corporations with the desire to get a piece of that action. Canada’s Government handed out an unprecedented 240 billion dollars to its citizens and business establishments, while America shared over four trillion dollars too. The corporate elites look at this money and salivate at the opportunities available to them to get a large portion of this money. All the while, the economy is slowly going to hell. Canada’s economy has hardly grown, and America’s economy is rocking upon the cliff of recessionary blues. Mexico’s economy was hit badly by the pandemic, and continues to struggle along.

The EU is witnessing a situation not felt since the post war era: stagnation, excessive public funds spent, a war on its borders and multi-millions of refugees and immigrants of opportunity within their borders. Huge financial stress placed upon a politically divided confederation. Even the I.M.F. (International Monetary Fund) hesitates at loaning billions to economies not growing, but still spending.

Pay off your debts. Save some funds for a rainy day. Less reliance upon public coffers is the ticket.