Excessive money-printing, deficit spending, and a move towards a Universal Basic Income will all further destroy the incentive to work, produce, and achieve that has made our country successful.
For all of our problems, Canada remains one of the wealthier countries on Earth.
This is despite many years of incompetent government policy, a betrayal of Canadian workers by much of the elitist political and corporate class who sold off our manufacturing capacity to foreign countries like China, and the strangling of the Western Canadian energy sector.
Even all of that has failed to completely ruin the country, because so much genuine productive effort went into building it up, and because many Canadians still work incredibly hard, even with their government standing in the way.
In many ways we are driving on the fumes of the effort of past generations, who prioritized saving, investment, restraint, and tangible production.
Those fumes still have some power, and that can fool many people into thinking that things are going just fine.
But if you look around, you can see the danger.
Our economy is increasingly a house of cards, built on the creation and movement of excessive money printing driving up the price of assets, rather than true productivity gains.
We are borrowing from the future to continue consumption in the present.
Consider the housing market.
With artificial development restrictions and high immigration levels already driving the market to absurd heights, the glut of printed money pushed out by the Bank of Canada in the past year and a half has further driven up the market.
This shows up as economic growth, since the ‘value’ of a large part of the economy is rising.
Yet, this very different from the value of a company rising because they managed to boost production by 25% in a year or something similar.
Instead, these are homes that aren’t changing in any material way, but are simply being driven up in price.
To get a sense of how intangible and dangerous this is – especially with a larger and larger portion of our GDP being based on the housing market – consider what happened in the United States.
That country spent years betting on the housing market to drive up their GDP growth, and it looked like it was working, until it stopped working.
And when that happened, in the 2008 crisis, all that wealth and growth was wiped out.
As we’ve seen, a country can evade reality for a while, but not forever.
For years, Western economies like Canada have watched as tangible activity declined.
Fewer real things are produced in our country, with production outsourced to ‘cheap labour’ nations.
Of course, that cheapens labour in Canada as well, since if fewer people have well-paid jobs building real things, then their lower wages are used to buy the cheaper products made overseas.
A few big corporations may win, but most people lose.
This has not only been an economic disaster, but also a national security disaster, as we saw when Canada and much of the world was suddenly dependent on Personal Protective Equipment from China.
Indeed, portions of Western military production is also dependent on products and resources from China, a stunningly horrendous strategic weakness that seemingly borders on treasonous on the part of the politicians who allowed it happen.
Imagine if during the Cold War NATO required Soviet production for some of their most sophisticated military equipment…
Arrogance leads to downfall
Great civilizations have fallen throughout history, and arrogance often leads to that downfall.
The elites of the Western world thought they could abandon everything that made the Western world great, outsource tangible production to foreign nations, and reap the financial rewards without consequence.
But of course, there are consequences, and we’re seeing them now.
And yet, the response in much of the Western world hasn’t been to seek a return to the values of restraint, hard-work, and fiscal responsibility, but instead to flee into a fantasy-world.
That fantasy-world consists of simply wringing out the last bits of wealth and productivity from our past successes, while failing to renew and reinvest in a way that would enable that success to continue.
It’s akin to the generations of a wealthy family.
In the first generation, someone goes from being poor to being rich, establishing the family fortune. They have an amazing work-ethic, and an understanding of how the fortune was made and how it can be maintained, since they built it.
In the second generation, there is some distance from the struggle to become rich, but there is direct knowledge, and direct teaching that often leads to a continuation of success, or at least stability.
But in the third generation, that is often when you see wealth squandered with abandon. So far removed from the sacrifice necessary to succeed, and having grown up only knowing nothing but easy luxury and abundance, it’s easy to forget that such a lifestyle isn’t the natural way of things. Decadence and laziness often sets in, and the seeds of destruction are sown.
So it is with many countries, and Canada is clearly in that third generation.
We are printing money with reckless abandon, debt is rampant everywhere, and now, we are seeing the rise of a decadent attitude among our top political parties.
Universal Basic Income: Give me an allowance!
“Give me money for nothing.”
It’s the attitude you expect from children, those who are entitled and don’t know any better.
Civilizations that succeed reject that attitude, knowing full well that money has to be earned.
Indeed, there can be no actual ‘value,’ and nothing to ‘spend’ on, unless productive effort first generates a product.
If you give someone money for nothing, you must have first taken that money from someone who earned it, and then decided not to give it the individual who produced it, but instead give it to someone who didn’t.
And that brings us to the Universal Basic Income.
With the NDP pushing for it, the Liberal grassroots (and many Liberal MPs) demanding it, Canada moves closer to full-on decadence, the kind of money-printing, free-spending ethos that presages the death-knell of stability and common-sense in a nation.
Standing in the way of that should be the Conservative Party of Canada, as the bastion of those who seek to return to a more fiscally conservative and restrained plan for Canada in order to avoid disaster.
But lo and behold, it appears even the CPC is embracing the decadent path.
As I wrote about recently, the CPC appears to be considering campaigning on a Universal Basic Income.
Further, amid an absolutely absurd surge in federal spending, the CPC plans ‘no spending cuts’ whatsoever, and won’t balance the budget for another decade:
“Wow @erinotoole leader of the @CPC_HQ promises the party will take a knee on balanced budgets for at least “a decade or so” and promises no plans to get back to balance and “no cuts” great interview from @cbcradio taken from @TheCurrentCBC #cdnpoli #canpoli”
Wow @erinotoole leader of the @CPC_HQ promises the party will take a knee on balanced budgets for at least “a decade or so” and promises no plans to get back to balance and “no cuts” great interview from @cbcradio taken from @TheCurrentCBC #cdnpoli #canpoli pic.twitter.com/P0z3vi3V8U
— Clinton P. Desveaux (@ClintonDesveaux) June 1, 2021
Take note of how (and it feels like living in bizarro world to write this), the CBC reporter seems more reasonable than the CPC leader, pointing out that massive amounts of money have already been spent, the deficit is gigantic, and spending cuts are necessary.
O’Toole couldn’t even bring himself to admit that.
If the ‘conservative’ opposition in a country is afraid to balance the budget, and if they’re considering a gargantuan Universal Basic Income scheme that completely goes against both Conservative principles and against the principles that helped build Canada in the first place, you can be certain that decadence has set in to a massive degree.
Canada must reward work and savings
A universal basic income, low interest rates, and massive money printing all makes those who work into suckers.
The more you work, the more is taken from you to fund those who don’t work.
The more you work, earn and save, the more your money is eroded through inflation, and low interest makes saving almost pointless.
Meanwhile, those who don’t work, and those who spend recklessly will be rewarded.
And, since people won’t tolerate being suckers for long, the incentive structure of such a society will shift more people from the ‘worker category’ to the ‘reckless consumer’ category.
Until of course, a critical mass realize the system is unsustainable, confidence collapses, and a return to fiscal responsibility is forced by reality.
Turning from that path before it’s too late would be the best thing to do, and that will require ensuring the CPC faces enough internal pressure to abandon any idea of a socialist-style Universal Basic Income, and returns to fiscal responsibility. Or, if they fail to do so, those who are putting them on a decadent path must be defeated and replaced by those who actually want to protect Canada from fiscal calamity.
Canada must be a country that rewards those who work, because that is the only way we can not only maintain all that was built, but also ensure future generations can live in a nation that is free, prosperous, and secure.