Government intervention is the problem, not the solution.
It appears that after months of downplaying the problem and siding with the rhetoric coming out of the Bank of Canada, the establishment press is finally acknowledging that inflation is a real problem.
Global News reported on a survey showing rising concern among Canadians regarding inflation:
“Nearly four out of five Canadians are either worried or very worried about rising inflation, a new Ipsos poll conducted exclusively for Global News found.
As Canada’s annual inflation rate hit 4.7 per cent in October, the fastest pace in nearly 19 years, soaring living costs have become a top concern for 78 per cent of Canadians the poll found. Only six per cent said they weren’t at all worried about rising prices.”
Maclean’s is also talking about inflation:
“Across Canada, household costs in 2021 went on an upward ride unlike anything seen in nearly a generation. The countrywide inflation rate in September hit 4.4 per cent, the highest since 2003 (in P.E.I., it reached a blistering 6.3 per cent). And the turbulent climb seems nowhere near done. The Bank of Canada forecasted inflation worsening in late 2021 to around 4.8 per cent—a three-decade high—and continuing above target levels well into the new year.
The result will be an economic chain reaction affecting nearly everyone in the country. Families will spend more to stock their refrigerators and heat their homes; faced with rising costs, workers will demand higher wages from employers who are shelling out more for rent, supplies and merchandise. But if the central bank moves to tame these effects by hiking interest rates, mortgage costs will rise—sharply, for many—and businesses will pay more to borrow money, blunting any relief from the lower relative prices. “It’s not the double-digit inflation of the ’70s,” says Sohaib Shahid, director of economic innovation at the Conference Board of Canada. “But I think the pinch will be felt.””
And, as if this recent conversion by the press towards worrying about inflation wasn’t enough, the Bank of Canada is now trying to warn about the surge in real estate investment, noting it could cause serious economic problems if the housing market ‘corrects.’ What makes this so hypocritical is that it is the massive money printing and low interest rate policies of the Bank of Canada that has so heavily distorted the housing market.
When the state floods the economy with printed money, true value is obscured, and speculation runs rampant. For the Bank of Canada to complain about this, as if they are somehow disinterested observers, is absurd.
But let’s get to the deeper problem:
By trying to ‘address’ the surging cost-of-living, governments are just making it worse.
Consider the response of the Trudeau government.
In the throne speech, they promised even more spending – on top of the massive surge in spending we’ve witnessed over the past two years.
More spending on ‘affordable housing.’
More spending on the oft-promised national childcare program.
More spending on ‘climate.’
And more spending on ‘pandemic aid’:
“The Trudeau Liberals have outlined their latest aid package for an economy recovering from COVID-19, proposing targeted support to severely affected businesses, locked-down workers, and extra weeks of benefits that expired just days ago.
The legislation introduced Wednesday in the House of Commons is one of four bills the government wants MPs to pass before the middle of December ahead of a scheduled winter break.
The Liberals are proposing to send $300 per week to workers who find themselves off the job because of a “COVID-19-related public health lockdown in their region” between now and spring 2022.
Those payments would be retroactive to Oct. 24 when the Liberals let a pandemic-era benefit for the unemployed expire. The Canada Recovery Benefit’s siblings — sickness and caregiver benefits — would each get revived after expiring this past weekend with two more weeks of eligibility until May 7.
Wage and rent subsidies for businesses would be more generous and targeted over that same period to still-hurting tourism, culture and hospitality sectors, as well as a long list of establishments like movie theatres, arcades, casinos and gyms.”
That all sounds nice and good, but it amounts to the same thing:
Spending a bunch of borrowed money, thus flooding the economy with more fiat currency created out of thin air.
This will only serve to further increase the cost-of-living, making the problem even worse.
It’s a politically tough point to make, as the ‘benefits’ appear immediate and tangible, while the negative consequences are more broadly distributed over time.
What I mean by this is the Liberals can point directly to people who will get government money as a result of their spending, while the overall debasing of our currency and attendant rise in the cost-of-living will impact all Canadians, without it being obviously linked to any specific instance of government ‘largesse.’
Government-caused problems can’t be fixed by more government
The fact is, regardless of how politically difficult the point may be, we face a reality in which governments are claiming they can ‘fix’ problems they themselves caused.
We know that the Trudeau government doesn’t really want to address inflation, since it serves their agenda of deepening reliance on the state, weakening the financial independence of Canadians, reducing our freedom, and taxing people through hidden means.
Still, they want to appear as if they are ‘taking action.’
But since the problem was caused by overspending, money printing, and climate virtue-signalling that restricts cheap energy, more overspending, more money printing, and more climate virtue-signalling can’t fix it.
We need less government
Big government is so dramatically distorting the market that the first step towards getting the rising cost-of-living under control is for the government to take a big step back.
We need less government spending.
We need the elimination of the carbon tax, a tax that is highly inflationary since it is explicitly designed to make life more expensive.
And, we need to stop all the money printing. Through a combination of sound money at the federal level, and an increasing openness to private money – Canada should join El Salvador in naming Bitcoin legal tender – we must begin to end the dominance the state has over our money.
To lower the cost-of-living, Canada needs more freedom and less government.
Spencer Fernando
Photo – YouTube
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