Comment 74162

By A Smith (anonymous) | Posted February 10, 2012 at 15:32:34 in reply to Comment 74157

If we want tons of jobs, we could have them, but we need to drop our irrational fear of the federal debt.

The federal debt is not a debt our children will owe, it is their inheritance. It is a gift that the feds have given us by spending more than they have taxed us.

Think about it...

When the government spends money, that money ends up in private bank accounts (nurses, teachers, pensioners, etc).

When the government taxes Canadians, it takes money out of our bank accounts, thus depleting our savings.

As for how this affects the job picture, ask yourself why FedEx hires more workers over Christmas? It's not because they're feeling festive, it's because they have more orders to ship things.

Businesses hire when they NEED workers.

The ONLY reason we have a lack of jobs is because people aren't spending enough. That's why the Bank of Canada keeps rates low, to encourage spending.

The problem with low interest rates is that eventually they hit a limit and that is 0%. We are currently at 1% for the target rate.

In other words, monetary policy will soon be irrelevant as Canadians find themselves with debt they can't pay, regardless of the interest rate.

A better idea is to cut taxes.

If the feds did this, people could use the extra money to either pay down bank debt and/or increase spending. In other words, by running a higher deficit, we could put more people back to work, while also reducing risk to the banking sector.

Furthermore, because federal debt is issued in Canadian dollars, the only risk would be currency devaluation, not insolvency, as we have been led to believe.

I don't know about you, but I could live with a 90 cent dollar, if it meant 4% unemployment and plenty of jobs to go around, rather than 8.1% unemployment and a dollar at parity.

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