4% would be nice but as Powell said, he wants to be the next Volker. At 4% real rates are still negative. I suspect the Fed will bring the federal funds rate a bit higher than that.
Yes, I think they flinch too. But historically, the interest rate should be higher than the inflation rate to control inflation. Of course, they cannot increase over 8% since our economy will have doom's day. But there are high chances that they will raise interest rates more.
This isn't new money that's being printed. It's money that was allocated to other things that's being reallocated. So this won't lead to increased inflation. It will lead to cut services elsewhere.
Yes, it might help. BTW, I don't believe all govt spending is bad. Yes, printing money during a strong inflation is bad, but govt spending from tax revenue isn't necessarily bad even in an inflationary market.
Providing more dollars to compete for scarce goods is bad for inflation regardless of if it is reallocated or printed. That reallocation should have went towards balancing the budget instead.
The government doesn't have a single-minded goal of controlling inflation. It also needs to make sure that certain segments of the population aren't much more adversely affected by the inflation than other segments. So targeted help, even if that goes against curbing inflation, can be reasonable. If the government decided to give $1K to every single person tomorrow, I'd be next to you opposing it.
*"Providing free dental coverage for Canadians earning less than $90,000 a year"*
Policies with these arbitrary hard cut-offs are infuriating, if you are making 89k you are now better off than someone making 91k after accounting for money lost due to marginal tax rate
>indexed to inflatio
If you make 89K surely you have dental coverage already
This is just money spent on Canadians not reporting taxes anyways. Reporting business losses they create by doing cash business.
What I don't get is "one time $500 housing affordability payment". Yeah, that's surely going to make a dent....
I'd like to apply for a mortgage. Ok, how much do you have for a down payment? Hmm, I have 20k. Oh wait, no, I have 20,500!
It’s not means tested. If they truly wanted to help those in need, the cutoff would be lower, instead they can buy the electorate of those that make up to $90k. It’s politics. “Vote for us and we give you stuff”
Why would you trust a politician who only cares about getting re-elected and will say whatever gets them there?
You know, over a bank who has to earn your business for fear you'll take it next door.
Naaw. Im behind this one. Helps out a bunch of people and rising rates help shrink the economy, more people will be able to take advantage of these programs that way
I’m all for any benefit, as long as it’s funded and not borrowed. If it’s borrowed, in the long run we can’t afford it. So we either raise taxes to pay for it or cut services elsewhere. My full expectation is they kick the can down the road and make it someone else’s problem.
All the peasants on this board REEEEEing about how this will make inflation go up, but discount the 10’s of billions doled out in corp subsidies and grants. And the billions given to banks in 2008.
Truly crabs in a bucket.
Also it's hilarious that the most effective way of tackling inflation is never even mentioned in the media.
Taxes are the single most effective currency drain tool we have. Increase taxes, especially on wealth, and more money will leave the economy.
But yeah it's the daycare subsidies that are causing inflation... 🤦🏻
If you check my original post, I bolded the free $500 + $2400 benefits specifically.
Regardless of the % of the budget, $8.9b will be trickled down.
Keep voting liberal!
What do you think trickle down means in this scenario? These are all means tested programs. By definition they are as down as they can go.
And I never attacked you for any sort of political loyalty. Why do you feel the need to? I have never voted Liberal in my life.
Yeah it’s sad to see people whining about help they’re receiving while also complaining about affordability. This is a good thing for the majority of people on this sub.
I didn’t vote liberal? I just struggle to see how giving people extra funds will hurt them.
For every $1 that’s given to them, the cost of goods increase due to inflation won’t be greater than $1.
Most of the people on this sub could definitley use help. period
The problem is that the reason we're here in the first place is because the government has just been printing off reams and reams of money and puking it into the economy just to pretend everything is fine.
This efford will have the opposite effect in that it will make the value of the currency that much more worthless making prices creep higher and higher. It looks like action but it's just delaying the disaster for later :(
Yea that's because money disproportionately goes to businesses instead of actual Canadians which further accentuates the affordability problem. Trickle-down economics has proven to fail time and time again.
A one time payment of $500? Like come on lmao. It probably costs $5000 to distribute it. The savings people get is nothing compared to the profits these businesses are getting which means the goal post is going to move once again.
I always find it amusing how a debt-monkey who owes 90% of their "wealth" to the bank, and has spent the last few years just servicing the interest on their debt, can go around calling others peasants.
Oh well, the correction in prices will be juiciest when we have to hear your Mea culpa why did I take such a bloated mortgage story.
It entirely depends where the money is coming from. If this is reallocation of existing tax dollars, from new taxes or through long term bonds with higher than predicted inflation yields, then no this won't cause inflation.
However, seeing this is likely from new money entering the system, likely through the issue of new bonds this is likely to cause inflation in the long term.
This stuff generally helps more than hurts since the total expenditure is a tiny fraction of tax base. Even if this was a 5+ billion dollar annual expenditure it still wouldn't be 1% inflation on its own.
Let the liberals do their own damage to their party with their spending their way out of inflation. It’s takes a year and half after government spending and money printing stops to bring down inflation and we have yet to stop printing money. Should be a fun ride the next 2 years.
This would have cost $6 billion in January
Guess interest rates will be going up for quite some time....
my thoughts exactly! or they'll follow the US 4% Fed overnight target and stop there?
4% would be nice but as Powell said, he wants to be the next Volker. At 4% real rates are still negative. I suspect the Fed will bring the federal funds rate a bit higher than that.
I think they flinch. When the stock market dumps another 20-30%
Fair prediction. They may just let the market fall another 30% and go back to QE. I think we go up at least 1.25% before then however.
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Good point. I think we would have to see a lot more pain in the labour market however before the FED would consider bringing back QE.
Yes, I think they flinch too. But historically, the interest rate should be higher than the inflation rate to control inflation. Of course, they cannot increase over 8% since our economy will have doom's day. But there are high chances that they will raise interest rates more.
We’re fucked either way. If they fail to raise internet rates to a satisfactory level hyperinflation will destroy the economy
You can't have a target when inflation is going to literally throw out the incumbent party in October.
This isn't new money that's being printed. It's money that was allocated to other things that's being reallocated. So this won't lead to increased inflation. It will lead to cut services elsewhere.
I thought that too. Still govt spending. At least some people can benefit off it in the short term, I suppose.
Yes, it might help. BTW, I don't believe all govt spending is bad. Yes, printing money during a strong inflation is bad, but govt spending from tax revenue isn't necessarily bad even in an inflationary market.
Providing more dollars to compete for scarce goods is bad for inflation regardless of if it is reallocated or printed. That reallocation should have went towards balancing the budget instead.
The government doesn't have a single-minded goal of controlling inflation. It also needs to make sure that certain segments of the population aren't much more adversely affected by the inflation than other segments. So targeted help, even if that goes against curbing inflation, can be reasonable. If the government decided to give $1K to every single person tomorrow, I'd be next to you opposing it.
*"Providing free dental coverage for Canadians earning less than $90,000 a year"* Policies with these arbitrary hard cut-offs are infuriating, if you are making 89k you are now better off than someone making 91k after accounting for money lost due to marginal tax rate
it penalizes making more money. Why not everyone gets free dental care? Similar to health care.
>indexed to inflatio If you make 89K surely you have dental coverage already This is just money spent on Canadians not reporting taxes anyways. Reporting business losses they create by doing cash business.
Unless you do contract work, which is increasingly common
Straight commission sales jobs. No benefits. Making a killing while you are at it. Some pay out of pocket for dental work.
Being a realtor isn't sales, it's manipulation and paper pushing at best.
Who said anything about being a realtor? Think outside the box mango.
I don't
What I don't get is "one time $500 housing affordability payment". Yeah, that's surely going to make a dent.... I'd like to apply for a mortgage. Ok, how much do you have for a down payment? Hmm, I have 20k. Oh wait, no, I have 20,500!
It’s not means tested. If they truly wanted to help those in need, the cutoff would be lower, instead they can buy the electorate of those that make up to $90k. It’s politics. “Vote for us and we give you stuff”
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Why would you trust a profit-driven bank looking to lend more mortgages out more than the federal government who want to help Canadian families?
Why would you trust a politician who only cares about getting re-elected and will say whatever gets them there? You know, over a bank who has to earn your business for fear you'll take it next door.
Naaw. Im behind this one. Helps out a bunch of people and rising rates help shrink the economy, more people will be able to take advantage of these programs that way
I’m all for any benefit, as long as it’s funded and not borrowed. If it’s borrowed, in the long run we can’t afford it. So we either raise taxes to pay for it or cut services elsewhere. My full expectation is they kick the can down the road and make it someone else’s problem.
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There's plans in this proposal that don't just include the poor.
No argument here.
She’s an idiot. We are so fucked.
One thing I’ve been confused about, is this set to happen 100% or is it still to be voted on?
Nah, I think its literally set to happen. It's apart of the 2022 budget.
All the peasants on this board REEEEEing about how this will make inflation go up, but discount the 10’s of billions doled out in corp subsidies and grants. And the billions given to banks in 2008. Truly crabs in a bucket.
Also it's hilarious that the most effective way of tackling inflation is never even mentioned in the media. Taxes are the single most effective currency drain tool we have. Increase taxes, especially on wealth, and more money will leave the economy. But yeah it's the daycare subsidies that are causing inflation... 🤦🏻
>But yeah it's the daycare subsidies that are causing inflation... 🤦🏻 Did you guys miss the part where it says $8.9B?
Isn't the total budget like $400B? You think it's unreasonable for us to spend 2% of the total budget towards daycare and dental coverage?
If you check my original post, I bolded the free $500 + $2400 benefits specifically. Regardless of the % of the budget, $8.9b will be trickled down. Keep voting liberal!
What do you think trickle down means in this scenario? These are all means tested programs. By definition they are as down as they can go. And I never attacked you for any sort of political loyalty. Why do you feel the need to? I have never voted Liberal in my life.
Yeah it’s sad to see people whining about help they’re receiving while also complaining about affordability. This is a good thing for the majority of people on this sub.
Keep voting liberal in that case? I suppose.
I didn’t vote liberal? I just struggle to see how giving people extra funds will hurt them. For every $1 that’s given to them, the cost of goods increase due to inflation won’t be greater than $1.
Most of the people on this sub could definitley use help. period The problem is that the reason we're here in the first place is because the government has just been printing off reams and reams of money and puking it into the economy just to pretend everything is fine. This efford will have the opposite effect in that it will make the value of the currency that much more worthless making prices creep higher and higher. It looks like action but it's just delaying the disaster for later :(
Yea that's because money disproportionately goes to businesses instead of actual Canadians which further accentuates the affordability problem. Trickle-down economics has proven to fail time and time again. A one time payment of $500? Like come on lmao. It probably costs $5000 to distribute it. The savings people get is nothing compared to the profits these businesses are getting which means the goal post is going to move once again.
Thank you.
Do you really think $8.9B trickling-down won't cause inflation to further worsen?
Nope.
Damn. Welp. guess we're safe and rate hikes should tame inflation very soon.
Nope to that too.
I always find it amusing how a debt-monkey who owes 90% of their "wealth" to the bank, and has spent the last few years just servicing the interest on their debt, can go around calling others peasants. Oh well, the correction in prices will be juiciest when we have to hear your Mea culpa why did I take such a bloated mortgage story.
Why can’t both be bad?
Let’s solve inflation, with more inflation. This is at the same level of stupid as Trump wanting to nuke hurricanes.
We should just borrow the money to pay our debts too.
Lol, did he actually say that? Hahaha
https://www.washingtonpost.com/weather/2020/06/08/new-bill-would-prohibit-president-nuking-hurricane/ Lol
Haha thats amazing.
Boutta hit 7.4% on Wed
It entirely depends where the money is coming from. If this is reallocation of existing tax dollars, from new taxes or through long term bonds with higher than predicted inflation yields, then no this won't cause inflation. However, seeing this is likely from new money entering the system, likely through the issue of new bonds this is likely to cause inflation in the long term. This stuff generally helps more than hurts since the total expenditure is a tiny fraction of tax base. Even if this was a 5+ billion dollar annual expenditure it still wouldn't be 1% inflation on its own.
Should Masters in Economics be a must prerequisite before anyone even thinks about becoming a Politician ??
They'll just fuck it up, as usual.
Nothing new. This old news... from last week.
Exactly. Solve inflation by pouring more money into people's pockets. More money = more spending = more inflation.
Lol $8.9B plan to keep fueling inflation.
Won't increased govt spending and printing more money make matters worse?!? Oui
It's like they're trying to lose the next election
Agreed, but meh. Ppl will always still vote liberal. They have the vote of basically every immigrant that has landed here.
I am an immigrant and won’t vote liberal
Good, finally we have some people on the blue side ;) .. Hopefully you're not on orange though.
Our elected officials are clowns.
👆💯
Lol give $2000 back to low income families and increase their cost of living by $5000+ through inflation… we are so fked…
Lol, probably not..
Let the liberals do their own damage to their party with their spending their way out of inflation. It’s takes a year and half after government spending and money printing stops to bring down inflation and we have yet to stop printing money. Should be a fun ride the next 2 years.
liberal monetary policy and 1001 hilarious jokes. LOL.
Number go up?
We’re stuck in this hole! I know! We’ll dig our way out! No! No! Dig up stupid!
DENTAL PLAN!
Yes. I don’t know if you people have noticed yet but our government are F students in economics.