The free lunch

On Thursday Chrystia will drop the premier Trudeau-Singh budget. Six days later the Bank of Canada will deliver the first honking half-point rate increase in decades. Meanwhile we have hot inflation, a big war, post-pandemic full employment and $2 million average houses.

Nothing, in other words, is truly normal.

What happens four sleeps from now?

The feds, says Scotiabank, will be spending a ton more money – maybe $150 billion. This will be offset by (perhaps) $100 billion in new tax revenues, so we end up with another triple-digit annual deficit. That will be added to the nation’s debt, now well over $1 trillion, and soon to require annual interest charges larger than almost every social program (over $40 billion).

Conservatives worry about this. Libs and Dippers do not. In fact, new spending in this week’s budget will cover a national dentalcare plan, plus (probably) free universal pharmacare. Maybe some kind of guaranteed annual income, too. Oh, and $9 billion more for the latest enviro plan. And extra billions for reconciliation, now that the Pope did his thing. And did I mention eighty new fighter jets?

Anyway, you can see the trend. The current government has, in seven years, doubled the national debt. As this pathetic blog mentioned last week (and nobody cared) this is more debt under one prime minister than the total red ink of every leader who came before, combined.

Unfortunately for the paleos who fret about balanced budgets, the nation wants more. More government. More programs, services, spending, safety nets and universality. Nobody gets elected these days promising less. The fiscal meanies on the right side of the political spectrum are fading into insignificance as the kiddos come to embrace the thing called MMT.

What is it?

Modern Monetary Theory says, simply, government can create money so it can therefore spend whatever the people want, without consequence. Because money is backed by the government, and not anything tangible (like reserves or yellow rocks), politicians can order up as much as they wish through the Bank of Canada.

MMT adherents think this can do away with the need to finance public spending through taxation or borrowing by way of issuing bonds. Governments won’t run deficits or accumulate debt as new funds are create to pay for the things citizens desire. Like free child care, education, health care or income. Canada could even just print enough to pay off the national debt, thereby eliminating debt service charges. And the Bank of Canada should set its benchmark interest rate at zero, since MMT espouses that a sovereign nation has an absolute monopoly over its money supply and there’s no need to borrow any. Or pay any back.

Governments, they argue, are not like households or businesses. Overspending does not matter. Deficits, budgets and debts are largely irrelevant. Everybody can actually have a pony. Or, as we’ll see later this week, free tooth maintenance.

Meanwhile, MMT people who believe the natural rate of interest should be zero and that governments must spend whatever citizens need point to he Covid experience. In the last couple of pandemic years, Ottawa flooded society with cash, ran up an annual deficit shockingly higher than ever seen before, mushroomed the debt and was supported by a CB that took the cost of money almost to nothing.

That worked, they claim. We got through the crisis. People were protected through a storm. Nothing bad happened. We have more services and more government now to protect us. Why not continue to just create money and provide a better life for everyone? MMT works, baby.

But, not so fast.

A basic principle is that stuff gets cheaper when there’s more of it. That includes money. So currency can lose value when boodles more is created by the guys in charge of it, which is the central bank. With inflation going from nothing to almost 6% in a year or so, this may already be happening. Meanwhile lots of liquidity and cheap rates have distorted asset values. Just look what real estate costs now.

So MMT is inflationary. It creates permanent, structural government deficits. In the extreme, it can lead to currency destruction, as happened in Venezuela or Zimbabwe. That’s when simple inflation becomes hyperinflation and so much more money needs to be continuously created that people lose faith and turn to bartering, using foreign currency, crypto or hoarding physical assets. It’s a short hop then to social and political unrest.

Nah, stop being drama queens, the MMT crew retorts. If inflation gets squirrely, we just need to ramp up taxes a lot, suck liquidity out of the system for a while and regain equilibrium. The government can add as much money as it wants, then take as much away as required.

So, there you have it. Lunch can truly be free, but only for so long. Eventually society pays for what it craves now (but can’t afford) with higher inflation, more taxes and (maybe) revolution later.

Listen carefully on Thursday. We may cross the Rubicon.

About the picture: “I love your blog and read it almost every day,” writes Craig. “I have learned so much and can’t thank you enough! You have a unique talent of making finance interesting and easier to understand-no simple task. I see you are branching out from dog photos and am concerned about your photo supply so I am sending a few randoms from my animal photo collection. This is Freddy the Raven, who lives here on Whistler Mountain, B.C. He is an inspiration on survival and will be flying around in blizzards and 90km/hr winds seemingly right at home.”

141 comments ↓

#1 Bguy1 on 04.03.22 at 2:47 pm

Where did you hear or read about a universal basic income?

#2 Sail Away on 04.03.22 at 2:51 pm

Yes, crank that interest rate. The higher the better.

#3 paddy on 04.03.22 at 2:52 pm

The next few years are going to be interesting….then again thats what people have been saying for years, like the ones before me and when I’m gone, the ones after me. Pretty interesting time to be alive though, with technology and such. I’m still a young sprout and never thought I’de see the things I’ve seen. Looking forward to when I’m 80.

M38NS

#4 Sean on 04.03.22 at 2:56 pm

> so we end up with another triple-digit annual deficit.

When I was young that meant > 100 million deficit. This is total insanity!!!

I’m still incredulous that nominal interest rates will be meaningfully increased in 2022. Nominal 2-3% is nothing especially now that real inflation is over 10%.

The way things are going (search for German supermarket price hikes tomorrow), it doesn’t seem like a low single digit nominal interest rate will dissuade people from borrowing more to buy RE or whatever they can get their hands on, as long as they can finance it with 3-5% credit…

How such low and in deeply negative interest rates can bring a 10% inflation under control remains to be seen.

#5 Overheardyou on 04.03.22 at 3:10 pm

Since nearly 70% own their homes, maybe enough home owners noticed this MMT work on their homes. It’s essentially free money for them when the banks give out HELOCs without them even applying.

#6 PeterfromCalgary on 04.03.22 at 3:10 pm

“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Milton Friedman

#7 Summertime on 04.03.22 at 3:11 pm

That part about creating excess money by CB is fine.
Plenty of historical evidence for such.

And yet I fail to see a single case of withdrawal of these extra money, the seemingly ‘easy withdrawal of liquidity’ mentioned here. Not gonna happen.

Nothings is free, specially lunch. ‘Free’ is only the cheese in the mousetrap.

Rubicon/the point of no return was crossed in 2008-2009.

Equilibrium will surely be achieved. 10-15 years from now. At 4-6 times current prices of necessities and 4-5 million SFH in GTA/Vancouver.

#8 red falcon on 04.03.22 at 3:11 pm

MMT people are bozos, plain and simple. they didnt read up on the economy from then and before (think T1 before T2 who is almost parallel in their quest to increase debt forever!).

this is a bad situation gone worse, and we need to have growing income assets to adjust accordingly.

meow man do!

#9 HUNGRY BEAR on 04.03.22 at 3:15 pm

The dog with feathers and a beak…..

The most dangerous kind.

#10 Flop… on 04.03.22 at 3:17 pm

I don’t mind when a housing bubble is brewing.

You get a homemade coffee, or a home brew beer, and an overpriced house.

What’s not to like…

M47BC

///////////////////////////////////////////

“Federal Reserve issues warning over ‘signs of brewing US housing bubble.

The Federal Reserve Bank of Dallas is warning that there are signs of a brewing housing bubble. There are signs of a market tipping point based on a number of factors Dallas Fed economists considered.

According to Freddie Mac, mortgage rates for a 30-year fixed mortgage are higher than they have been since 2018.

“Mortgage rates continued moving upward in the face of rising inflation as well as the prospect of strong demand for goods and ongoing supply disruptions. Purchase demand has weakened modestly but has continued to outpace expectations. This is largely due to unmet demand from first-time homebuyers as well as a select few who had been waiting for rates to hit a cyclical low,” Freddie Mac said.”

https://www.newschannel5.com/news/federal-reserve-issues-warning-over-signs-of-brewing-us-housing-bubble

#11 sailedaway on 04.03.22 at 3:26 pm

How does one escape France? Sorry I meant le Canada

#12 Yukon Cornelius on 04.03.22 at 3:27 pm

You rock Garth!

#13 Love_The_Cottage on 04.03.22 at 3:27 pm

Just a thought but….perhaps they should pick electable leaders? from the start?
________
You can join the party and help elect the leaders, or sit on your ass and complain about it. It’s pretty clear you’ve already made your choice.

#14 cuke and tomato picker on 04.03.22 at 3:36 pm

I love the line “nobody gets elected by promising less”
51 one years ago to this date plus or minus a few days
I told my boss “WE GET ENOUGH SOCIALISM IN CANADA
WITHOUT VOTING FOR IT” and here we are.

#15 None on 04.03.22 at 3:37 pm

Whether i agree with it or not what you describe is not what MMT theory is.

It’s very clear that MMT is inflationary – it’s addressed by government needing to increase taxes in order to manage the money supply.

Sure you can make an argument of whether MMT is a good monetary approach or not considering the political environment of everything but again – what you describe is not MMT.

Remember – Capitalism: The worst economic system, except for all the others. Capitalism for many really sucks but at least it sort of works.

#16 Søren Angst on 04.03.22 at 3:38 pm

Luca Pacioli rolling in his grave at the

“Canada Method”.

#17 Observer on 04.03.22 at 3:38 pm

The CPC would be smart to realize that if they drop the MAGA shtick, pay more than just lip service to climate change, and focus their campaign on reigning in the insane public debt that the Liberals have incurred, they’d have a good shot at winning the next election. Of course they would need the right leader for that feat – certainly not cryptocoin fanatic, Freedom Convoy supporter Pierre Poilievre.

#18 AM in MN on 04.03.22 at 3:39 pm

The taxes will come, on anything that can’t be moved offshore, like residential real estate. I’ve been saying this for a while, I keep saying this.

Do really “own” your house? You certainly don’t “own” the land it sits on, read the fine print. It can be taxed to zero if the Government wants to.

Currency devaluation has never brought wealth to any nation that has done it, and it won’t to Canada.

Zimbabwe and Venezuela aren’t as good examples as Argentina and some others, where the population consistently votes for more devaluation.

Bitcoin is growing as an alternative, both as a place to store wealth and transfer it, without the ability of governments to confiscate it or stop its transfer. Garth has always gashed it largely because he doesn’t understand it.

It is also different from the others, as it is property as opposed to a security.

I don’t see the trend reversing, given the way and aging western world wants its free stuff. BTC offers a way for those who don’t wish to have their wealth all taken away by the 51%, which is probably why there isn’t as much moaning about it these days because those who would usually be moaning now have an easy outlet.

#19 crowdedelevatorfartz on 04.03.22 at 3:39 pm

“MMT adherents think this can do away with the need to finance public spending through taxation or borrowing by way of issuing bonds.”

++++

Until no one, in their right mind, will buy them…..
Zimbabwe and Venezuela come to mind.
These “leaders” will financially ruin Canada.

#20 Bill McCormick on 04.03.22 at 3:48 pm

Taxes, inflation or interest. Nobody rides for free.

#21 The joy of steerage on 04.03.22 at 3:54 pm

Doug said not to whine! Just embrace it… money is just bits on a screen now.

#22 Ponzius Pilatus on 04.03.22 at 4:08 pm

#131 Mark Rypen
People have a right to be upset about this, and have a right to be worried about the long term implications. These are real world issues, that over the long run, destroy countries
As is so often said in business, Culture eats strategy for breakfast. How is this any different for a nation?
———————————-
Well, that’s just the way the cookie crumbles.
As a nation moves up on Maslow’s hierarchy, she tends to become “softer”, more in touch with the right side of the brain, and indeed culture will eat strategy.
However, as Hegel’s dialect argues, this thesis will at one point give rise to an opposite antithesis, where strategy will eat culture for breakfast.
A good example is the Athens – Sparta rivalry.
Where “spartan” Sparta eventually prevailed.
But only after Athens created probably the greatest Western culture, ever, IMO.
In summary, you right wingers just have to wait your turn.
Nothing lasts forever.

#23 Hindsight on 04.03.22 at 4:09 pm

Woken up yet Garth ???

#24 pPrasseur on 04.03.22 at 4:20 pm

Paul Volcker era is long passed, that was another generation, a generation more responsible, more accountable, they would do the right thing however the cost, because it was the right thing to do.

Today, they (the current leftist establishment) are either completely oblivious to reality or at best just look for ways to kick the can down the road (to this end their imagination has no bounds), so yeah they will make noise about raising rates, but in the end they will end up just printing more money, util it all blows up is their faces.

Printing money kills productivity, a sure way to get poorer. Canada is one of the most indebted place on earth,

https://www.bloomberg.com/news/articles/2022-01-21/debt-strapped-canadians-brace-for-a-risky-rate-hiking-cycle

behind Japan, France and Greece (an industrial superpower and two Eurozone members). So you tell me how good our prospects are!

#25 Ponzius Pilatus on 04.03.22 at 4:27 pm

6 PeterfromCalgary on 04.03.22 at 3:10 pm
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Milton Friedman
————————-
Easy for Milton to say.
But how do you measure output reliably?
GDP, GNP, number of widgets produced?
To define inflation is like defining a financial recession and depression.
Who was it that said “ A recession is when my neighbour loses his job”, A depression is when I lose my job”.
It’s all relative.
Life is what you make it.
Or “Life is like a box of chocolate, you never know what you will get”.

#26 Dr V on 04.03.22 at 4:29 pm

“Modern Monetary Theory says, simply, government can create money so it can therefore spend whatever the people want, without consequence.” – Garth

MMT does not say this, and teaches that inflation is the consequence. There are only about 5 countries that can apply it to any degree. Canada is one of them.

Kelton’s book “The Deficit Myth” is a good read.

Firstly she tells how MMT is already employed in fiscal process. Can’t argue with her logic there.

Secondly, she describes how MMT would control the money supply, given the shortcomings of monetary policy. I found this point highly debatable.

Thirdly, she goes on the describe programs like a “job guarantee” which I do not see working at all.

I believe a key point is what the new money is spent on.
If it is infrastructure, there is at least a lasting value to it. Not so much for programs which only support consumer spending.

#27 Quintilian on 04.03.22 at 4:30 pm

Not at all Garth, most of us MMT fans don’t want a pony.

We know just how environmentally destructive it would be.

But resistance, as I told Crowdie, is futile.

MMT is the most effective way to offset the course towards feudalism and, but only coincidentally, a weapon we have to fight Crypto, given that successive Liberal and Conservative governments have neutered the central bankers.

You will thank us later.

#28 Linda on 04.03.22 at 4:33 pm

‘Freddy’ looks very debonair.

Thanks Garth for confirming that MMT is inflationary. It is also a pipe dream. IF Canada was their own sole supplier – in short, everything we purchased was produced in house, right here in Canada – we might be able to get away with the concept of a free lunch via MMT. However, we purchase goods as well as services from other nations. Hate to break it to the MMT crowd, but for some odd reason those nations want to be paid for the goods/services they supply. Further, they want said currency to be worth something. So if we did embrace the MMT, UBI, ponies for all philosophy with zero CB interest rates methinks the debt collectors from those countries would be demanding payment in their fiat currency. Our largest trading partner is still the USA. Given the current exchange rate, would be very costly to pay the debts owing. Plus if the USA demands payment in US dollars, you can bet other countries would too. So much for that ‘free’ lunch!

#29 Ponzius Pilatus on 04.03.22 at 4:33 pm

#12 Yukon Cornelius on 04.03.22 at 3:27 pm
You rock Garth!
———————-
Yukon Elvis, this you?
I miss you.

#30 Flop… on 04.03.22 at 4:33 pm

So after I show the most expensive countries to live in this year, Uncle Ponzie tells me you can’t eat the sunshine in the tropical countries.

Maybe they can munch on debt, then?

Barbados clocks in at 138%, debt to gdp ratio.

Bahamas is a third tier debtster like Canada, north of 100%, maybe it’s all those crop farmers getting the sun munchies on the Prairies.

Conveniently, places like Venezuela, Argentina and Afghanistan didn’t even bother try to cook any books.

Jamaica get deep into debt?

No Sir, she did it of her own accord…

M47BC

https://www.visualcapitalist.com/global-debt-to-gdp-ratio/

#31 Earlybird on 04.03.22 at 4:41 pm

Every country is doing this!
Would that not make it a wash in the big picture?
Would cranking output to 11 counter balance it all out?
Interesting times for sure…

#32 Søren Angst on 04.03.22 at 4:41 pm

Canada.

You have lost your way.

#33 Network Admin on 04.03.22 at 4:59 pm

Will you accept pictures of birds now in additions to dogs and cats?

#34 crossbordershopper on 04.03.22 at 5:05 pm

when your poor, money and taxes and inflation are a construct, not real. I know some people who are on disability and welfare, they dont have any money in there pocket, never have, everything is free, there apartment, the food bank, the bus. they are beyond money.
Regular people who go to work and live there lives live in a different universe. My 16 year old daughter thinks the same, she turns on the swith and the lights magically turn on, it always has, why would it stop, and the fridge has food in it, always has, she doesnt know anything other than food in the fridge when she opens it.
Reguarl people should take a page from our marginal people , they seem to have it right, others go to work and everything is free for everyone else, and until someone revolts, it wont change, the nominal prices might, the level of services might, but the general premise is there.
money for nothing and chicks for free from zz top is about right.
i am looking forward for the universal freeness, work for cash and collect free money from govt. the amount of cerb people living off the scam for 2 years is very high, i know lots people who loved covid, best thing ever, free money for 2 years and worked for cash just like they always did.

#35 Michael in-north-york on 04.03.22 at 5:05 pm

“This will be offset by (perhaps) $100 billion in new tax revenues”
===

I don’t mind, but how can that be done?

#36 Søren Angst on 04.03.22 at 5:06 pm

Off topic, if you will permit me Garth.

Minister François-Philippe Champagne on Bucha, Ukraine…

https://twitter.com/FP_Champagne/status/1510724019284283392

#37 Michael in-north-york on 04.03.22 at 5:11 pm

#27 Quintilian on 04.03.22 at 4:30 pm
MMT is the most effective way to offset the course towards feudalism and, but only coincidentally, a weapon we have to fight Crypto
===

MMT is the most effective way to return to the barter economy. Two loafs of bread for a pair of mittens.

#38 Bezengy on 04.03.22 at 5:12 pm

Just finished our taxes for wifey and I. Total obligation is a combined 13 percent for us on total income. I’m not sure who’s paying for all this but it’s not me, and I seriously doubt their projected tax revenue will come anywhere close to their estimates. Meanwhile I just bought a Vespa to ride when I’m down here visiting in Niagara. Thought about going back to work but seriously, how does that make sense?, better off to just go quietly amongst the masses, on my Vespa.

#39 Doug t on 04.03.22 at 5:14 pm

BOOM OR BUST BABY

#40 Alberta Ed on 04.03.22 at 5:25 pm

Maybe Chrystia will find a new career trying to flog junk Canada bonds.

#41 Philco on 04.03.22 at 5:29 pm

I mention this a while ago here.
All that free dough they CERB fans cheered will be paid back via inflation and then their poorer for it. Thats your free lunch.
Food problems are dead ahead.
Its a hard asset run.

And as far as our heatlth system and the waites for surgery were last.
This health expert states and studies show that its better if you die as its cheaper than treating you. Awsome T2 good thing no one noticed.

#42 Keith on 04.03.22 at 5:34 pm

Sadly in the last fifty years the middle class in Canada has taken it on the chin. You can blame the government if you like, or the business sector in turning this country into such a low income jurisdiction fully forty percent of the population pays no net income tax. Not as much as the U.K. or the U.S. but a staggering number of Canadians are dependent on government to keep their 200 dollar emergency fund afloat.

I plugged some numbers into an online calculator to check IHCTD9’s claims about the CCB. He isn’t lying, and anyone with three children or more is getting a lot of money. What a sad comment on the loss of real income and wealth that has gone on far longer than during Trudeau’s time in office. It was the eighties, and people like Mulroney, Reagan and Thatcher that said things like there is no society, although any employment counsellor will tell you you have to network to get a job.

Getting a job used to be the entry into not just adult life, but community membership. People who worked, bought a home, and started a family build community and society. They vote, they want law and order, safety and security. Workers have lost so much of what they used to have – if the job market won’t provide what people want and need they will turn to the government. Business leadership has made capitalism far less attractive for most workers, going back decades.

Canada is one of the last places on earth where so many should be demanding so much from government. It’s not just the government that made it that way, but no one is stepping up to take responsibility.

#43 Anselmo Soprano on 04.03.22 at 5:35 pm

Slippery slope fallacy, Garth.

#44 Søren Angst on 04.03.22 at 5:41 pm

#40 Alberta Ed

True.

Printed on soft Charmin paper in every Cdn lavatory with this written above dispenser:

Canadian Bond. Take one.

#45 millmech on 04.03.22 at 5:43 pm

#17 Observer
The CPC is smart to keep throwing the next couple of elections, once there is nothing left(lol) the people will put them in power, let T2 own this, too costly to pull out of this nose dive now.
I vote CPC until the last election but like the tractor guy said too much free stuff now, meds, dental a UBI now coming.
Why even work now as you get better benefits from the Liberals than you can get from an employer and just supplement your UBI by working for cash, living tax free with a huge house, it is truly a (non)workers paradise now.

#46 some guy on 04.03.22 at 5:45 pm

MMT might work if we were the only country on the planet…hopefully the world doesn’t realize that we are sucking up resources while not having much to offer everyone else.

#47 Flop… on 04.03.22 at 5:50 pm

Maybe, just maybe, we’re going about this MMT thing all wrong.

On this very blog it has been passed that the the most valuable thing is time, why would we bother manipulating money, then?

MMT, should really stand for Make More Time.

We already diddle with the clocks twice a year, people want to make daylight savings obsolete, we’ll see how that goes when in December you stumble out of your McMansion, in complete darkness, to take little Johnny and Jenny to school for a couple of months each year.

Why not try 28 hour days, we fidget with everything else?

32?

What would you do with your extra time?

4 more hours of moderating crap posts like this, Garth Turner would never champion this cause.

We got rid of pennies, the time version of this would be to discard seconds, slow down let’s enjoy life a bit more.

What’s that, you want to get rid of the five cent piece, righty-o, let me just get rid of the time equivalent, minutes, and the smallest time construct
I would have to worry about would be an hour.

Life would be a lot less stressful, when your dentist asks you how long you floss your teeth for you reply, an hour or so.

Buddies want to know how long you went in bed for with the girl you meet at the bar last night, same answer, just let them manipulate something we could all benefit from, which despite being absurd is why it will never happen.

I would be in favour until my overlords declare a standard work day is now 12 hours…

M47BC

#48 Dr V on 04.03.22 at 6:08 pm

38 Bezengy

“Just finished our taxes for wifey and I. Total obligation is a combined 13 percent for us on total income.”
——————————————————

Not sure if this is good, bad or just OK depending on your circumstances.

A young couple, each making $20/hr, will pay this rate in BC, assuming no other deductions

A retired couple, 65 y/o, both with some CPP/OAS, TFSAs and a $0.75-1M non-reg portfolio generating
eligible dividends will pay no tax on a similar income.

Sharing would be great but dont feel obligated. There are a bunch of us here doing our best to minimize tax.

#49 AM in MN on 04.03.22 at 6:11 pm

#34 crossbordershopper on 04.03.22 at 5:05 pm

money for nothing and chicks for free from zz top is about right.

——————————————————–

That was Dire Straits. Too much drugs in the ’80’s?

ZZ Top was the band of the Hells Angels, great concerts.

—————————————————

#17 Observer on 04.03.22 at 3:38 pm

“pay more than just lip service to climate change”

—————————————————–

I like it when Liberals try to give advice to Conservatives.

Unless you haven’t noticed the wars going on and the inflation, this is so yesterday. Same nonsense since the Earth Summit in Rio in ’92. All models and predictions have been wrong, and people still buying fuel to drive, fly, heat, cook and a myriad of industrial processes that make our lives magnitudes better than our pre-industrial ancestors had it.

People largely vote on emotion, not reality. That is how they vote “in support of climate change”, but keep consuming fuel and products based on petro-chemicals, because they can feel good with no cost.

When it hits them financially, and for some $2/L gas and 10% food inflation is hard, them sometimes they vote reality.

PP is making a good argument about banning oil imports from Saudi and Russia. May cause everyone East of Ontario to think about it a bit more. Laying down a marker here, big nit to the Irving family, of which the LPC is a branch of.

It’s all about messaging and communications, and the CPC (& other right leaning western world parties) haven’t done a good job lately. You will know it’s a real issue if people actually start changing their lives, which they haven’t done despite 30 years of non-stop fear mongering and fraud.

#50 Sail Away on 04.03.22 at 6:18 pm

#38 Bezengy on 04.03.22 at 5:12 pm

Just finished our taxes for wifey and I. Total obligation is a combined 13 percent for us on total income. I’m not sure who’s paying for all this but it’s not me

———-

It’s me.

Unfair, really.

#51 Concerned Citizen on 04.03.22 at 6:22 pm

MMT is somewhat like Keynesian economics. But like Keynesian economics, no one likes dropping the hammer when times are good.

At least Keynesian economics makes some sense. Have the government spend and/or cut taxes when times are rough, and cut back spending and/or raise taxes when times are good. We’re really good at the first part, and abysmal at the second.

MMT, on the other hand, has never made sense to me. Ultimately the health of an economy is based on its underlying productivity. You can print money to give everyone a pony, but unless the productive capacity exists to provide everyone said pony, it’s not going to happen. All that will happen is that you’ll have more money chasing the same number of goods, leading to inflation.

This country desperately needs to increase its productivity, and we need measures that see workers keep a greater share of increasing productivity (instead of being hoovered up the top 1% as it has for the last couple decades). From what I have seen of this incarnation of the Liberals and NDP, I doubt productivity has even crossed their minds. We’re in real trouble.

#52 Steven on 04.03.22 at 6:31 pm

DELETED

#53 Dogman01 on 04.03.22 at 6:38 pm

#117 IHCTD9 on 04.03.22 at 10:54 am

Years ago, commuting to work on the Bus, I got to know an older lady whom took the same route, she made a comment to me one day.

“I am likely the wealthiest person on this bus, but I pay the lowest fare”

#54 Barb on 04.03.22 at 6:43 pm

I have no link to support this: the barter system is gaining ground; perhaps people are worried about coming tax increases?

Heard 3 examples of it this week.

#55 CJohnC on 04.03.22 at 6:47 pm

A recent article bu Michael Petits a well known economist on how excessive debt hurts an economy.

https://carnegieendowment.org/chinafinancialmarkets/86397

#56 AK on 04.03.22 at 7:01 pm

“and (maybe) revolution later.”
====================================

Or, 5 sleeps away. :-)

#57 Damifino on 04.03.22 at 7:04 pm

#17 Observer

The CPC would be smart to realize that if they drop the MAGA shtick, pay more than just lip service to climate change, and focus their campaign on reigning in the insane public debt that the Liberals have incurred, they’d have a good shot at winning the next election.
———————————–

I mostly agree. Except about the lip service to climate change. Lip service is just about the right level of response to the merchants of catastrophe.

For the realist, who understands fossil fuels will be with us for a very long time (before nuclear energy subsequently becomes ubiquitous) we need to bring some clear thinking to the table. The pipe dream of wind & solar simply will not cut it. Ask the Germans. Can nuclear can effectively fill the void? Ask the French.

Poilievre supports forms of energy that actually work today, and without which, humanity would be in deep and immediate misery. And to all the pipeline chokers and LNG haters who’d rather we purchase hydrocarbons from rogue states, his message is: Time to get real.

Re Crypto: On this Poilievre has also been clear. He would force no one to use it. He’s stated for the record many times people should be free to use whatever form of payment they choose. And regardless of what they choose, they are still subject to all laws, taxes and regulations.

Crypto does not (or should not) offer a special license to cheat. What it does best is supply a currency that’s not inflatable. However, it’s backed by nothing, and at the current time is very volatile. As such, it’s obviously not for everyone. That’s why it should be left up to the individual to choose. Pierre knows that and has said so.

Stop building a straw man and go listen more carefully.

#58 Quintilian on 04.03.22 at 7:12 pm

#47 Flop… on 04.03.22 at 5:50 pm

“MMT, should really stand for Make More Time.”

Actually, it does, and instead of redistributing “stuff” it redistributes time.

Poor people don’t have much money but a lot of time, rich stock brokers have a lot of money, but little time.
Therefore, there is a trade off between having money and being time affluent.

MMT will make it clearer and easier to choose.

#59 tkid on 04.03.22 at 7:15 pm

German grocery store prices going up 20-50% overnight:
https://invesbrain.com/german-retailers-to-increase-food-prices-by-20-50-on-monday/

This includes Aldi’s, a German chain that also operates in the US.

#60 Nonplused on 04.03.22 at 7:15 pm

Buy all the things.

We don’t have a prime minister or a finance minister in this country. We have an actor who is pretending to be prime minister of a country that doesn’t exist and deal with problems that don’t matter. That’s why this government seems so surreal. We are busy passing laws about diversity and inclusion when we already live in a country where those things are hardly a problem. We are mandating pinwheels, solar panels and electric cars when those things aren’t even made here and they don’t work. In short Trudeau is an actor performing in a play that has little to do with the real world Canada. The real world Canada is being left ungoverned.

Freeland on the other hand is a journalist. There is no indication she has the slightest indication of what MMT is or is not, or any of the other economic theories. She’s just an ideological child who got hold of her father’s credit card. I’m surprised she doesn’t dye her hair.

Anyway, if inflation can go from 1% to 6% in a year, it can go from 6% to 36% in a year. I say again, buy all the things.

#61 Sam on 04.03.22 at 7:22 pm

40 year mortgage coming. Garth will not say that.

#62 Old Boot on 04.03.22 at 7:29 pm

#52 looks like an assassination threat

#63 Reality is stark on 04.03.22 at 7:33 pm

T1 allowed the bond vigilantes into the house and now T2 is welcoming them back.
They operate similarly to the mob.
You won’t like them and they don’t care.
They are unelected but they will run the joint and they aren’t very nice.
Bottom line is you may be paying 13% for your mortgage while your USA cousin pays 7%. It’s usually at that point when Canadians stop criticizing Americans for being stupid.
Here we go again. One more ride on the carousel.

#64 baloney Sandwitch on 04.03.22 at 7:35 pm

Debt only becomes a problem if you borrow from foreigners in currency other than your own. Otherwise you just inflate and tax your way to other side. Think of good teeth as infrastructure. A strong Nation cannot be built on rotten teeth? $10 childcare means more moms can work in the salt mines and pay tax. There is a black lining to every silver cloud.

#65 Sail Away on 04.03.22 at 7:40 pm

#52 Steven on 04.03.22 at 6:31 pm

If I had a month to live, I’d gladly sacrifice to wake up our country from what’s coming.

Amazed no one else hasn’t yet.

And it only takes one.

———

One what? One cream pie? You don’t need to be terminal- maybe a fine or a few days in lockup at most.

https://youtu.be/Tz6h7HxzIv0

#66 Tom on 04.03.22 at 7:47 pm

“Conservatives worry about this. Libs and Dippers do not.”

Um no, Conservatives also don’t worry about this.

#67 Sail Away on 04.03.22 at 8:05 pm

#59 tkid on 04.03.22 at 7:15 pm

German grocery store prices going up 20-50% overnight:
https://invesbrain.com/german-retailers-to-increase-food-prices-by-20-50-on-monday/

This includes Aldi’s, a German chain that also operates in the US.

———–

Let me fix that:

“This includes Aldi’s, a German grocery store that also operated in the US… until they raised rates 20-50% more than other neighbouring grocery stores and received a valuable lesson in capitalism.”

#68 Phylis on 04.03.22 at 8:11 pm

#44 Søren Angst on 04.03.22 at 5:41 pm
#40 Alberta Ed

True.

Printed on soft Charmin paper in every Cdn lavatory with this written above dispenser:

Canadian Bond. Take one.
Xxxxxxxx
What did it say on the hand dryer? Political promises?

#69 tkid on 04.03.22 at 8:13 pm

So, #67, denial isn’t just a river in Egypt with you, eh?

#70 IHCTD9 on 04.03.22 at 8:14 pm

I can’t see MMT working. They’ll just tax the excess back out of the system? So easy! Good luck with that. You’ll need an army of agents and years to collect.

They’ll have to really hammer the working population to pull anything significant out of them. Then it’d be good-bye at the very next election.

#71 Bronze Bullet on 04.03.22 at 8:14 pm

#59 tkid on 04.03.22 at 7:15 pm
German grocery store prices going up 20-50% overnight:

——————————–

Food prices are global.

You will never read such an article here, we have no inflation apparently. The traditional solution to a problem here is the refusal to acknowledge it’s existence.

The important part is not to worry, be calm, BoC has your back and all the tools to fight inflation, they will even increase the rates by the ‘huge’ 0.5 % to 1 % on their next meeting, way down the road.

Rates can not and will not increase above 2-2.5 % in this cycle no matter how high is the inflation.

Food prices are already becoming outrageous.

#72 CJohnC on 04.03.22 at 8:27 pm

Related to the previous article from Michael Pettis on understanding MMT and why debt matters, is this article from Michael Pettis:
https://carnegieendowment.org/chinafinancialmarkets/85179

Both are long reads but useful if you want to try and get a handle on the current financial goings on.

#73 Rochdale GM on 04.03.22 at 8:35 pm

If I don’t hear the word *renters* on Thursday, I’ll vote for Poilievre, even if it’s only out of spite.

#74 crowdedelevatorfartz on 04.03.22 at 8:45 pm

@#59 tkid

German grocery store prices going up 20-50% overnight:
https://invesbrain.com/german-retailers-to-increase-food-prices-by-20-50-on-monday/

+++
It won’t just be Germany raising food prices.
North American grains, meats, etc will be snapped up on the wolrd wide market and we will all pay much higher prices.

Lets see how the MMT kids in Ottawa handle screaming angry voters in about 6-12 months.
Gas, food, rent, bank loans….all uppa uppa uppa, and they won’t be able to do a damn thing about it.

Election 2025 ?
Not if the Libs and Dippers are tanking in the polls waaaay before that and the NDP political rats bail from the Good Ship Logic Stop

#75 Bruce Edmond on 04.03.22 at 8:55 pm

I lived in New Zealand in early 80’s. The country had been living way above its means by borrowing, ie spending more money than they had coming in. Top marginal tax rate hit 66% at which point I left and moved to Canada, as did many others, mostly to Australia. But it was really painful in NZ. They didn’t go through a recession, they had a depression. NZ dollar had a long painful drop for the next 15 years, bottoming out at 38 cents against the US$ in ~1999/2000. (It was 1.35 against the US$ in the 70’s). They had to make very drastic cuts in govt spending, on health care, education, everything! They didn’t have any other choice. I see similarities in Canada now. I don’t think it going to be pretty.

#76 fishman on 04.03.22 at 8:56 pm

Economystic, where are you? I was one of your first adherents. ” A free lunch for everybody & nobody working in the kitchen”. The global expat Bandera leader, double dipping as our Canadian Finance Minister is going to deliver. Her party needs an immediate 10k volunteers for the CF. The new enlistment slogan is ” Enlist in the Canadian Forces & nobody has to fight a war.”

#77 Arctic Gringo: Qalunaaq on 04.03.22 at 9:10 pm

Deeply discounted rates and increased data allotment for for those receiving maximum CCB and GIS:

https://www.cbc.ca/news/politics/government-high-speed-internet-low-income-1.6407008

I’m all for this initiative for those on GIS, but when I can count on all ten fingers and ten toes (multiple times over) the number of families I know whom receive maximum CCB and earn beyond a livable income all under the table suggests to me to give my 2-week notice, retire early, and go work for cash only and RRSP withdrawals under tax exemption level.

No motivation to better myself nor do so for, or instill to my children knowing the government will spoon feed from cradle to grave.

#78 T-Rev on 04.03.22 at 9:14 pm

Revolution?? In a democracy??? Say it ain’t so. When we have the option for peaceful “revolution” every four years, and yet never seem to exercise it, I’m not sure the majority of Canadians have the stomach for anything but a life of government cheese. What should the 35-40% (and dropping) do? Shoot our way out? I think what you’ll see is simply a Greek state- anyone young with talent will leave, the government will be crushed under the burden of debt payments and public obligations, possibly default, program spending will fall overall and be concentrated in pensions and health spending. We’ll become a country of no opportunities and few young people. And we’ll wonder how we got there.

#79 Ponzius Pilatus on 04.03.22 at 9:22 pm

67 Sail Away on 04.03.22 at 8:05 pm
#59 tkid on 04.03.22 at 7:15 pm
German grocery store prices going up 20-50% overnight:
https://invesbrain.com/german-retailers-to-increase-food-prices-by-20-50-on-monday/
This includes Aldi’s, a German chain that also operates in the US.
———–
Let me fix that:
“This includes Aldi’s, a German grocery store that also operated in the US… until they raised rates 20-50% more than other neighbouring grocery stores and received a valuable lesson in capitalism.”
———————-
No, let ME fix that for you:

Why Walmart Failed In Germany
In
1997, Wal-Mart had entered in the German retail market through acquiring the failing German retail chain Wertkauf but quickly encountered problems. Wal-Mart had demonstrated phenomenal success in the US by providing an Every Day Low Prices Guarantee, inventory control, and efficient distribution.
Walmart failed the endeavor because they attempted to apply their proven US success formula in an unmodified manner to the German market, and through the process, they failed to offer German customers any compelling value proposition in comparison with its local competitors.
Their Main competitor in Germany WAS Aldi

#80 Alan Greenspan on 04.03.22 at 9:22 pm

The free lunch has still to be invented.

#81 Bitcoin Bro on 04.03.22 at 9:23 pm

The thing I love about “Modern Monetary Theory” is there’s absolutely nothing modern about it all.

Devaluing the currency to pay for increasingly bloated debts is the oldest trick in the book. The lame and lazy attempt to brand it otherwise makes me laugh
most days… others it gives me the Orwellian chills (“War is Peace”)

Thankfully, there’s a fundamentally deflationary monetary technology that’s emerged over the last decade…

#82 Proud CERBian on 04.03.22 at 9:25 pm

CERBians and UBIans.

We are one nation together.

The NEW CANADA!

#83 crowdedelevatorfartz on 04.03.22 at 9:25 pm

@#75 Bruce Edwards.

” But it was really painful in NZ. They didn’t go through a recession, they had a depression. NZ dollar had a long painful drop for the next 15 years, bottoming out at 38 cents against the US$ in ~1999/2000. ”

++++
Yep.
I fully expect something similar when the financial Merry Go Round of debt spending in Ottawa finally stops.

WE will ALL pay the price for the Trudeau govts’ financial immaturity… for decades.

And they will walk off into the sunset with full MP pensions and with the arrogant smug attitudes of the self righteous.

#84 Philco on 04.03.22 at 9:29 pm

#60 Nonplused on 04.03.22 at 7:15 pm
===============
LOL yup.
But I cant make fun of them or Garth deletes me but we can trash talk’em. I’ant a fan at all obvouisly.
You bet bro I dumped all my cash the last while into REAL stuff…
Its all worth way more loot.

Garth you dropped my link. People should educate yourself on how bad our medical system is….unless your someone IMPOTENT. I guess I gots more work to do. :-)

#85 crowdedelevatorfartz on 04.03.22 at 9:30 pm

@#73 Rochdale GM
“If I don’t hear the word *renters* on Thursday, I’ll vote for Poilievre, even if it’s only out of spite.”
++++

“Renting” is so far below Trudeau’s radar it doesn’t even compute.
Hundreds of thousands of renting voters are ignored by all levels of govt.
The large REITs and institutional Landlords have seen to that with political campaign contributions.

#86 When Will They Raise Rates? on 04.03.22 at 9:56 pm

So MMT is inflationary. It creates permanent, structural government deficits. In the extreme, it can lead to currency destruction, as happened in Venezuela or Zimbabwe. That’s when simple inflation becomes hyperinflation and so much more money needs to be continuously created

Who cares, everyone will be a millionaire!

https://mobile.twitter.com/Adventure_Nero/status/1510656776303169536?cxt=HHwWgMCykbKV9_YpAAAA

#87 BillyBob on 04.03.22 at 10:04 pm

#76 fishman on 04.03.22 at 8:56 pm
Economystic, where are you? I was one of your first adherents. ” A free lunch for everybody & nobody working in the kitchen”. The global expat Bandera leader, double dipping as our Canadian Finance Minister is going to deliver. Her party needs an immediate 10k volunteers for the CF. The new enlistment slogan is ” Enlist in the Canadian Forces & nobody has to fight a war.”

============================================

I was absolutely thinking the same thing: where is Economystic?

His/her/them’s time has come. The absurd has become Trudeau’s reality.

Maybe that’s why they’re silent. A joke like Canada isn’t quite as funny once it becomes true.

#88 Ponzius Pilatus on 04.03.22 at 10:17 pm

Not good news for Zelensky!
Hungarian Rightwing President and close ally of Putin appears to have won another land slide victory.

#89 Doug in London on 04.03.22 at 10:31 pm

Government creating more and more money to pay for all this reckless spending. Sounds a lot like Germany 100 years ago when doing the same thing caused hyperinflation.

#90 HUNGRY BEAR on 04.03.22 at 10:40 pm

“And extra billions for reconciliation, now that the Pope did his thing.”

You must think the way European settlers who came to Canada and treated and handled the Native people of Canada was a joke?

Residential schooling was a genocide and a purge of the Native people and their culture.

SHAME

Stand down. I passed zero judgment. – Garth

#91 Sail Away on 04.03.22 at 10:46 pm

Re: Walmart Germany failure

I have it on good authority that Walmart failed in Germany due to the smiley faces on the uniforms. This previously-unknown facial expression caused great consternation among the German peoples.

#92 Philco on 04.03.22 at 10:48 pm

#85 crowdedelevatorfartz on 04.03.22 at 9:30 pm
@#73 Rochdale GM
“If I don’t hear the word *renters* on Thursday, I’ll vote for Poilievre, even if it’s only out of spite.”
++++
“Renting” is so far below Trudeau’s radar it doesn’t even compute.
Hundreds of thousands of renting voters are ignored by all levels of govt.
The large REITs and institutional Landlords have seen to that with political campaign contributions.
=================
Why? What do renters need?

#93 Philco on 04.03.22 at 10:50 pm

Renters have way more rights then landlords.
My rents are so far behind my op cost rising its not even funny.

#94 Grunt on 04.03.22 at 11:15 pm

At the edge of the Rubicon men don’t go fishing.

We need the old Quebec gang and a fallen US president.

#95 Calvin Stonebear on 04.03.22 at 11:58 pm

Hmmm…the average interest rate since 1972 was above 8%. Housing in the US is 4.2% for 30 years. How does the MMT crowd explain doubling debt every 5 years? Once we get to 100% taxation the $C goes to zero.

I’m struggling with the numbers of Canadians who can’t find hospital space for life saving surgeries while revenue for new hospitals is being strangled. If you have tumors, cardiac or brain issues, you’re screwed. An eminent doctor recently said that diagnosing illness is overwhelming the system, and that people should stop wanting to extend their lives and “ pass from natural causes”, which I suppose he means undiagnosed illness. But, and this will make your Liberal bones burn, we’re importing cancer patients from the third world, for immediate treatment, including Ukraine, humanitarian for them, not treatment for us?

Killing energy revenue means no new hospitals or equipment. Did you know the waiting list for a CT scan is over a year even if you’re critical?

#96 Ponzius Pilatus on 04.04.22 at 12:04 am

#91 Sail Away on 04.03.22 at 10:46 pm
Re: Walmart Germany failure

I have it on good authority that Walmart failed in Germany due to the smiley faces on the uniforms. This previously-unknown facial expression caused great consternation among the German peoples.
————————
Walmart showed the same ignorance and arrogance as the French did when they tried to wean the Americans off American cheese.
And yes, Europeans expect quality of goods and efficiency of service.
Not phoney smiles.

#97 Outrage on 04.04.22 at 12:38 am

Everyone needs an escape plan. We all know that. The Japan playbook has been in practice for years in Canada.
You get what you voted for so you’ll pay the piper bigtime. I have a friend just got a partial furnished 2 bedroom apartment in PV for 3000 pesos or $194 a month. Work online or take your money and get the hell out of dodge. Life is done unless your a single mother with a few kids on welfare.

#98 Satori on 04.04.22 at 1:09 am

Free dental, healthcare, internet and what is next? Hell why not add in free botox, facelifts, liposuctions and fillers.

Yup our government takes care of you cradle to grave, so why work?

#99 Robert Ash on 04.04.22 at 2:19 am

Two centuries ago, a somewhat obscure Scotsman named Tytler made this profound observation: “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.

#100 Robert Ash on 04.04.22 at 3:24 am

The Bank of Canada, at the end of January owned about 43% of all Canadian Bonds… If people think that this is OK, try an Analogy.
1) A company manufactures Lawn chairs, but there are no customers for all of it’s inventory of chairs. In order to keep the production line operating, the Staff of the Company must purchase that extra 43% to meet their Financial targets, and service their debt… How long can any Company survive if there are no customers, to purchase their products. How long does the price for the Lawn chairs keep at current levels, when the Company can only sell, part of it’s production. The answer depends, on the accumulated Savings, of the Company staff… Inevitably this means, the Company will Bankrupt itself, or reduce the price of the Lawn chairs, and not gain the revenue needed to keep the lights on…

#101 under the radar on 04.04.22 at 5:13 am

93 “Renters have way more rights then landlords.
My rents are so far behind my op cost rising its not even funny.”
Hence another couple of reasons why we are exiting purpose built rentals. 1st round of bids closes end of April.

As for MMT, Free lunches are never free.

#102 Tron on 04.04.22 at 5:23 am

certainly the supply side shocks re the unwinding of the global value chain during the pandemic (and now the energy price spike) have contributed to inflation as well. Does Trudeau’s fiscal policy also contribute to Germany’s or the US inflation? That the inflation is globalized indicates a structural, not a strictly Canadian policy problem.
Firms with privileged positions have also been taking the opportunity to gouge consumers on durable goods.
Though I don’t necessarily disagree with this post, I don’t think it is true either that this inflation proves “MMT” (or more moderate versions) wrong.

#103 Bezengy on 04.04.22 at 5:43 am

Sure, after all we’re all friends here. I have nothing to hide and report all income. Personally I think all income tax information should be made public, like Norway does.

Nothing special in this year’s taxes for us. No DB pension income, no gov checks, and we play by the rules. Income high eighties, almost half in cap gains from our energy investments, lots of cdn divvy income, and we do our best to spilt it. Also claimed about 10k in CNIL losses from our energy investments from previous years. All the financial information anyone needs is right here in this blog for free from four of the best financial experts in the business, and I do my best to follow them. I do have my biases, no one’s perfect after all.

#104 TurnerNation on 04.04.22 at 6:56 am

This weblog must move even further ‘right’. For the sake for the nation. Scatter those lefties back to their safe spaces. With an ardent focus on Bike, Babes, and Balanced Portfolios.

—-

Isn’t UBI just another theory peddled by the unhinged disinformation merchants in this steerage section?



Are these figures reported in the immigration stats?
On balance how many get permission to stay living here and working after graduation?
Shall we toss another 500k-1 million people into our underfunded health care system?

https://monitor.icef.com/2021/10/canadian-immigration-reports-surge-in-study-permit-applications-in-2021/
Canadian immigration reports surge in study permit applications in 2021
IRCC reports more than 730,000 new student permit applications through August 2021, a roughly 27% increase over the same period from 2019. More than half of the total volume of applications year-to-date were filed between January and May this year.

#105 TurnerNation on 04.04.22 at 7:18 am

Double digit Food inflation? Yep just another day in the Former First World Countries.
March 2020 was designed to kill the middle class.
So far going very well. Hey we are almost back to normal right?

The Middle Class was a marketing experiment rolled out post-WW2 to keep the peace. Tie up the free time of the fighting age men with drugs, low grade processed foods, worthless expensive ‘education’, video games, easy credit access, TeeVee, sports, music, Pop culture, advertising, online Pr0n. On demand 24/7/365.
This will ensure no more revolutions and a passive herd of sheeple.

Some say that a mortgage is a loan secured against your income, not only your home asset.
If this income gets eaten up with inflation then what.



Watch that food supply.

“Metro Ontario Inc. has regretted the decision made by its full-time distribution centre unionized employees represented by Unifor Local 414 to reject the company’s proposal and to go on strike…
With annual sales of $18 billion, METRO Inc. is a food and pharmacy leader in Quebec and Ontario. (stockwatch.com)

#106 Ponzius Pilatus on 04.04.22 at 8:33 am

#93 Philco on 04.03.22 at 10:50 pm
Renters have way more rights then landlords.
My rents are so far behind my op cost rising its not even funny.
————————-
I think you got the renters you deserve.
It’s Karma.

#107 crowdedelevatorfartz on 04.04.22 at 8:34 am

@#92 Philco
“Why? What do renters need?”

+++
Well since vacancy rates are at an all time low and rents are at all time highs….

More rental options?

But you just keep supporting the tax incentives for builders and investors of condos., the sale of personal homes, etc.
Renters can go sleep under a bridge

#108 crowdedelevatorfartz on 04.04.22 at 8:40 am

@#93 Fill co
“My rents are so far behind my op cost rising its not even funny.”

+++
Boo Hoo.
If its a money loser and so much of a hedache…

Then sell your rental property.
Last time I heard.
Real estate prices were still up…..but not for long.
:)

#109 crowdedelevatorfartz on 04.04.22 at 8:43 am

@#90 Hungry Bear
“Residential schooling was a genocide and a purge of the Native people and their culture.”
+++

So how much is enough to appease the historical wrongs of our long dead ancestors?
$10 Billion?
$100 Billion?
$1 Trillion?
Taxpayers wanna know theres an eventual end to it.

#110 Prince Polo on 04.04.22 at 8:50 am

Wealth tax proposal

I have so many questions about the White House’s new plan for a wealth tax. What assets will it apply to? How will wealth be measured, and who will do it? Do you get credit when you take a loss? And why is it called a billionaires’ tax when it applies to anyone with $100 million?

And what’s up with the White House when it comes to economic policy? I doubt this plan will go anywhere, even if they are counting on $360 billion in revenue from it. Trying to tax the rich is good politics, I guess. But is it good economics, is arousing more populism good for society? So many questions, and no good answers, probably because none exist.

https://allisonschrager.substack.com/p/scaling-up-the-madness?s=r

#111 crowdedelevatorfartz on 04.04.22 at 8:58 am

@#104 TurnerNation
“IRCC reports more than 730,000 new student permit applications through August 2021, a roughly 27% increase over the same period from 2019. ”

+++
Yep.
Student Visas are the back door.
Immigration of all types has been far higher than official stats.
For years.

#112 Ponzius Pilatus on 04.04.22 at 8:58 am

Oligarch Musk is making a move on Twitter.
3 billion is chump change for him.
He’s on a mission.
President?
Over to you Sailo.

#113 Ken Yakazuna on 04.04.22 at 9:18 am

#112 Ponzi. Musk said he is buying a say in Twitter to protect free speech, so that whoever does run for president isn’t cancelled or banned or muzzled by arbitrary twisted woke ideologues who support the extreme left as we saw happen in the last election.

#114 Ponzius Pilatus on 04.04.22 at 9:46 am

Correction.
Just remembered.
Musk can’t run.
Neither can Arnie.

#115 Sail Away on 04.04.22 at 10:01 am

#112 Ponzius Pilatus on 04.04.22 at 8:58 am

Oligarch Musk is making a move on Twitter.
3 billion is chump change for him.
He’s on a mission.
President?
Over to you Sailo.

——-

Well, having just spent $6B to solve world hunger, $3B must be the number Elon calculated as necessary to fix social media.

Plus record Tesla deliveries in Q1. Wow. Earnings and stock moves will be bananas. https://electrek.co/web-stories/tesla-beats-all-time-delivery-record-with-310000-evs-despite-difficult-quarter/

Oh, and record SpaceX launches as well. An embarassment of records: https://labusinessjournal.com/aerospace-2/spacex-shooting-for-launch-record/

#116 Dharma Bum on 04.04.22 at 10:05 am

#34 crossbordershopper

I know some people who are on disability and welfare, they don’t have any money in their pocket, never have, everything is free, their apartment, the food bank, the bus. They are beyond money.
———————————————————————————————————

Truer words were never spoken.

https://www.youtube.com/watch?v=0QCBBDDd3AM

#117 XEQT and Chill on 04.04.22 at 10:24 am

Chrystia Freeland has already stated in the HoC she doesn’t believe in MMT.

Nice try, Garth.

Deeds speak. – Garth

#118 IHCTD9 on 04.04.22 at 10:33 am

#111 crowdedelevatorfartz on 04.04.22 at 8:58 am
@#104 TurnerNation
“IRCC reports more than 730,000 new student permit applications through August 2021, a roughly 27% increase over the same period from 2019. ”

+++
Yep.
Student Visas are the back door.
Immigration of all types has been far higher than official stats.
For years.
___

Private Colleges in Quebec…

https://www.cbc.ca/news/canada/montreal/quebec-india-colleges-foreign-students-creditor-protection-1.6309575

This whole diploma mill thing that has developed in Canada is a disgrace. But even the public colleges and universities are essentially already hooked on international student $$ too. 3-4X the tuition payments.

#119 IHCTD9 on 04.04.22 at 10:45 am

#109 crowdedelevatorfartz on 04.04.22 at 8:43 am
@#90 Hungry Bear
“Residential schooling was a genocide and a purge of the Native people and their culture.”
+++

So how much is enough to appease the historical wrongs of our long dead ancestors?
$10 Billion?
$100 Billion?
$1 Trillion?
Taxpayers wanna know theres an eventual end to it.
_______

That’s the problem with this kind of deal. Billions go up in smoke, and absolutely nothing changes.

#120 IHCTD9 on 04.04.22 at 10:48 am

#105 TurnerNation on 04.04.22 at 7:18 am

Watch that food supply.

“Metro Ontario Inc. has regretted the decision made by its full-time distribution centre unionized employees represented by Unifor Local 414 to reject the company’s proposal and to go on strike…
___

These guys already have the highest prices in town…

#121 Crystal ball futurist on 04.04.22 at 11:15 am

Our two kings J&J will get a lot of pointers from today’s post.
Enjoy all the free stuff till it lasts but do protect your assets. Not sure how to do that when the Govt can freeze your assets as proven recently.
Welcome to the age of stupid.

#122 Baxter on 04.04.22 at 11:18 am

There is no such thing as a free lunch. Canadians voted for this, and they should get it good and hard. I have stopped caring. Only a massive financial crisis can rock Canadians out of their slumber.

#123 Philco on 04.04.22 at 11:31 am

#106 Ponzius Pilatus on 04.04.22 at 8:33 am
#107 crowdedelevatorfartz on 04.04.22 at 8:34 am
================
Haha
You blame the landlods thats funny.
Building costs, taxes and permit roadblocks prevent rentals from beging built at a reasonable price.
And ya certainly dont have a clue what renters I have.
I just dont blame lanlords. Blame policy of gov ya funny guys.
Ok
So 95% commercial are my units. I make the rules.
And unless companies like Telus go under ill survive a depression because I planned ahead and have no debt.
Mini storage I lve owned since 1990 and just purchased 2 more buildings (cash) because Im always full.
No rent controls there and my corp taxes are 1/2.
Residential is a no go for a variety of reasons.
So the few Res Rentals I got no problems.
I dont ever worry about RE downturns.
I never sell cash turns into trash….no rightoffs ect ect.
Its a war against the gov but in fact we pay a ton of tax an no Ive personally never received 5cents in gov incentives. So ya can nip that one in the bud, bud.
Well so boo hoo to the Res renters. Inflation and policies are hurting them big time.
T2 has been fixing that didnt yas hear?

#124 Pprasseur on 04.04.22 at 11:38 am

The Bank of Canada, at the end of January owned about 43% of all Canadian Bonds…

That’s MMT, the Magic Money Tree!

#125 Philco on 04.04.22 at 11:50 am

Some people act like the government does.
Whenever theres a cyclical boom in any sector. The govs coming for their fair share. After all their your silent partner right?
Perfect example is the mining sector. Have difficulty for years….then boom a bull cycle.
Well no one was interested in it because they were scraping or going banckrupt in the bear. Poof there they are….the gov looking for their fair share in taxes, royalties ect….
Makes sence they suffered, risked 100s millions in capital over the years in carefull investment, exploration while following a 1000 environmental laws that cost a ton of money.
Now….Just like the RE boom….now everyone that did nothing wants their fair share.
And Goverment attacking it at 25 angles exacerbating affordability problems while preaching that your their saviour.

#126 Ustabe on 04.04.22 at 11:56 am

My wife: “What are you reading?”

Me: “Five pounds of assumption and speculation in a one pound bag.”

#127 morrey on 04.04.22 at 12:14 pm

MMT is not exclusively a Made in Canada Policy:

Modern Monetary Theory (MMT) is an economic theory that suggests that the government could simply create more money without consequence as it’s the issuer of the currency, according to the Federal Reserve Bank of Richmond. As part of this theory, the thinking is that government deficits and national debt don’t matter nearly as much as we think they do.

The USA is also into it.
https://www.businessinsider.com/modern-monetary-theory

#128 Philco on 04.04.22 at 12:17 pm

Garths and company get ALOT of stuff correct.
Im a do it yourselfer.
So since 1989 I’ve been buying and renovating my properties.
Way before it was a thing on bubble tv.
Last year I was logging this year prepping my land and errecting my own buildings saving a ton of money.
I dont get into lines or bidding wars to buy stuff.
I Worked 7 days a week forever wrecking my back at times.
Boo hoo I made it myself from NOTHING.

Ive got the greatest neighbours 72 yrs old he still drives truck. They have minimal income. Inflation moving againts them. They dont get raises. No sitting on blogs belly aching from them. Happy and 20 years older than I one of my best friends. He works for me also. A class act.

Everyone has opportunities STILL.
Investing correctly avoid dumb stuff, keep looking for what you need rather than complaining what ya dont have. You will be happier.
I planned way ahead…busted my ass took risks and my hits. No gaurentees from the management though.

#129 Philco on 04.04.22 at 12:21 pm

PS who do the renters complain about high food and gas prices???
Lanlords……hmmmm

#130 John on 04.04.22 at 12:25 pm

I think the one thing you’re missing on MMT (and likely Freeland as well) is that there are theoretical maximums to government spending in the MMT view of macroeconomics. Here goes:

Inflation is caused due to tight labour markets. When government spending leads to unsustainably low unemployment rates, inflation increases. The MMT economists would argue this is when you stop spending to not get into an inflation spiral. Unfortunately Freeland doesn’t understand this constraint and thinks MMT just means ‘spend, spend, spend’. And opponents to MMT see this as an easy out to argue against it. I think MMT is a very interesting take on macroeconomics and public finance but it needs to be applied and interpreted correctly. Both by its proponents and its detractors. It’s better to learn about MMT from the actual economists that practice it (Wray, Mosler, Mitchell, and to a lesser extent Kelton) than to assume what Bernie and Chrystia are telling you is gospel.

#131 Dr V on 04.04.22 at 12:31 pm

103 Bezengy

“…… almost half in cap gains from our energy investments, lots of cdn divvy income, and we do our best to spilt it….”
——————————————————-

Nice job B! Here’s hopin’ Chrystia doesnt monkey with the cap gains! I’ve already taken some this year but will hold until we know more. We try to split evenly as well because I bet that option will be reduced or limited going forward.

If you want to have some fun, enter $100k into this tax calculator and see what the “well paid” workin’ stiff is
left with in your home province. And remember that person has to save for retirement!

https://www.eytaxcalculators.com/en/2022-personal-tax-calculator.html

#132 Jason Reed on 04.04.22 at 12:34 pm

What MMT theorists get wrong is that people can migrate out of tax hells and into capitalist havens.

The MMTers might then retort “We’ll harmonize global tax regimes so that can’t happen”.

And that might work for a while until some astute politician wakes up from the MMT nightmare and proclaims “we might gain an advantage if we lower taxes on people and businesses to build a better future”.

#133 crowdedelevatorfartz on 04.04.22 at 12:51 pm

@#123 Philco

So you’re one of those rich oligarchs I’ve been reading about.
How big is your yacht?

#134 Philco on 04.04.22 at 12:59 pm

#107 crowdedelevatorfartz on 04.04.22 at 8:34 am
@#92 Philco
“Why? What do renters need?”

+++
Well since vacancy rates are at an all time low and rents are at all time highs….

More rental options?

But you just keep supporting the tax incentives for builders and investors of condos., the sale of personal homes, etc.
Renters can go sleep under a bridge
========================
CEF whats the difference between that and 80 bailouts for Bombardier…..OR did you know in the 2009 recession the gov started the “GO BC” gig with Telus Mobilty. Gave another public company mega loot for cell build out “TO ASSIST the assist the economy” and get more people coverage…..
Whats the difference? LOL

#135 XEQT and chill on 04.04.22 at 1:17 pm

#117 XEQT and Chill on 04.04.22 at 10:24 am
Chrystia Freeland has already stated in the HoC she doesn’t believe in MMT.

Nice try, Garth.

Deeds speak. – Garth

Economists care more about debt to GDP ratio.

Canada’s credit rating despite the spending is unchanged.

We’ll see what’s in the budget, seems early to make a call.

#136 When Will They Raise Rates? on 04.04.22 at 1:37 pm

#121 Crystal ball futurist on 04.04.22 at 11:15 am

Our two kings J&J will get a lot of pointers from today’s post.
Enjoy all the free stuff till it lasts but do protect your assets. Not sure how to do that when the Govt can freeze your assets as proven recently.
Welcome to the age of stupid.

———————-

They can’t freeze your crypto held in private wallets, or the bullion you lost in a boating accident…

#137 al on 04.04.22 at 1:45 pm

Inflation, Zimbabwe and Venezuela in the same post!? Red meat for the steerage section lol

#138 Philco on 04.04.22 at 1:55 pm

#133 crowdedelevatorfartz on 04.04.22 at 12:51 pm
@#123 Philco

So you’re one of those rich oligarchs I’ve been reading about.
How big is your yacht?
=====================
HAHA
Those guys are criminals through and through.
I don’t care or aspire to be super wealthy.

Did ya see now the UK is boo hooing those dudes.
Everyone was cheering when they showed up there with their billions to buy RE.
Realtors, Lawyer governments got cake.
Oh no now its bad and their a target….Hypocrite’s and truly just a game going on.
JUST the same as the mega money laundering going on in Kanukle land. They new about it as peeps in power were getting cake too.
They would fry a guy like me for doing something illegal. That’s for those untouchable elite dudes.

I feed my family well pay more than my fair share of taxes and keep my mouth shut. Or else.
I can see right through everything on how things roll and Ill always be ahead of the peon pack that’s for sure. That’s all I got.

#139 GarthWrong on 04.04.22 at 2:21 pm

With inflation going from nothing to almost 6% in a year or so, this may already be happening.

Except this line is deliberately manipulative because there is only one, single, solitary reason for inflation and it has to do with the darling of the alt-right. Mr.Vladimir Dracula Putin and his genocide in the Ukraine.

#140 Old Boot on 04.04.22 at 3:39 pm

#90 HUNGRY BEAR on 04.03.22 at 10:40 pm
“And extra billions for reconciliation, now that the Pope did his thing.”

You must think the way European settlers who came to Canada and treated and handled the Native people of Canada was a joke?

Residential schooling was a genocide and a purge of the Native people and their culture.

SHAME
***********
If Garth will indulge me…

Indigenous cultures started dying the minute the first Indigenous hunter grasped the advantage of a rifle over a bow and arrow or spear.

That so many Indigenous children even survived to reach residential school age is due to access to European scientific advancements. Prior to contact, vast numbers of Indigenous mothers and infants didn’t survive birth and infancy. With no reliable birth control, families couldn’t feed all the surviving children. Disease, intertribal wars and famine killed entire villages prior to the advent of residential schools and the Indian Act.

My Metis father was packed off to a Catholic Indian Industrial School in the 1930’s, where he was beaten and sexually abused by the priest/s. Historically, both horrors happened pretty regularly to kids everywhere, not just Indigenous kids. At the same time his mother (of 17 surviving children they couldn’t feed, and not living on a reserve) was still losing infants to treatable diseases and one child died from a bear attack.

Innumerable ancient cultures have died out. The idea that Europeans should have just stayed home and left the Americas alone is not a rational argument. Should homo sapiens have just stayed in Africa? Do we owe reparations to homo erectus?

Thanks to European records of their early contact with Indigenous cultures, the history of European contact with North American Indigenous cultures is very vivid, and feels fresh and raw in a way that the disappearance of early Romans doesn’t.

That Indigenous groups remain distinct in Canada and able to celebrate their cultures is testament to the restraint demonstrated by early European explorers as compared to the fates of so many earlier cultures that didn’t survive the incursions of more technologically advanced societies. Just ask the Neanderthals.

If the early Europeans wanted to kill off the Indigenous populations in Canada, residential schools would not have been their first choice of methods. They could simply have denied them rifles, ammo, canned goods, flour, medicines, education, and financial support. The passage of time would have accomplished the rest.

#141 Barb on 04.04.22 at 5:00 pm

#140 Old Boot

Excellent post, worthy of wide distribution.