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Inflation is good!


myata

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Inflation in Canada hits 18 year high with the rate of 4.4%. What does it mean? Watch your: mortgage; grocery basket; home renovation, restaurant bill; then as domino effect, all government and municipal services; municipal tax bill; university and college tuition.

But not to worry. For some of us inflation is actually good. For example MP gets automatic annual rise; it wouldn't be a surprise (actually would be surprising otherwise) if the same provision did not cover senior PS echelons. In that sunny world 2% inflation rate rakes you extra $4K but with 4.4% you can get almost 5! So bring it on, inflation is good!

In the scientific language it means that as a result of century and some of hard work we have created ourselves a negative feedback management system - the worse things are for common Joe and Jill, the better they go for those higher up in the distribution of the public pie chain. For example, Joe gets a $12K annual handout for losing his job to restrictions; while PHO who ordered them gets $400K, with automatic annual raises. And now, try to trace the future trajectory of Joe's prosperity it's not that hard. And why wouldn't you get brioches, sorry we meant automatic annual raise, Joe?

"From some, according to their ability ("travel from Wuhan" - M.); to them, according to their needs". Are you happy, Karl?

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I continue to find inflation numbers served up by POTawa to be a bold faced lie. My groceries alone are up perhaps 35% in a year in a household of one person. Gasoline here is up 40 cents/L in a year. My condo fees are up which is hardly surprising since they include all utilities.

4.4% is laughable.

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1 hour ago, RedDog said:

4.4% is laughable.

Maybe not so ridiculous if and when it brings a cuddly 400K x 4.4% = 17.6 K addition to the annual income. Good enough for a family Caribbean trip and why not if entitled to entitlements?

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1 hour ago, RedDog said:

I continue to find inflation numbers served up by POTawa to be a bold faced lie. My groceries alone are up perhaps 35% in a year in a household of one person. Gasoline here is up 40 cents/L in a year. My condo fees are up which is hardly surprising since they include all utilities.

4.4% is laughable.

The liberal MSM is protecting their idol.

I'm sure that at one point this year, maybe on Feb 4th, inflation was up by 4.4%, so they can quote that stat until Dec 31st. 

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A question for the young and curious economists here: are automatic annual raises of our great MPs and other similar arrangements for the top PS talent only following the inflation or also contributing to it? With a $30K (right, no mistake our frontline heroes) monthly paycheck why wouldn't I go for an $10 gourmet croissant with $8 coffee?

Did I hear, chicken and egg?

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3 hours ago, myata said:

A question for the young and curious economists here: are automatic annual raises of our great MPs and other similar arrangements for the top PS talent only following the inflation or also contributing to it? With a $30K (right, no mistake our frontline heroes) monthly paycheck why wouldn't I go for an $10 gourmet croissant with $8 coffee?

Did I hear, chicken and egg?

Your problem appears to rest on having a beer income with Champaign tastes. Maybe you should consider increasing your income. Get a trade, join the public service, or become a Liberal MP. I can get a decent cup of coffee for under $2.00 and a bun for even less. Better yet, make your own coffee and food. Pack a bag lunch. Be grateful for what you have and stop whining.

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What a nice advise, from a land overlord to a lowly peasant. Grateful, to who? And for what though? For an in permanent crisis crumbling system with outrageous management packages and a fraction of ICU a normal country has? For hallway medicine over decades "fix it for a generation"? For skyrocketing tuition and housing prices? For steadily edging up inflation? Wait, with that logic it's not the end of the road yet it can take you all the way to Mexico. Just watch us.

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You keep mentioning tuition. You do realize that tuition in most Canadian universities are subsidized to the tune of 70 to 85% by the government. For the 25 years I worked on campus, it was almost 90%. I think of all the money wasted by students who blew their first year partying. ($18000 per student per year). OTOH, It gave me the best job I ever dreamed I could ever have.

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On 10/21/2021 at 10:16 AM, myata said:

Maybe not so ridiculous if and when it brings a cuddly 400K x 4.4% = 17.6 K addition to the annual income. Good enough for a family Caribbean trip and why not if entitled to entitlements?

I think you are missing something here.   Inflation means you get the same service and goods for more money.  If the MP's get an extra 4.4% pay, this will only offset the inflation and their money will have the same buying power as before.

Now your focus should be on those who did not get the 4.4% raise in their pay; they got automatically poorer. Now they have to give up things.

I for example determined that my XL TH Double Double is almost 2 litters of gasoline.  So screw TH; I can make tea at home.  The problem is for how long we can make those replacements till we have nothing left to give up.

If you owed money to the bank and the interest rate was low; now you have big inflation and your employer adjusted your pay accordingly, you should be better off - being able to pay off that loan / mortgage easier - the bank loses for once.

Now think about the mega dollars some people have in bank accounts.  If they do not have the money invested and bringing returns of over 4.4%, they lost too.

 

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1 hour ago, Queenmandy85 said:

You keep mentioning tuition. You do realize that tuition in most Canadian universities are subsidized to the tune of 70 to 85% by the government. For the 25 years I worked on campus, it was almost 90%. I think of all the money wasted by students who blew their first year partying. ($18000 per student per year). OTOH, It gave me the best job I ever dreamed I could ever have.

If post secondary tuition is ever excused, I want my parents money returned as well. It would have to include EVERYONE. Of course, I’d want 41 years of interest as well.

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2 hours ago, Queenmandy85 said:

You keep mentioning tuition. You do realize that tuition in most Canadian universities are subsidized to the tune of 70 to 85% by the government. For the 25 years I worked on campus, it was almost 90%. I think of all the money wasted by students who blew their first year partying. ($18000 per student per year). OTOH, It gave me the best job I ever dreamed I could ever have.

Please don't tell me as I have a relative in the system. She is a great student and gets scholarships and still it doesn't cover anywhere near everything. Then there are those who were less fortunate going through high school and / or having relatives who could foot bills and for them it's a question of juggling part time work and serious studies or going waste deep in student debt. Of course neither of it encourages change of career, reeducation, continuous education and so on, just what we need in this century of knowledge and information.

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2 hours ago, cougar said:

I think you are missing something here.   Inflation means you get the same service and goods for more money.  If the MP's get an extra 4.4% pay, this will only offset the inflation and their money will have the same buying power as before.

Thinks of it this way: you have a number, like 4.4% in the paper, figuratively speaking. And you have $17,600, cash in the hand. Or, you have nothing, empty hand. Which of the two options do you choose?

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1 hour ago, myata said:

Thinks of it this way: you have a number, like 4.4% in the paper, figuratively speaking. And you have $17,600, cash in the hand. Or, you have nothing, empty hand. Which of the two options do you choose?

MP's are paid $182,500, (which is plenty) not $400,000. They only get more if they hold special offices or positions. So $8,300 before tax. Regardless of what you may think of MP salaries, cutting them in half would do nothing to reduce the inflation the rest of us experience.

Cost of living increases just keep you where you were last year. Unfortunately not everyone gets them. I've been retired since 2006 on a fixed pension and other than COL increases in OAS, I haven't had a raise since then. I depend on my investments to make up for inflation which they haven't because of declining interest rates. GIC's now pay less than half what they did when I retired and you will pay premium for a decent bond with a reasonable rate, if you can find one.

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7 minutes ago, Aristides said:

MP's are paid $182,500, (which is plenty) not $400,000. They only get more if they hold special offices or positions. So $8,300 before tax. Regardless of what you may think of MP salaries, cutting them in half would do nothing to reduce the inflation the rest of us experience.

It's not that they're making so much money that inflation doesn't matter to them, it's the fact that their salaries are rising with inflation & they have indexed pensions so they don't care.

They can keep spending taxpayer money like fools to keep getting re-elected by the idiots who don't understand how F'd we'll all be once this is a debt-ridden socialist shithole. 

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15 minutes ago, WestCanMan said:

It's not that they're making so much money that inflation doesn't matter to them, it's the fact that their salaries are rising with inflation & they have indexed pensions so they don't care.

They can keep spending taxpayer money like fools to keep getting re-elected by the idiots who don't understand how F'd we'll all be once this is a debt-ridden socialist shithole. 

 

Anyone with indexed incomes or pensions don't really care.

The BoC can't raise rates to fight inflation because our governments and Canadians in general are so far in debt, they couldn't service a 2% increase in rates. We have borrowed ourselves between a rock and a hard place. But then, so has most of the western world.

What is really disturbing is Canadian personal debt is in the top three or four countries when it comes to debt to income and debt to GDP ratios. 

Edited by Aristides
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4 hours ago, myata said:

Thinks of it this way: you have a number, like 4.4% in the paper, figuratively speaking. And you have $17,600, cash in the hand. Or, you have nothing, empty hand. Which of the two options do you choose?

Now you deliberately ignore the point.

Think of it this way.  Inflation is like a guy who broke your window.  The MP's got compensated for the broken window so they do not have to pay it off their pocket.  Maybe you were not compensated.

But they are no better off that at the time they had the fist window still standing.  You - you are worse off for sure.

 

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10 hours ago, cougar said:

Now you deliberately ignore the point.

It's a bit more complex than that. Inflation number in the paper is a simple and often simplistic reflection of the phenomena, like geographical distribution, even in the same place prices can vary significantly. Most of us aware of the phenomena, especially where it cannot be avoided, like municipal taxes and government services. And then some of us given a chunk of cash to deal with it, and others, "good luck!".

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11 hours ago, Aristides said:

MP's are paid $182,500, (which is plenty) not $400,000. They only get more if they hold special offices or positions. So $8,300 before tax. Regardless of what you may think of MP salaries, cutting them in half would do nothing to reduce the inflation the rest of us experience.

Novice MPs are not the highest paid positions in the public hierarchy and for some documented cases calculation is correct. For some public hospital management positions, compensation goes well into hundreds of thousand and probably millions. Now you have a sector that has automatically increasing amount of cash to spend, year on year, without any relation to the delivered product. And why would you say that it wouldn't have any effect on the inflation?

Finally, just for information, the median single income in Canada is close to $33K. A novice, vanilla MP without any positions would be making $182.5K plus allowances, benefits and parliamentary pension. One can easily find the ratio. The question is, does it still look like a G7 democracy condition or already somewhat like third-world, Latin America condition where those who made it to the bottomless trough filled by taxpayers consume without any relation to the reality of the country?

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On 10/23/2021 at 3:28 PM, Queenmandy85 said:

You keep mentioning tuition. You do realize that tuition in most Canadian universities are subsidized to the tune of 70 to 85% by the government. For the 25 years I worked on campus, it was almost 90%. I think of all the money wasted by students who blew their first year partying. ($18000 per student per year). OTOH, It gave me the best job I ever dreamed I could ever have.

Ok now i'm confused, are you saying the government is pouring in money to universities on top of the students, or that students education cost less because the government is funding most of it (80 to 90 %) and if that is the case why are they whining about having to pay back almost 6 figures in loans, if it is not in education then what ? thats a lot of beer money..

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18 hours ago, Aristides said:

 

Anyone with indexed incomes or pensions don't really care.

 

Maybe it is just me but from what i understand is  ,a military pension, to be eligible you must have x amount of years of service plus your age when added together equals 85 or more before you are indexed ... and while it does go up most years it does not keep up with inflation, what it does do however when DND's  civil service gets a raise, it is quickly followed by the military getting a raise, not as much but it is a raise,(not many military guys are complaining about wages)  this is then transferred to the pensioners again not as much but it is a raise.. ( again not many ex military guys complaining about the pension)

Maybe the other government departments do it differently.

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18 hours ago, Aristides said:

 

Anyone with indexed incomes or pensions don't really care.

The BoC can't raise rates to fight inflation because our governments and Canadians in general are so far in debt, they couldn't service a 2% increase in rates. We have borrowed ourselves between a rock and a hard place. But then, so has most of the western world.

What is really disturbing is Canadian personal debt is in the top three or four countries when it comes to debt to income and debt to GDP ratios. 

It can't be that disturbing, atleast not to the current government which have told the people rates are good right now it's ok to spend like a drunken pirate, well OK enough to spend over 350 Bil without blinking an eye.

At some point we are going to be forced to service our debt, our credit rating has dropped, and with all the new social programs that are going to come on line that funding has to come from some where... Anyways Greece found out the hard way what life looks like when you spend more than you make...

What is disturbing most Canadians are good with it, they just don't want to pay it... our leadership should be setting the example for the rest of the nation to follow.  

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8 minutes ago, Army Guy said:

It can't be that disturbing, atleast not to the current government which have told the people rates are good right now it's ok to spend like a drunken pirate, well OK enough to spend over 350 Bil without blinking an eye.

At some point we are going to be forced to service our debt, our credit rating has dropped, and with all the new social programs that are going to come on line that funding has to come from some where... Anyways Greece found out the hard way what life looks like when you spend more than you make...

What is disturbing most Canadians are good with it, they just don't want to pay it... our leadership should be setting the example for the rest of the nation to follow.  

Our dollar has dropped as well. In the past when oil has hit $85 a barrel our dollar was at or near par with the US but we have gone so far to restrict the industry and limit our exports it can no longer prop up our economy and currency.

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A median income of $33,000 means that half of income earners in this country make that or less. We like to think and present ourselves as an egalitarian and inclusive society, though the reality can be not only different, but quite the opposite. How can surreal on the general background of the country luxury of a salary ten times and over of what half of the fellow citizens make, entirely on the public's paycheck, attention, no "socialism" (it does though begin to look like another ism word, for a selected group of us) can be justified? I don't think it can be, logically and rationally - it just has been this way from the get go and nobody ever since wanted to look and think about it.

And the obvious conclusion is that it, the gap is only going to get greater and worse, to 20x, 50x (NHL salaries) and so on to ridiculous South American examples, simply because a) it's been like that since get go b) nobody cared and c) nothing can be changed anyways even if anybody did.

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