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Will Trudeau/Liberal policies make inflation worse or better?


blackbird

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When PM Trudeau was asked in Question Period today what his solution is to the high inflation of 4.7%, his answer was the government is spending more on things like $10 a day child care and more programs to make housing more affordable.  Presently the government has created a debt for Canadians of approaching half a TRILLION dollars.  This massive debt has to be the main reason that is driving prices up at an average of 4.7%.  This will effect the great majority of Canadians negatively.  So how can increased government spending by tens of billions of dollars, which will simply add to the existing bizarre debt, reduce inflation?  It can't reduce inflation.  Increasing the debt can only make inflation worse and negatively effect most Canadians.  The PM just does not seem to really care about Canadian families.  All he can say is he is moving forward on $10 a day child care.  This massive increase in government spending certainly will do nothing to reduce inflation.

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Low interest rates are great for the economy (not to mention tax revenues) while higher inflation allows governments to inflate away its debts.  Basically the combination of low rates and higher inflation is good for borrowers but not so good for savers or the currency.  It's why central banks like to strike a balance between interest rates and inflation's inverse relationship.  Governments can pay off debt by increasing taxation or by inflating it away.  So when you go shopping and find things are a little more expensive just look at it for what it actually is....  regressive taxation.

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