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Systemic socio-economic crisis in Canada: possible future or well on the way?


myata

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A number of long standing problems have been known and discussed over years and decades including:

Stagnating living standard for majority of population; rapidly rising cost of housing and some necessities; a long-lasting if not permanent semi-crisis in public healthcare, regardless of ever rising cost to the public; rising cost of post secondary education; and more recently, accelerating inflation and public debt; costs to the public and the society due to increasing effects of the climate change to name a few.

Problems are normal for individuals and societies; but if and when problems are not solved and no visible progress is made in long time, it can be a sign of serious deep issues. No visible progress can be observed in any of the mentioned problems. In addition, new ones are being added again with no clear view of how they can be tackled with a visible objective result within defined timescale: accelerating inflation; exploding public debt; arbitrary and chaotic pandemic management.

This confluence of serious issues within a short timeframe can be seen as symptoms of a developing systemic crisis in the management of public matters in the country, with the potential of further developing into an economic crisis. The attraction of Canada for a long time have been social stability and ample employment. Both have been eroding, including right before our eyes, in the recent years and decades.

Job security has been deteriorating steadily. Median income of Canadians, stagnating for decades. The segment of high pay stable employment producing long-term prosperity in the job market has been shrinking steadily. Services job market is increasingly unstable not in the least due to pandemic environment and ongoing restrictions. One segment of stability, public service instead of opening to the society in the time of grave need has behaved more like an impregnable fortress, closed and isolated while itself not infallible and by far to a looming debt and budget crisis. A dismal record in productivity and innovation. Diminishing competitiveness on the international market.

To all that we can add an increasingly obvious crisis in the quality, effectiveness and efficiency of public administration. It has no checks or stimuli for improvement and efficiency. It has no effective mechanisms of feedback from the society and the reality and long forgot how to learn, adapt and improve. The style of management is increasingly top down, authoritative no feedback allowed or heard.

With that in the view, and quite clearly at this time, I predict a broad systemic socio-economic crisis in Canada by mid or second half of this century. I'd like to hear arguments to the contrary. Any positive perspectives and/or prospects would do.

 

Edited by myata
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With all due respect, you wrote a 6 paragraph wall of text that amounted to, "lots of things are bad and they're getting worse," followed by "please comment." 

That's not a troll, I just don't even know where to begin typing a response to all of that.  It's too broad, too vague and has little/no objective information to work with.  You see Canada breaking down systemically.  I don't.  I just see problems that we could focus down and discuss, but not like this.  


 

Edited by Moonbox
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5 hours ago, myata said:

Stagnating living standard for majority of population; rapidly rising cost of housing 

The reasons for this is primarily foreign investment ( including PR) and low interest rates. 

Can this be fixed? Restrict foreign investment into housing, allow ownership of only one property and increase interest rates slowly. Limit foreign company owned housing.

The results of this would be catastrophic for the majority owners. 

We sold our houses for 10x profits. At the individual level it was a success, but at the collective level it destroyed the market for the next gen. 

 

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49 minutes ago, Winston said:

1. The reasons for this is primarily foreign investment ( including PR) and low interest rates. 

2. Can this be fixed? Restrict foreign investment into housing, allow ownership of only one property and increase interest rates slowly. Limit foreign company owned housing.

3. The results of this would be catastrophic for the majority owners. 

4. We sold our houses for 10x profits. At the individual level it was a success, but at the collective level it destroyed the market for the next gen. 

 

1. Pierre Trudeau had a 'Foreign Investment Board' to review foreign ownership.  What do you think of getting that relic out of the 'Raiders of the Lost Ark' basement ?

2. Seems obvious and yet why has no single government (including NDP) taken real steps to say "sorry Mr. Foreigner - take your money elsewhere ! NO THANK YOU"

3. Ah - so you know the answer already.  Also existing home owners might not appreciate their real estate prices falling back to earth since there are a lot of poor boomers living in their retirement fund.

4. Agreed...

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2 minutes ago, Michael Hardner said:

3. Ah - so you know the answer already.  Also existing home owners might not appreciate their real estate prices falling back to earth since there are a lot of poor boomers living in their retirement fund.

Ultimately, what is housing for?  It's for people to live in.  When foreigners own too much of it and are speculating and/or playing slumlord with too much of it, that brings clear economic problems. 

The bigger problem is the cheap interest rates.  The fact that prices spiked as they did through COVID downturns is lunacy.  A 1.00% rate hike this year would mean people renewing in 2023 are probably looking at +35% increased interest cost on their mortgages. Considering something like 1/4 of rental condos in the GTA were in the red even back in 2018, there are some worrying signs of a reckoning.  

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8 minutes ago, Moonbox said:

1.  When foreigners own too much of it and are speculating and/or playing slumlord with too much of it, that brings clear economic problems. 

2. The bigger problem is the cheap interest rates.  The fact that prices spiked as they did through COVID downturns is lunacy.  A 1.00% rate hike this year would mean people renewing in 2023 are probably looking at +35% increased interest cost on their mortgages. Considering something like 1/4 of rental condos in the GTA were in the red even back in 2018, there are some worrying signs of a reckoning.  

1. Agreed

2. Agreed

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1 hour ago, Winston said:

Can this be fixed? Restrict foreign investment into housing, allow ownership of only one property and increase interest rates slowly. Limit foreign company owned housing.

This is one specific problem in a spectrum of the same general trend: life is becoming less tenable and enjoyable by an average citizen; living standard is stagnating or dropping; the system, political and economical administration is not advancing interests of an average citizen and moreover, acts by intent or default, toward their degradation. I would not address all causes it would take much more pondering and text. But maybe it's related to the fact that social, economic and secondary systems, like education, employment, healthcare etc are rigid, traditional, hierarchical, top-down; challenged to adapt in a meaningful and agile way; checks and controls over administration of public matters, non existent or nearly; and the citizenry, passive and disinterested. In that environment, I'm not sure if there would be any quick and easy fixes.

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11 minutes ago, myata said:

Definitely not just the housing. But let's see if our public administrations will have any more success with this, than with other mentioned and not long standing problems.

Right, its not limited to housing, but since housing is a huge problem financially ( claims usually more than 30% of income, rent or purchase) it would change society drastically.  

One could instead focus on distribution of wealth, which would solves some of the financial issues. A bit of a contrarian view, if there was an annual wealth cap say of 50 million per year, this would limit the amount of power an individual can obtain throughout their lifetime. One would change the system of corporations also with a multi ownership basis and limitations of corporate wealth. Distribution of wealth from overflow could be decided upon by the individual. The goal being more wealth distribution over a greater number of individuals.( please keep in mind this is not a thesis, rather a too simplistic thought)

But again this does not benefit the people who are already benefiting from the system now. These same people also tend to be the people hold positions that could change the system. 

Edited by Winston
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4 minutes ago, Winston said:

But again this does not benefit the people who are already benefiting from the system now. These same people also tend to be the people hold positions that could change the system. 

I think you're touching if not on the root cause of these problems (I don't know it myself, apart from said earlier) then on something important related or correlated with it. Let's consider housing; at some point someone has discovered the value of Canada as real-estate investment. Prices shot up. Someone could have (should?) noticed and asked: what does it mean?

For who though? For those at the helm it means a jump in GDP; GDP going up, another great year for Canada. Paradoxically anything going up for an average citizen is good for the ruling elites a) as an indication of their management prowess (by one artificially selected indicator) and not to mention b) automatic annual raise.

Bottom line: we created, by intent or negligence a system of administration with incentives to serve and work for itself rather than citizens; moreover, sometimes/often setting its interests as in the example; or Covid management against those of many or the citizens. And we have no effective mechanisms, instruments to fix it. That is a problem, as far as I'm concerned.

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8 minutes ago, myata said:

Bottom line: we created, by intent or negligence a system of administration with incentives to serve and work for itself rather than citizens; moreover, sometimes/often setting its interests as in the example; or Covid management against those of many or the citizens. And we have no effective mechanisms, instruments to fix it. That is a problem, as far as I'm concerned.

I think it was by negligence rather than intent. Most people operate based on the individual rather than the collective. 

There is no system that can indefinitely manage itself, as we see today people tend to not care about the collective country or it's future direction. 

However, distributing wealth, ie power, may help prevent total loss of control. 

 

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31 minutes ago, Winston said:

However, distributing wealth, ie power, may help prevent total loss of control. 

And transparency; and accountability and a flat interconnected organization as opposed to vertical and hierarchical one; and incentives and success criteria defined by the society, rather than system itself. Sure. But that requires one essential condition: active and responsive environment, citizens. Otherwise, it's back to bureaucratic system managing itself and there's no good solutions for that, even with best intentions.

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56 minutes ago, Winston said:

I think it was by negligence rather than intent. Most people operate based on the individual rather than the collective. 

Behavioural economics shows that people often act in ways not aligned to their interests.

With a broken political system, there would be no discussion of economics, public engagement, health policy, environment but people would argue about whether statues should be taken down, about inconsequential protest movements, identity politics, the horse race of elections, and personal insults on leaders and each other.  IN other words, the topics that show up when you click on 'Activity' above...

Now I would argue that trade deals and policies that help corporations and business are a great idea, and the benefits need to be spread across all demographics.  

Housing prices came up in the last election for 10 minutes.  There was a pledge to build 'affordable housing'.  I'm waiting for the program to build 5 million affordable homes in Ontario...

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The reality is that by now the governments know how to spend tons of public money mostly on themselves. This is not the same obviously, as achieving real results, see Phoenix system story or any number of similar stories. For all essential problems we can project the chances of success from here.

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Not calling for anything but looking at these events, the detachment and disassociation of the management elites from the reality of the society may have reached levels where amicable reconciliation may not be possible. And that means a disruption, hard reset. Each part lives and develops in its own separate reality, they aren't talking to each other except top-down take it or leave monologue and drifting further and further apart.

Edited by myata
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