The Liberal Government, aided by the leftist bloc, is the author of Canada’s economic mess. The Conservatives shouldn’t impress us either; willing to capitulate on almost any policy if it means a vote or two. And now, because of the political opportunities afforded to our parliament, socialist legislation and indefinite welfare stagger and stun our families in this country.
But the buoyant attitudes of men and women in government (who are much more comfortable finically than we are) should not be underestimated. “Never fear,” they say with smiles, “We’re going to solve this problem.” which is peculiar because they’re the ones who put us in this position to begin with. Nonetheless, they promise to rejuvenate our economy by the tried and true method of “Pump Priming.” In essence, they intend to:
Give Person 1 $10.
Person 1 saves $1 and spends the other $9 buying Person 2’s good.
Person 2 saves $.9 and spends $8.1 on Person 3’s good.
Person 3 saves $.81 and spends $7.29 on Person 4’s good.
Etc.
Thus, it’s as though $10 has been “multiplied,” and the economy is saved.
Modern governments employ this strategy when they need to boost the economy or a boost in the polls—Trudeau needs both. The Liberals (and provincial governments) locked down nearly every business during this pandemic for a cruel amount of time, and now both are struggling for survival. Not only so, but looming restrictions on the horizon and ominous promises the unvaccinated won’t be able to work or enjoy certain activities nurtures uncertainty and fear in our business sector as our economy slowly stalls.
But will Trudeau’s or Singh’s plan to pump the economy full of cash work and save us from an imminent crash?
It will not.
Why?
Because the multiplier is founded on the preposterous principle that demand for a good creates the supply, when in reality, supply for a good creates the demand.
For example, suppose I’m a farmer who grows five bushels of wheat for my family and me to make bread throughout the year. After the harvest, I have no residual grain I can take to the market and sell because my family consumes all of it. Now it might be that I have a demonstrable demand for apples, but if I have no wheat left to sell, I have nothing with which to buy some apples. My craving for the fruit might be olympian, I might kick and scream and live in anguish because I want an apple so badly, but because I have nothing to trade, I cannot enjoy the pome.
Government observes this and says, “People aren’t buying as many apples! Let’s advertise the apple farm, dole out grants to increase exposure, and subsidize them if their workers are locked down at home. For that matter, let’s begin using taxpayer money to buy the apples ourselves!”
But that doesn’t address the problem. It’s like putting a cast on the leg of a man who needs stitches in his hand. The problem is that the supply of goods is low, and while it might be slowly catching up to pre-covid levels, intrusive government threatens to jeopardize that. By shutting down businesses, locking workers in their homes, and promising extensive welfare to the unemployed, government artificially restricts supply.
No workers = No product.
No product = Nothing to trade for other goods and services.
Nothing to trade for other goods and services = The stagnation of the economy.
The stagnation of the economy = The suffering of families.
Instead of increasing demand, the government ought to foster an environment where supply is permitted to flourish. I do not need a higher demand for apples; I need to grow more wheat. If I planted 20 bushels instead of five, I could consume the first quarter of my harvest and sell the rest for shoes, heat, vegetables, or power.
And how exactly can Trudeau create such a vibrant economy? By doing what he cannot; leaving us alone.
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