Five Things to Know About the 2018 Federal Budget
I’ve written a blog post about the 2018 federal budget.
Points made in the blog post include the following:
-Important new housing investments were made for First Nations, Inuit and Métis people.
-The Working Income Tax Benefit was expanded, made automatic and rebranded (i.e., renamed).
-Canada’s official unemployment is now the lowest it’s been in decades.
-Canada’s federal debt-to-GDP ratio is (by far) the lowest of any G7 country.
The link to the full blog post is here.
Letter to Chronicle Herald (unpublished)
Re: Unemployment rate tumbles to 5.7% to reach lowest mark in more than 40 years, Canadian Press, Jan. 5, 2018
https://www.thechronicleherald.ca/business/1534068-unemployment-rate-tumbles-to-5.7-to-reach-lowest-mark-in-more-than-40-years
The unemployment rate of 5.7% may be the lowest in more than 40 years, but these were years of neo-liberal triumph. Unemployment after WWII until the mid-1950s averaged less than 3%, and had dropped to 1.4% during WWII itself. However, business and financial elites are happy to erase history, and to normalize higher rates because for them a slightly recessed economy delivers numerous benefits.
Higher unemployment means less pressure on wages that reduce the profit share. It also means less inflation that erodes accumulated wealth. And if the workforce is induced to borrow to maintain lifestyles, not only is another stream of financial income created, but the debt burden and fewer opportunities keep workers obedient through fear of losing their jobs.
Unfortunately over 1.1 million Canadians are officially unemployed today, and this number does not count those discouraged nor involuntarily working part-time. Through targeted fiscal and monetary stimulus, the federal government could halve the existing unemployment rate. But to do so, it would have to side with the workforce and challenge the establishment.
(Footnotes to follow.)
Footnotes to Letter to Editor:
1. A note on Canadian unemployment since 1921
http://www.statcan.gc.ca/pub/75-001-x/1992003/87-eng.pdf
“From 1927 to 1929, and again during and after the Second World War, unemployment rates dropped to 3% or less……”
2. The Deficit: Hysteria and the Current Crisis
http://haroldchorneyeconomist.com/2011/10/11/the-deficithysteria-and-the-current-crisis/
“Further, in order to reduce the rate of unemployment and eventually the deficit in the longer term it is necessary to greatly increase the gap between government expenditure and revenues.
This is clearly what happened during World War II when the deficit rose from less than 1 percent of the GNE in 1939 to 21.7 percent of the GNE in 1944. The unemployment rate fell from 11.4 percent to 1.4 percent during the same period.”
3. You know who likes lackluster economic growth? The rich. Jeff Spross
http://www.theweek.com/articles/580975/know-who-likes-lackluster-economic-growth-rich
“Elites obviously don’t want to completely tank the economy. But it certainly works for them if it stays modestly stagnant, maximizing the growth of the pie while minimizing worker bargaining power.”