Cory warns of austerity in the future
Episode Stats
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Summary
In this episode, I talk about why we need to prepare for Austerity, and why it's a good idea to have a plan to deal with it. It's not a question of if, it's when, but a matter of when.
Transcript
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So back in mid-September of 2021, I tweeted, as per Economics 101, inflation is setting in
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due to massive borrowing on the part of the state. So lesson two out of that. Do you know
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what the central bank will eventually do in response? And if you answered hike interest
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rates, you're correct, and you've won a path to a prolonged recession. So I predicted an
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inflationary trend in the central bank's response to it. Am I a gifted fortune teller,
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a modern-day Nostradamus? No, I'm afraid not. I just have a basic economics understanding,
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even if our prime minister doesn't. The third part of my prediction will be coming soon is the blunt
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instrument of hiking interest rates sends the economy into a recession. And it's not just
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economic principles guiding me in my predictions. It's remembering what happened the last time the
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government borrowed itself to the brink of insolvency and dealt with the issue with interest hikes.
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Historic events, unfortunately, tend to be a circular thing. We forget and we repeat things,
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particularly with economic trends. Inflation was high and high energy prices were rampant in the
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1980s when Trudeau Sr. was Canada's prime minister. And rather than cut spending, Trudeau hammered the
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economy with high interest rates and attacked the energy sector. The result was an economic
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collapse in Alberta as Albertans literally walked away from their homes because they couldn't make
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mortgage payments with such high interest rates while the economy was in the toilet. It was
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devastating. Today we are in the exact same economic conditions and we have another bloody
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Trudeau in power. This one's dumber than his father, though, by a number of magnitudes and it
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doesn't look good. In the 1990s, we had to correct the course of high spending governments on all
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levels. Alberta's government was a little better than the federal one, actually. Premier Lougheed,
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Premier Getty, they used deficit financing and put the province deeply in the hole.
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In Ottawa, Kretchen had to cut spending and get the budget back in balance. Him and Martin were
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actually some of the most conservative governments we ever had. In Alberta, Ralph Klein, of course,
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was the one to do it. The public sector unions held massive public temper tantrums and threatened
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strikes. They're predictable. In the end, though, the cuts had to happen. The cupboard was bare.
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Now we're going to be cutting government spending on all levels again. It's not a matter of if,
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it's a matter of when. The laws of economics, they're as immutable as those of gravity. The
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government can deny it all they like, but they're going to have to face the reality of ending borrowing
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and starting to cut eventually. We can't pretend we didn't see it coming. It feels like I'm shouting
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into the wind, but we should try and warn people and at least counsel some others to prepare.
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We need to start asking ourselves, what government services can we do without? And there's a lot of
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them. What's really essential and what can we cut or eliminate? The Department of Heritage, you know,
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they could use some massive cuts. Or here's an easy one. We don't need the CBC. That's 1.4 billion a
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year. Liquidate all those buildings on top of that and the vans and the equipment, and we can throw
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that towards the debt. We could cut foreign aid. Most of it's virtue signaling anyways, and it just
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goes to dictators to buy arms. Public art? No. No, it's not the government's role to buy us art. There's
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a lot of things. The Governor General's office, how about that? There's room there. They're all
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going to howl, but too damn bad. I mean, what's more important to you, maintaining them the universal
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health care or paying the Governor General to keep globetrotting while pissing away $87,000 for
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in-flight meals for her friends? This all adds up. The cuts will come easier if we prepare for them now.
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Because if we wait until there's no choice, it's going to come a lot harder. And if you're a civil
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servant, and I know a lot of them probably don't listen to this show, but you should think to
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yourself, is your job vital or could you be easily cut? And if it's the latter, and I know that's the
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case with many, you may want to prepare for a career change. The cuts won't be as bad as some
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think anyways. In the 1990s, you know, when Klein was cutting the civil service deeply, most citizens,
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including myself, I remember, we didn't see a decline in government services. There was a lot of
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deadwood that needed to be flushed out of the halls of the government bureaucracy, and we were fine without
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them. It's likely a futile warning, but I have to try. Austerity is coming. Don't give me the
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opportunity to say I told you so again when things hit the fan. As much as I do, I admit I like saying