Western Standard - Cory warns of austerity in the future

00:00:00.000 So back in mid-September of 2021, I tweeted, as per Economics 101, inflation is setting in

00:00:07.840 due to massive borrowing on the part of the state. So lesson two out of that. Do you know

00:00:13.180 what the central bank will eventually do in response? And if you answered hike interest

00:00:17.160 rates, you're correct, and you've won a path to a prolonged recession. So I predicted an

00:00:23.740 inflationary trend in the central bank's response to it. Am I a gifted fortune teller,

00:00:27.800 a modern-day Nostradamus? No, I'm afraid not. I just have a basic economics understanding,

00:00:33.400 even if our prime minister doesn't. The third part of my prediction will be coming soon is the blunt

00:00:37.960 instrument of hiking interest rates sends the economy into a recession. And it's not just

00:00:42.840 economic principles guiding me in my predictions. It's remembering what happened the last time the

00:00:46.580 government borrowed itself to the brink of insolvency and dealt with the issue with interest hikes.

00:00:51.480 Historic events, unfortunately, tend to be a circular thing. We forget and we repeat things,

00:00:55.020 particularly with economic trends. Inflation was high and high energy prices were rampant in the

00:01:00.600 1980s when Trudeau Sr. was Canada's prime minister. And rather than cut spending, Trudeau hammered the

00:01:05.900 economy with high interest rates and attacked the energy sector. The result was an economic

00:01:10.220 collapse in Alberta as Albertans literally walked away from their homes because they couldn't make

00:01:13.980 mortgage payments with such high interest rates while the economy was in the toilet. It was

00:01:18.040 devastating. Today we are in the exact same economic conditions and we have another bloody

00:01:22.860 Trudeau in power. This one's dumber than his father, though, by a number of magnitudes and it 0.99

00:01:27.040 doesn't look good. In the 1990s, we had to correct the course of high spending governments on all 0.99

00:01:30.900 levels. Alberta's government was a little better than the federal one, actually. Premier Lougheed,

00:01:35.660 Premier Getty, they used deficit financing and put the province deeply in the hole.

00:01:40.040 In Ottawa, Kretchen had to cut spending and get the budget back in balance. Him and Martin were

00:01:44.180 actually some of the most conservative governments we ever had. In Alberta, Ralph Klein, of course,

00:01:48.400 was the one to do it. The public sector unions held massive public temper tantrums and threatened

00:01:53.420 strikes. They're predictable. In the end, though, the cuts had to happen. The cupboard was bare.

00:01:59.160 Now we're going to be cutting government spending on all levels again. It's not a matter of if,

00:02:03.720 it's a matter of when. The laws of economics, they're as immutable as those of gravity. The

00:02:08.300 government can deny it all they like, but they're going to have to face the reality of ending borrowing

00:02:12.460 and starting to cut eventually. We can't pretend we didn't see it coming. It feels like I'm shouting

00:02:17.600 into the wind, but we should try and warn people and at least counsel some others to prepare.

00:02:21.180 We need to start asking ourselves, what government services can we do without? And there's a lot of

00:02:24.960 them. What's really essential and what can we cut or eliminate? The Department of Heritage, you know,

00:02:30.240 they could use some massive cuts. Or here's an easy one. We don't need the CBC. That's 1.4 billion a

00:02:35.240 year. Liquidate all those buildings on top of that and the vans and the equipment, and we can throw

00:02:40.320 that towards the debt. We could cut foreign aid. Most of it's virtue signaling anyways, and it just

00:02:44.440 goes to dictators to buy arms. Public art? No. No, it's not the government's role to buy us art. There's

00:02:51.420 a lot of things. The Governor General's office, how about that? There's room there. They're all

00:02:54.800 going to howl, but too damn bad. I mean, what's more important to you, maintaining them the universal

00:02:58.840 health care or paying the Governor General to keep globetrotting while pissing away $87,000 for

00:03:03.940 in-flight meals for her friends? This all adds up. The cuts will come easier if we prepare for them now.

00:03:10.320 Because if we wait until there's no choice, it's going to come a lot harder. And if you're a civil

00:03:14.440 servant, and I know a lot of them probably don't listen to this show, but you should think to

00:03:18.040 yourself, is your job vital or could you be easily cut? And if it's the latter, and I know that's the

00:03:22.580 case with many, you may want to prepare for a career change. The cuts won't be as bad as some

00:03:27.940 think anyways. In the 1990s, you know, when Klein was cutting the civil service deeply, most citizens,

00:03:32.560 including myself, I remember, we didn't see a decline in government services. There was a lot of

00:03:35.920 deadwood that needed to be flushed out of the halls of the government bureaucracy, and we were fine without

00:03:39.580 them. It's likely a futile warning, but I have to try. Austerity is coming. Don't give me the

00:03:45.980 opportunity to say I told you so again when things hit the fan. As much as I do, I admit I like saying

00:03:50.560 it, I'll be perfectly happy if I don't.

Western Standard - July 14, 2022

Cory warns of austerity in the future

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