wage freezes..or like McGinty giving the Ont civil service a 1% wage hiike
over the next 2 years, when the real rate of inflation )(gasoline, heating/
electricity/insurance/food) is closer to 5% annually.
True is some cases, but not in others. Some consumer goods are actuallyOn an inflation adjusted basis, people can buy less goods with their money today than they could 20 years ago.
cheaper today (made in China) than they were 20 years ago..but items
that are still manufactured in NA will cost more...ie: cars.
Now a hypothetical question ..is that 2011 model of car a better buy
for the current inflated value of the Cdn dollar than it was 20 years ago?
In other words, removing actual depreciation out of the equation,
is the 2011 model you are buying today, the same value (bang for the buck)
than a 1981 comparable model you were buying then?
Access to credit is what keeps the economy going...while on paper, theTake away the opportunity to borrow against future earnings, which is all that debt is, and the economy would have collapsed a long time ago.
self worth may be more today than 20 years ago..subtract one's debt from
equity,and you arrive at true self worth..which in some cases is negative.
Government self interest here. In order to bring in tax dollars and stimulateThe government knew this, and that is exactly why they lowered barriers to credit.
the economy through consumer purchases (or gov't stimulus spending),
credit has to be readily available..even if borrowed against the future.
The economy goes through cycles of growth and recession. As soon asUnless wages go up dramatically, there are only two ways it can go.
Personal debt will continue to rise, or spending will stop and the economy will slow down.
interest rates and commodities rise, that puts a damper on consumer
spending and the economy starts to slow down.
The current rise in oil prices (for an oil based economy) will have an
effect within a given time to slow down spending and if prolonged
slowdown in consumer spending occurs, a mini-recession or possibly
a full one can occur.