We've become regrettably disconnected from one another here in the Maritime provinces. For example, in Nova Scotia the only thing we seem to know about New Brunswick these days is that prices are cheaper over the border, causing embarrassment for the Nova Scotia government.
Gas stations and other businesses are wobbling and closing in the Amherst area because people are flocking to New Brunswick to gas up and buy stuff. Business people complain, with the accusation that Nova Scotia's taxes are too high.
Tepid GDP numbers released Tuesday by Statistics Canada confirm that Canada's economic recovery, such as it was, is sliding completely into the ditch. We're clearly heading for stagnation at best, and quite possibly another "double dip" downturn.
The headline number was disappointing, to say the least. Real GDP grew only 2 per cent (annualized) in the spring quarter. That's just a hair faster than the U.S. economy (which everyone knows is still deeply in the soup). Two per cent doesn't keep up with population and productivity -- implying higher unemployment ahead, not lower. Typically, at this stage of recovery, the economy should be growing three times faster.
The world economy is mis-functioning. The whole world is sending money to the richest country, the U.S., to feed its consumption habits. While Germany, Japan, China, and the oil exporters are in a surplus position, the rest of the world is in deficit. This is a serious problem because, unlike the U.S., other deficit countries cannot settle their accounts by printing their own money.
The U.S. federal government has been paralyzed for two weeks by a lack of budget spending authority, with hundreds of thousands of federal employees off the job. And that's just the immediate economic fallout from a political showdown over whether the U.S. government will be allowed to borrow beyond its current $16.7 trillion (U.S.) debt ceiling. Without that authorization, many more government operations would cease immediately, and the U.S. would likely default on some of its existing debt. Perhaps most painful of all, even the best-case outcome to this week's drama seems to be a compromise that would permit four months' additional borrowing -- merely setting the stage for another showdown in February.
Starting with the 2008 financial meltdown, then bank bailouts, government deficits, out-sourcing, factory shutdowns, high unemployment, record high household and student debt, then the Euro-debt crisis, and now government austerity programs with cutbacks in Federal and Provincial budgets to public services and social programs including pensions, drug benefits and Medicare - - - - it’s still the “Great Recession” and …
The Trouble With Billionaires – Democracy, Government and the 1%