The establishment media is always looking for an easy story – especially one that boosts the image of the Trudeau government – and nothing is easier or more image-boosting than talking about the GDP numbers.
So, it’s no surprise that there were breathless reports about Canada’s 3.7% GDP growth in the first quarter. Some even made a big point of talking about how Canada’s GDP grew more than the rate in the United States.
And yet, focusing on the top-line GDP number is a big mistake, unless proper context is given. Because when we look deeper, the truth behind that number is very concerning.
As reported by Bloomberg, household, business, and government spending all went up. Household saving went down. The housing boom in Toronto and Vancouver are also pushing investment forward. And government debt continues to rise.
An economy growing on the basis of a rapidly rising mortgage market, massive consumer debt, and large government budget deficits. If you’re thinking that sounds disturbingly familiar to pre-crisis moments, you would be 100% correct.
Any economy can grow if the housing market is rapidly overheating and consumers and government are racking up massive amounts of debt. The problem is that it’s not sustainable.
Buried at the end of the Bloomberg report on the GDP numbers is this important note:
“Exports disappointed, with a negative annualized reading of 0.3 percent in the first quarter. Combined with a surge of 13.7 percent in imports, the trade sector was a major drag on growth. That means the expansion is totally reliant on domestic demand — business, consumer and government spending — which was up an annualized 4.7 percent in the first quarter.”
This is not sustainable. Strong domestic demand is a good thing – if it is based on a solid economic foundation. But that’s not what’s happening now.
Instead, our economy is experiencing a “sugar high,” a temporary jolt of energy based upon factors that will soon fade away. Household debt is at record levels. Wages are still stagnant. The government is spending massive amounts of money and racking up huge debts – with zero benefit to the vast majority of Canadians – and incoming tax increases will take what little money many people have left.
As much as Trudeau and the elites want to think otherwise, that is not the recipe for strong economy.
Rather than build on the strong foundation of low taxes and balanced budgets left by the previous government, Trudeau has taken Canada onto a dangerous path. Now, it’s all about growth fueled by rapidly rising debt – which history has shown to be a recipe for instability and disaster.
As Maxime Bernier said on his campaign website, “Debt and deficits are nothing more than deferred taxes on our children and grandchildren. At some point, the bill will come due for the reckless spending from the Trudeau Liberal government.”
By refusing to understand that truth, the establishment media is falling for the same kind of thinking that has wrecked our economy for so many people. Until we dramatically shrink the size of government, balance the budget, and lower taxes for Canadians, our economy will continue to weaken and our future will be put at ever-increasing risk.
The elites want to hide their many failures behind political correctness, deception, and manipulation. We need to push back and spread the truth.
That’s why I write.
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