The non conformer's Canadian Weblog

April 1, 2009

Canadians still in serious vulnerability, risk in this recession

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The Good or bad news which do you want first?
 
An ostrich based Conservative government that falsely denies reality, is self centered can never effectively help Canadians in time of their need..
 
-Also  Serious Cuts to social assistance, unemployment insurance, and other government transfers have weakened Canada’s automatic stabilizers, which kick in during recessions to cushion the blow for vulnerable citizens and help maintain consumer demand. 
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Now Prime Minister Stephen Harper  he will undoubtedly tell others   that Canada is well positioned to manage the crisis domestically. 
 
Now  in reality while  Canada is certainly better positioned than most to implement an aggressive fiscal stimulus package to cushion the blow of the recession, for we have one of the lowest debt-to-GDP burdens of any industrialized country. This advantage, however, is still mostly  meaningless for Canada enters this recession in a far more vulnerable state than in past recessions 
  
.– Furthermore Historically, a large Canadian public sector provided stable jobs and vital public services, making it an effective counterbalance to contraction in the private sector. This stabilizing force in the Canadian economy is now dramatically smaller  down from 50 per cent of GDP in 1994 to 34 per cent of GDP in 2004. Without the full  supportive mechanisms, the recession will be deeper and more prolonged than in the past.

-Plus changes over the past decade in the structure of Canadian production and exports have resulted in a dramatic proportional rise in resource exports and a corresponding decline in manufacturing exports.  Always a trade-dependent country (accounting for about one-third of our GDP), Canada is now even more vulnerable to volatile commodity price and volume swings. This vulnerability is heightened by the fact that more than 80 per cent of our exports go to the U.S. In the last six months alone, these exports have fallen by one-third… Counting on a U.S. recovery to spark a revival of Canadian exports and free-ride our economy out of recession may have worked in the past, but the U.S. is not likely to come out of the current recession any time soon.

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Harper also falsely  has been peddling an upbeat  type message that economic recovery is just around the corner, a message that flies in the face of a deteriorating economy., real economic vulnerabilities underlying Canada’s economy.  So with an intervention-averse Conservative government at the helm, Canada’s recession will be deeper and more prolonged than it needs to be. Many more people will suffer. And the cost to the economy  and to our way of life  will next be profound.

www.policyalternatives.ca

  There  0recession-2is no good news in these matters yet..

-For many Canadians, stagnant wages and low interest rates depleted savings and led to the ballooning of personal debt as a way for many as a way  to maintain to their standard of living.

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