Why do some editors seem to shy away from letters from socialists? Maybe this is because socialists are gloomy with regard to the prospects of the Canadian economy and indeed the world economy in general. However, socialists are not alone in their prognosis.
The U.K. has just received what is, on face value, very good news from the think-tank the Centre for Economic and Business Research. The CEBR report that the U.K. will have the largest economy in Europe by 2030.
Unfortunately, hard on the heals of this report comes a report from the Institute for Public Policy Research with some very bad news indeed, as pointed out by an editorial in the Independent last month entitled Addicted to debt: The U.K. recovery is underway and it is fuelled by the same disastrous borrowing as before.
The editorial says “The Independent enjoys good news as much as anyone but the IPPR’s grim warning is based not only on hard fact but also on a canny reading of the obsessively short-term way our rulers’ minds work.”
So what, you might ask, has this to do with Canada? Well apart from the fact that the world economies are now linked and interdependent, there is another important similarity.
The Independent points out that British households have cut their debt as a share of their income to around 140 per cent but the Office for Budget Responsibility fears that it could hit 180 per cent by 2018. This increase will be the result of using renewed borrowing by working people to fuel an upturn.
Canadian household debt is currently running at around 165 per cent of earnings and any substantial upturn here will have to be based on the same factor of increased borrowing by wage earners. The threat of another economic crash fueled by credit is in fact a reality.
In 2014, as we head toward the next election, the all-important question of an economic alternative will be put to the Conservatives, Liberals and the NDP.
Keith Norman Wyatt
Innisfail NDP (personal capacity)