Man, it was like money spewing out of a volcano on Parliament Hill yesterday, as the Conservative government gave it their best second-attempt at steering this country down the right economic path. The only thing that could've made it even more dramatic would've been AC/DC performing "Money Talks" to follow Jim Flaherty, and close out the show.
The recession budget dishes out $20 billion in personal income-tax relief and $8.3 billion for retraining unemployed or laid-off workers, but racks up a whopping $85 billion in debt over six years (by 2013, the national debt is expected to hit $542 billion, up from $457 billion in 2007). The plan also "shovels" $7 billion in new cash at infrastructure projects, and offers a pile of breaks for homeowners to do renovations and retrofits.
Apparently, it's now up to you and me to "spend" our way out of this recession, and get the economy rolling again. I understand the logic there, but I'm having a really hard time convincing myself to get off my wallet and open it up wide. I don't think I'm alone on this one either. I even heard an economist say during CHEX-TV's Newswatch last night that it was going to be a tough sell to get Canadians to part with their money during this economic uncertainty, especially those who have watched their RRSP savings evaporate over the past few months.
Nobody around here has to be reminded how much this city relies on the auto industry. Jobs have been lost...there are threats of more cuts...and rumblings of a GM bankruptcy have put fear into those living on pensions from the company. My friend Greg was working for a local dealer at the Toronto Boat Show recently, and tells me that sales of lower and mid-range units were down (which he attributes to the reluctance of nervous consumers like GM employees to make purchases); however, sales of high-end units were up (suggesting that people who do have money view this as a good time to make big ticket purchases). Hmmmm...let me check the glove box of the Rolls-Royce for a spare $100,000. No...I guess I'm stuck with the "tin can" boat I have.
Call me crazy, but didn't our general spending habits help to get us into this mess in the first place - - people buying homes they couldn't afford, cars they couldn't fuel up when gas prices hit $1.38/litre this past fall, people living beyond their means and maxing out credit cards? As for the home reno tax break announced yesterday that everyone seems to be excited about - - it amounts to a 15% break. You’ve gotta spend $10,000 to get the maximum credit of $1350. Unless you actually have the money for the job, you’ll need to finance it. And depending on how you finance it, you could be paying upwards of 20% interest on a credit card. That new bathroom doesn’t sound so appealing now, huh?
I guess I can thank my lower middle class parents for passing along some sort of economic sense. They both grew up in large families during the Depression - - so, they (like others of that generation) really knew the value of a dollar and how to stretch it. My parents lived in an era when you bought something only if you had the cash for it -- they got their first credit card when they were in their 50's - - and, if you didn't have the money, you put it on "layaway"...making monthly payments and receiving the goods once you had paid for them in full.
Not our generation. It's all about "instant gratification" baby. Get it now...pay for it later. Heck, I think some people really fell for that advertising slogan, "you're richer than you think".
So, here's my plan - - spend money...cautiously. Buy local. Buy Canadian-made (whenever possible). Let's get this thing fixed.
Any thoughts on the recession...or plans of your own to weather it? I'd love to hear about them. Leave a comment!