Quote:
Originally Posted by Slava
That is true (about the recession not lasting). At the same time though the CPC is going to have to explain why this minor little recession has sent the government spiralling into deficit.
I know that the easy argument is that they had to do this otherwise the Liberals and NDP would've brought down the house. The problem is that you can't both take the credit for the government intervention and also say that it was your opponents who caused the debt, if you see what I mean here.
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The recession blame is squarely on the American economy right now. When trade with the States decrease most Canadians accept it will slow the Canadian economy. The need for the government to over spend in order to soften the blow of a shrinking economy on average Canadians is obvious and also accepted. The Liberals almost overthrew the government on the premise that they weren't doing enough. I can't see them getting much steam from arguing the government is spending too much now. The Liberals would be better off arguing that the Conservatives haven't been compassionate enough or are spending the money wisely enough. That would be more believable.
From what I've read Obama is only spending about 9% of his stimulus package this year. Next year much more will be spent because regardless of where the economy really is at he'll want an upswing before midterm elections. Added to that the recession has soften in areas due probably to time. People won't sit on their money indefinitely. People are already testing the waters in the stock market. Also, the population is still getting older. People are retiring and moving away from the city. That movement alone will create some traction in the real estate market. Products like cars and electronics have a short life span. They will have to be replaced eventually. Slowly the glut of unemployed will step in to new jobs opened up by retirements. Remember before the recession there were fears of shortages in most professions for the coming years. People might cling to there jobs a little longer now that their nest egg has shrunk but, time doesn't stand still. Some will revise their expectations for their retirement income and others will fall to health issues or mandatory retirement at 65.
I don't expect anything dramatic but, their should be positive signs of recovery building slowly over the next few years.