Nevertheless, the official verdict is that Canada is on the right track. Apparently the austerity program is working and it should stay in place until the country purges itself of all its deficit and debt-loads.
Strangely enough, no one appears to be concerned much about the plight of over 1.5 million registered and unregistered unemployed in this country. This significant demographic should be working, receiving a "living wage", paying their bills, and normally would even be paying taxes. But, the policy-enforcers don't seem to be bothered by creating major collateral damage; they just soldier on and keep cutting many indispensable budgetary items. Slashing 5% here, and 10% or more elsewhere, in order to make up for the self-induced revenue shortage, regardless of the consequences.
Meanwhile, out in the real world -- under the auspices of The Buerger Alliance -- a group of experienced, independent, out-of-the-box thinkers and problem-solvers have taken every measure to convey their message to the establishment. This message is namely this: "There are much more humane, effective and painless ways to solve our country's socio-econo-fiscal problems."
We're wondering, what exactly does it take to get auditioned?
Observations
At this juncture, in order to break the current deadlock and produce a realistic economic policy that would benefit all the stakeholders, the establishment must take action. They need to apply the "levers" of Near-Full-Employment, Living Wage, Increased Tax Revenue, and a Productive Expenditure. Then, and only then, will it become possible to effectively and expeditiously deal with the Debt/Deficit, Economic, Education, Energy, Environment, Healthcare, Housing, Infrastructure, Poverty, Transit and the Unemployment Crises.As to the questions of who has the capacity to extract this country from the worst recession since the 1920s, the answer is, Employers, Employees, and Government, conceivably working together as equal partners. Incidentally, it's difficult to fathom how a meaningful, expeditious and permanent economic recovery could ever occur without such a prerequisite.
Taking the latter observation one step further, one might even infer that, generally speaking, the establishment appears to view the citizenry and employees as subordinates chattels, rather than equal partners. What's needed is a system where the objective is to work together in unison, toward a better tomorrow for one and all.
Recommendations
In the interest of creating a favourable and collaborative environment for an effective and expeditious economic recovery, and subsequently resolving this country's numerous Socio-Eoono-Fiscal Problems, The Buerger Alliance puts forward the following recommendations:- All Employers, private and corporate, must urgently recognize that,
- Employees have an innate, parallel role to play in the economy, inasmuch as they are not only workers but also consumers in the same person; and that
- Low-paid Employees have very limited purchasing power at their disposal and therefore cannot become full participants in the marketplace.
Furthermore, realistically speaking, a combination of Minimalist Wage and Benefits Policies: - Do not really serve anyone, not even the investor class, "we all work for"; and
- Should be considered as the primary causes of the current crises, manifested by high Unemployment, Stagnant Economy, Private and Public Debts/Deficits.
- A Reasonably Well-Paid Workforce -- in its collective role as Consumers - on the other hand, is enabled to fully participate in the marketplace to satisfy its personal needs, without resorting to public assistance, or being overtaken by unmanageable personal debt.
But like it or not, in both of the latter instances, the unsettled debts are absorbed by the public, either at the cash register or through taxes, or very often both. - All Costs incurred in the process of the Production and Distribution of Goods, and for Providing Services, is paid directly or indirectly by no one else, once again, other than society as consumers;
- An across the board Pay-Rate Increase of 30% to 5% for Low-Wage earning Employees with incomes of up to $35,000 per annum (i.e. 55.3% of the total taxpayers), would create a 3.4% economic expansion rate, generating over 500,000 new employment opportunities in Canada, described in our article "Mr. Scrooge Can't Fix the Economy"
- Governments, in lieu of their Regressive Austerity Program, should:
- Partner with Employers and Employees, and participate in the overall planning of the economy, to maximize the utilization and efficiency rates of our human and natural resources. This needs to be done equitably and with the ultimate objective of revitalizing the economy and eliminating poverty and unemployment in the process;
- Revise the Corporate Taxation Policy by linking the tax rate of each corporation to the performance rate of it's respective efforts to revive the economy and in dealing with the unemployment and poverty crises;
- Reallocate 25% - 50% of the $20 billion Employment Insurance Budget toward funding a series of provincial job-creation programs. Do this by offering a $5,000 to $10,000 tax credit, as an incentive to employers for each additional employee they hire, for a minimum of one year period. Full details in "A Comprehensive Proposal for Economic Revival"
- Reduce the Working Hours, aimed at literally eliminating unemployment, without any loss in personal income. Full details in "Full Employment Without Any Loss of Income is not a Pipe Dream"
- Establish a series of Volunteer Corps Programs. These programs have the built-in capacity to effectively assist with specific issues like; the lack of affordable housing; the plight of the innumerable unemployable school dropouts -- who need training -- and the problem of high poverty rates in every province across this country. (See Option 3 in our article on "Rescuing the Canadian Economy")
- The Bank of Canada should urgently reconsider and modify its Low Prime Interest Rate Policy. Clearly, this policy destroys the value of RSPs and RIFs, which provide financial security for millions, and discourages certain forms of savings. A possible remedy would be to set up two categories of Prime Rates:
- One category for business/personal loans and mortgages at a low rate; and
- The other perhaps 3% higher than the first one, for RSP investors and RIF annuitants.
In Conclusion
Throughout the previous six months, our group has posted 14 articles, and revealed many techniques to effectively, expeditiously and painlessly resolve this country's socio-econo-fiscal problems. However, judging from the responses, one might wonder if the establishment is aware of or truly concerned about, where its regressive policies are leading.It‘s no secret that the austerity program is not working. For sure, hollowing out the country's natural resources and selling them as unprocessed raw material is not going to provide sufficient revenue to cover the cost of even sustaining the already dismal and unacceptable status quo, let alone the need for restoring some level of normalcy.
Other efforts, like offering indiscriminate corporate tax-reductions for setting up shop here in return, have proven to produce negative results in Canada, between the years of 1950 and 1995. (See our chart in the "Corporate Tax Rate Reduction vs. Unemployment Rate" section of our article on "Some Indicators on Canada's Socio-Economic Health")
Then there is this often repeated credo, that this country‘s economic success depends on Canadians' ability to compete with low-wage-paying enterprises the world around. Or that the average person on either side receives huge benefits from such exchange. However, if one considers the shoddy quality of the merchandise we receive in return, added to the horrendous waste problem that the whole world is engulfed in, then the entire dogma becomes a nightmare.
But to begin with, is it realistic to engage in a lifelong, non-stop, marathon style competition, as a condition to gain economic success? Especially since, in competition there is only one winner, and the rest are literally losers! How about applying the principle of coexistence, based on cooperation and division of labour? In this latter model, there are no losers, no animosity, no waste, but with realistic planning, the chances are that full employment, with good pay doesn't appear to be out of reach for all countries' citizenry.
In contrast, the current practice in Canada, manifested by trying to rely on a single tier industry and expect that it will endlessly support this country's economy, is extremely risky and harmful. The reality is that there is no substitute for implementing a well planned industrial diversification program. This mitigates the impact on the entire economy, in the event that the output of a single industry should reach the saturation point of its market.
While more and more are ready to chastise the millions of low-income people for getting into debt, not many seem to question the practice of paying wages that are grossly inadequate. Wages that do not even cover the basic costs of living, in supposedly the best country in the world.
Finally, witnessing the recently increased and accelerated efforts to "cut and slash" wages and social benefits -- even by as much as 50% and eliminating all benefits, in order to make this country internationally more competitive -- one might wonder how far the establishment is willing to go down the path of recreating a Dickensian era, as opposed to utilizing well-tested, productive techniques to rebuild the economy?
Quote of the day
- On the question of how to revive the economy: "We need a growth rate of 5% and we got to get the jobs back-" -- Jack Welch, former CEO and Chairman of General Electric Co., in an interview with Piers Morgan of CNN, on January 9, 2012.
- "Pawns to a big CAT" - The Toronto Star, IN4, January 28, 2012
