the only way to boost economy is by spending. the reasons why the economy is failing is because no one is buying big ticket items, such as house and cars.
true that canada is actually going in to deficit for the first time in a decade, but the government is doing what it can do to keep the economy as it is right now. The bank of canada is willing to lower interest rates close to 0%, but never actually 0%, to boost spending. The Government is actually for the first time borrowing money to start Public Projects such as roads, public buildings, highways and etc. to give jobs so people can spend money.
its all about keynesian economics, so the way i see it, the more we spend the more we help out the economy.
companies go bankrupt because no one buys from them.
spending ANYTHING right now is a smart choice. Things are cheaper, such as houses, cars. Ford and GMC are giving 0% interest rates. Its a smart time to buy stocks, because it will eventually pick up in a few years, by the next olympics atleast.
the only reason why the GLOBAL economy is shitty is because our neighbors down south can't control their spendings habits.
btw, education ftw.
I'm sorry, but this is some of the dumbest stuff I've read in a long time. Citing some shit you read in your first year economics textbook? If you didn't still live at home, or if you actually had a real job, you would know that 90% of the theory you learn in college, especially pertaining to the financial markets, does not apply because of one simple concept: PEOPLE ARE IRRATIONAL. All this neo-classical Keneysian economic policy bullshit has FAILED. It can never work. It never has worked.
Why? Lets just examine it's basic premises...
1) Rational preferences among outcomes with a identifiable and associated value
2) People maximize their utility/firms will maximize their profits
3) People act independently on the basis of full and relevant information
Basically, if your little textbook was correct, the following would happen:
If you prefer beer over liquor, you will always drink beer. You will NEVER drink liquor (1)
You drink beer until you get a nice buzz, and you stop right then and there. You never get wasted because this does not maximize utility (2)
When you're at the bar with your friends, and they're buying shots, you won't take one. Not because this contradicts point 1, but rather because you know one shot leads to two, two to three, etc. You are acting independently based on the information available to you. This is the same as if the CEO of Boeing, your best friend, was a little tipsy and told you that tomorrow Singapore Airlines would announce that they have just purchased 10,000 747's and instead of purchasing every single share of Boeing possible, you still spend the next week behind a computer, researching ever single detail about Boeing, Singapore Airlines, and the aviation industry in general (3)
NONE OF THIS STUFF HAPPENS IN ACTUALITY. KEYNESIAN ECONOMICS DOES NOT APPLY TO THE REAL WORLD. IT NEVER HAS! STOP BELIEVING THAT EVERYTHING YOU READ IN A TEXTBOOK AND DO SOME OF YOUR OWN RESEARCH AND DRAW YOUR OWN CONCLUSIONS. THEORY IS JUST THAT, A THEORY!
Seriously, it disappoints me that kids are being trained and taught that everything that they read, in terms of theory, as a practical application. You seriously think it's wise to spend right now? I dare you to walk into any office in your Financial District and tell that to the people working there. They'll laugh in your face. These people have mortgages, car payments, etc and right now they need to do EVERYTHING in their power to stockpile as much cash as possible in case they lose their job. Otherwise, the outcome could be catastrophic. You know the economy is bad when accountants are worried about their jobs, and they are trust me. Buy a car now? Good luck getting financed. Paying in cash? That's wise - I can't think of a better way to cut your money in half overnight. Leasing? Yes, lets lock ourselves into a 39 month financial commitment when the economy is the worst it's been in our lifetime. Want to buy a house? Ever heard of negative equity? Of course you have, you're all grown up and you're a college boy now. But for the 15 year olds here, that's what happens when you pay $400,000 today for a townhome that's only worth $380,000 tomorrow. THERE IS A BOTTOM TO THIS DOWNWARD SPIRAL WE ARE IN AND WE'RE NO WHERE NEAR IT YET.
I could keep going, but what's the point. Kids will be kids, they will continue to spend, and your post just reaffirms that notion.
And before you start talking to me about education, how about completing your degree first?