Monday, July 16, 2012

This Old Economist: “Europe’s woes relate to North American lifestyles”

["Who will last longer? The ants or the humans?"]

We’re all in this pea soup together, so as Europe's economy falters North America's declines as well, and here in Canada, citizens will have to re-adjust the Canadian Dream downward - if they haven’t done so already.

(FYI - The Canadian Dream is much like the American Dream, but our cold hard cash is colder)

A newspaper article, ‘Europe woes hit home’ (July 12, London Free Press), shares details about Canada’s struggling trade deficit (i.e., we import much more than we export): “(It) unexpectedly rose in May, pushed up by record imports while exporters struggled to make any progress in the face of the European economic crisis.”

‘Unexpectedly?’ Somebody didn’t see that coming? I'm very surprised. European debt has been deep for a long time and few countries can afford to buy our Made in Canada products. (We may be seeing the end result of driving the economy, consumerism and easy debt too hard for too many years). 

I was also surprised when the writer quoted Statistics Canada as saying that “the May deficit edged up to $793 million from $623 million in April.” In my mind, the deficit (that grew more than 27% in one month) did more than ‘edge up’. Stats Can knows exports are an extremely vital part of the Canadian economy, and should have reported that the deficit ‘jumped up’, and that we should ‘wake up’. 

Admittedly, the term ‘edged up’ was better used in a later sentence in the article: “Exports to the United States... edged up by 0.2% (in May) after four consecutive month-on-month falls.” It wasn’t much of an edge, but it was something. (That’s what ‘edged up’ means, right?)

After examining our sticky situation I came to the conclusion that the best way to put a positive spin on interconnected and multiplying global economic woes is to get ahead of the curve. I propose we quickly reduce personal and household spending, pay down debts and save money for tough times ahead (just like ants, who put away supplies for the winter). 

Living with less now will produce many positive benefits in the future.

More to follow.

[Photo by G.Harrison]


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