Interesting

 And who was running Canada in the Seventies?:

Pierre Trudeau inherited a strong, growing and diversified Canadian economy.

When Trudeau at last left office for good in 1984, Canadians were still feeling the effects of Canada’s worst recession since the Great Depression. Eight years later, the country would tumble into another and even worse recession.

The two recessions 1981-82 and 1992-93 can both fairly be laid at Trudeau’s door.

Pierre Trudeau took office at a moment when commodity prices were rising worldwide. Then as now, rising commodity prices buoyed the Canadian economy. Good policymakers recognize that commodity prices fall as well as rise. A wise government does not make permanent commitments based on temporary revenues. Yet between 1969 and 1979 – through two majority governments and one minority – Trudeau tripled federal spending.

Nemesis followed hubris. Commodity prices dropped. Predictably, Canada tumbled into recession and the worst federal budget deficits in peacetime history.

Trudeau’s Conservative successor Brian Mulroney balanced Canada’s operating budget after 1984. But to squeeze out Trudeau-era inflation, the Bank of Canada had raised real interest rates very high. Mulroney could not keep up with the debt payments. The debt compounded, the deficits grew, the Bank hiked rates again – and Canada toppled into an even worse recession in 1992. By 1993, default on Trudeau’s debt loomed as a real possibility. Trudeau’s next successors, Liberals this time, squeezed even tighter, raising taxes, and leaving Canadians through the 1990s working harder and harder with no real increase in their standard of living.

Do Canadians understand how many of their difficulties of the 1990s originated in the 1970s? They should.

To repay Trudeau’s debt, federal governments reduced transfers to provinces. Provinces restrained spending. And these restraints had real consequences for real people: more months in pain for heart patients, more months of immobility for patients awaiting hip replacements.

 

Flash-forward:

Public anger over economic failures is reminiscent of the 1970s, Bank of Canada Governor Tiff Macklem said yesterday. However Macklem ruled out any interest rate relief in 2024 as “a huge mistake.”