In today’s class on How to Combat Inflation 101, we learn that the best way to counter the surging cost of living is to… hand out more money?
If that sounds completely absurd to you, that’s because it probably is. However, according to Quebec, inflation (which was caused by MMT and money printing in the first place) will just go away if you give each citizen more free money. On Tuesday, the Coalition Avenir Quebec government, which is also incidentally facing an election in October, announced that all Quebecers earning less than $100,000 will receive a one-time payment of $500 to offset the rising cost of living.
“The inflation situation is exceptional,” said Finance Minister Eric Girard to reporters, as cited by Reuters. “So, the compensation is exceptional.” The program is expected to hand out free cash to 6.4 million Quebec citizens, and will cost the province $3.2 billion. For his part, Girard assured the move is NOT politically motivated, and is merely an urgent method to help maintain households’ standard of living. “The need is now so we’re acting now,” he said. “The election is in October.”
Quebec’s budget deficit for 2021/2022 is now expected to hit $7.4 billion, compared to November’s projection of $6.8 billion amid higher government spending. Going forward, the government forecasts fiscal 2022/2023 will see a $6.5 billion budget shortfall, and is banking on a surge in economic growth to eventually reach a balanced budget sometime after fiscal 2027/2028.
However, even the province’s own projections show economic output will decelerate over the next several years. Following a 6.3% jump in 2021 amid a strong rebound from Covid-19, the province now expects GDP will increase 2.7% in the current year, followed by 2% and 1.5% growth in 2023 and 2024, respectively.
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Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
