Food costs have risen exponentially? Speaking of things one needs to survive and sustain life. Seeing as neither tuition nor owning a home is necessary to survive and sustain life.
I'm a working class loser so I understand some of these frustrations. However, since 1999, my salary has more than tripled. Same employer, same job, though, I guess I've gotten a promotion in terms of scope of responsibilities in the last five years, but the trajectory of my wage gains has been steady.
Still can't afford to buy a home in Toronto, but I sure as hell can afford to finance my retirement savings, eat good and healthy food, go out once a week, go on holidays, buy clothing as I need it. You know, the important, necessary things to a healthy life.
Homes are overvalued and it has nothing to do with general inflationary trends because the rate of increase of home prices has been hugely superior to that of general inflation. I agree, we need a price correction, but precipitous price drops wouldn't help most people. Wishing for them in the range of 50% as has been mentioned above is a sort sick and selfish beggar-thy-neighbour mentality. I'm not upset that I can't afford to buy a home. It just simply is not by any means a necessity. It isn't now, hasn't been, and will never be.
We don't have the sort of inflation in this country that erodes purchasing power and savings. If anything, saving is currently disadvantaged because of the same low interest rates that have helped cause exponential home price increases, not because of our rather healthy 1.5-2% inflation.
Seriously, go ask the Japanese about deflation.
You sound like you have spent too much time with Paul Kugman.
You want to talk about food costs? While they have not risen as exponentially as housing, education, books, health care and energy, the cost of food has risen substantially in the past 10 years. Go read the following for starters:
http://www.economicpolicyjournal.com/2017/02/the-20-grocery-items-driving-up-your.html. Secondly, have you heard of
inflation by shrinking packaging? I suggest you have a study of that.
I love your quote: '...rather healthy 1.5-2% inflation'...
What items are you cherry picking into your basket to arrive at the 1.5-2% inflation? Ah, I forgot, you are probably using the statistics used by the Central Banks. Right - as if they are the authority on trustworthy data.
You've eliminated food, energy, housing, education, healthcare in your basket for convenience.
I challenge you to go to a parking lot of every factory in Ontario and take a survey on whether they feel that inflation has been a
healthy 1.5-2%.
Ask the Japanese about deflation? Well, the last I checked, the Japanese unemployment rate is sitting at 3%, which is substantially lower than the US and Canada and they have magnetic levitating high speed rail connecting the country while we have none. Your argument also does not factor in the fact that this deflation in Japan is coming after a multi-decade boom in economic activity. So is that deflation warranted? Perhaps, if that boom resulted in mal-investment which every boom usually results in towards the end. The Japanese have their own problems and while deflation has been spoken to be a boogyman (usually by keynesians) it has not been as decimating as people describe it to be. The Japanese investor/saver actually earned a positive real rate of return on Japanese government bonds for the past 3 decades. A positive
real rate of return on bonds... unheard of in the west.
Your arguments are akin to the following bail me out idea:
Person A followed the herd in an asset price boom and bought an investment portfolio at $100 when it was actually worth $50 or less. Now Person A (and the herd) make arguments to reason why that portfolio should remain valued near $100 and support government policies to keep that portfolio valued near there because a decline would be a bad idea for most people.
Well, who told that person and the herd to go and buy that portfolio at $100 when it was actually worth 50% less? Get over it. No one wants to take responsibility for their decisions and actions. Everyone feels entitled to keeping their gains.
The vast majority of Canadian GDP growth in the past 10 years was due to the mal-investment in Housing. So I get it why people are so sensitive to a price drop. But honestly, get over it. Canadians aren't entitlement to a upward sloping home price environment forever.
