Inflation is poison and liberals continue to fuel it with spending

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Inflation is a social and political poison. It has destroyed governments, sent nations to war, and brought endless suffering to individuals and families.

Persistent, punishing inflation cannot be allowed to persist, even if it is not out of control – yet.

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The Bank of Canada knows this; therefore high interest rates are maintained.

Canada's Liberal government doesn't know that. They continue their inexplicable, dangerous rush to increase debt and buy votes with money.

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This will judge the real crisis. Governments that print and spend far above the rate of GDP growth fuel uncontrolled inflation.

Today's annual rate of inflation is 2.9 percent. Liberals describe this as progress, but don't be fooled. That's much more than you paid for goods and services last year.

Inflation in 2020 was modest, below one percent. It increased by 3.4 percent in 2021, 6.8 percent in 2022, and 3.9 percent in 2023.

And now it is 2.9 percent.

That's 17 percent compound annual growth over five years, with no end in sight.

At retail locations in Calgary, the official rate appears to be much lower than the reality.

Food prices are soaring. My wife and I bought a little taste of Shropshire cheese last week. We thought the clerk said the cost was seven dollars.

But we heard wrong – we actually paid $17, an absurd amount for a small piece of cheese. We may frame it as the most valuable thing we own.

In too many stores, customers are given a tip choice of more than 12 percent and a tip of more than 25 percent.

Long-term customers are supplementing wages that employers can't or won't pay.

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Average hourly wages in Alberta have fallen 4.4 per cent over the past five years.

One reason for this, as we have heard, is weak investment. Much of this problem stems from federal efforts to curtail oil and gas exploration and production in the province.

Albertans were Canada's highest earners in 2019, 13 per cent above the national average. This advantage is now down to six percent.

At this rate, in a few years we will be eligible for equalization payments.

Liberals are slowly suffocating the golden goose of equalization and don't seem to care.

The UCP government added to its burden by levying an additional four cents per liter of gas on the same day Ottawa raised the carbon tax.

Pierre Polievre, leader of the federal Conservatives, understands the politics of it all. He always knows how to solve his case fundamentally.

Polievre is calling for Ottawa to end the carbon tax on gasoline and diesel from this weekend until Labor Day. It is called summer vacation relief.

Of course, experts immediately condemn this and claim that a carbon tax will not increase inflation. Really? Isn't raising prices inflationary?

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We had bad inflation in Canada, especially in the mid-1970s when rates were as high as 11 percent.

This led Prime Minister Justin Trudeau's father, Pierre, to impose so-called wage and price controls in 1975.

(In the US, then-President Richard Nixon did something similar, but less invasive).

Liberals have built themselves a nice bureaucracy to exercise tight control.

The effect on the price is likely to be insignificant. Several provinces left the regime before it ended in 1978.

But wage and price controls were the perfect preparation for the Liberals' next centralization move, the National Energy Program of 1980.

Justin Trudeau shudders at the thought of taking such steps late at night to dispel the belief that the Liberals don't care about affordability.

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Terrific. It is better to limit yourself. They won't.

A short list of some of the worst inflationary crises:

• Argentina last December: Inflation rate 211 percent, 40 percent of citizens living in poverty.

• Venezuela in 2018: Inflation at 929,790 percent, partly driven by wild money printing.

• Weimar Germany, 1923: Inflation rate 29,500%, prices doubled every 3.7 days. The year Hitler was beaten in a beer hall.

• Greece during the German occupation, 1944: Interest rate 13800%.

• Hungary, July 1946: Interest rate 41.9 quadrillion percent (a quadrillion is 15 zeroes.)

Don Braid's column appears regularly in the Herald

X: @DonBraid

We know that the rising cost of food, mortgage, rent and electricity is a serious issue for many Calgarians trying to provide for their families. In our special series Compressed: Navigating Calgary's High Cost of Living, we take an in-depth look at Calgary's affordability crisis. We've crunched the numbers, distributed reports and talked to experts to find out how inflation is affecting our city and what's being done to bring prices back down to earth. But most importantly, we talked to real families who shared their stories and challenges with us. As these stories spread, we hope you'll join the conversation.

Still to come:

May 21-23 – Scrimping and Saving: Food Security in Calgary
May 27-30 – Price: Increase in housing costs
June 3-4: Cost of Doing Business

Our series so far:

Feeling the pain of Calgary's cost of living? Tell us how you manage
Calgary's affordability advantage is gone
Squeezed: Adults stay with parents, stretch dollars and pool resources

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