OTTAWA — OTTAWA - The Bank of Canada raised its policy interest rate by 25 basis points to 2.5 per cent. It’s the first hike since July 2023. The central bank wants to control inflation by reducing the risk that high fuel prices could spill over and seep into the overall economy.
So are rate hikes good or bad? I need someone to make sense of this! Where’s Jarule?
All the spending growth in the economy is coming from the whales, the top 20%, of earners.
You can charge 2k for an iPhone and they pay it without blinking an eye.
If taxes were raised on the top 20% of earners it would slow their spending and tame inflation.
The chance of this happening is close to 0% so expect more interest rate hikes as it will be the Poor’s who are made to pay.
Raising the Poor’s taxes would do little as they are all buying necessities only at this point. And many are making hard choices about which necessities to go without.
In other words, this is the inevitable outcome of decades of “taxes are bad” religion in politics.