Is the “New Depression” About to Hit Us? Editorial – February 22, 2010 – Cornwall Ontario

We’re very lucky in Canada, but the world today is a very small marble.    When our neighbor to the South bleeds we tend to get splashed.  In Europe now when a country like Greece goes through major economic mess, Germany and the rest of Europe get to help pay for it.

Countries all over the world have tried to spend their way out of the recession.   I use the example of a pool having a leak and the solution tendered is adding the garden hose.     If you shut off the hose or run out of water you still have the leak.

I don’t think things have changed and the leak is still there and getting worse.    The government here in Canada spent billions of tax payer dollars to infuse our strong Canadian banks and failing car companies, but what did they actually do to help Canadians?      We see ad upon ad for the Canadian Economic Action Plan, but I can tell you that as a small company there really isn’t much help available to me.

As someone that visits companies almost every day there’s a scary landscape out there for many.

LINK The New York Times just did a piece about the millions of people who simply will not recover from the recession – New Depression.    They will not recover their financial footing.  Their savings get burnt up, benefits eaten up, and then they are at the mercy of a world without much social net in the US where they end up going without medication and the basics they need to survive.

That’s a scary picture and that’s what happens when the middle class gets whacked.  That’s what happens when firms move their facilities offshore.    A recent example was Hershey Chocolate that shut up its Smiths Falls plant to move to Mexico.  I for one will not purchase Hershey products any longer and suggest others follow suit.   I see many of their familiar brands discounted now in dollar stores which is sad not only for the brand, but for the people whose lives were a part of that brand.

“ of 6.3 million Americans who have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.

Men have suffered the largest numbers of job losses in this recession. But Ms. Eisen has the unfortunate distinction of being among a group — women from 45 to 64 years of age — whose long-term unemployment rate has grown rapidly.

Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.

Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.”

15 million people.  That’s half the population of Canada!    These dear readers are canaries in a coal mine.   Look around you.  Look at your friends and family and think back 5, 10, 15 years about how they worked and how much they made.  Were things better or worse for you and your family financially.

We’re lucky here in Cornwall Ontario.  This city is in a boom mode with many new opportunities rising from the ashes of the former mill town that it was.   But how many of those jobs will be Middle Class and how many are simply working poor positions or part time positions?

Our Federal government recently suggested passing laws that force people to come up with larger down payments for houses because of concerns of a housing bubble.   Is that to protect we the people, or to protect the banks from ending up with foreclosed homes?    For those of us who own a home are we about to lose about 20% of their values as this new law seems to be suggesting?

What do you think Cornwall and Canada?  Feel free to post your comments below.

(Comments and opinions of Editorials, Letters to the Editor, and comments from readers are purely their own and don’t necessarily reflect those of the owners of the Cornwall Free News, their staff, or sponsors.)

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  1. You only touch on Federal. Ontario has become a “have not” province, with health care spending, public service hiring, all day kindergarten, and starting a Commisioner of Language office are costing billions in this province.
    I know French is a touchy subject in this end of the province, but really, why does the government need to get more involved. We all have lived with or beside good people and we seem to get along.

  2. Author

    Eric government gets involved when we have breaches in society. The fact that governments sometimes create those breaches is another issue altogether 🙂

  3. The 20% down rule only applies for property purchases that are not your primary residence–basically, for rental investments. You can still buy your home for as little as 5% down.

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