Thread by @JimboStanford

Mr. Poilievre is resuscitating COVID-era arguments that inflation is a 'tax' (caused by Justin Trudeau's deficits and Tiff Macklem's ATM), and that he can 'cancel the tax' with federal spending cuts. Here are the top 4 reasons his economics are all wrong: #cdnecon #cdnpoli /2

1. International Comparisons: Post-COVID inflation was a global phenomenon, affecting almost all countries, with no correlation to deficits or government spending. Canada's inflation since 2019 has been relatively mild, well below the US and the OECD average. /3

2. Timing: The federal deficit (huge during COVID lockdowns) was approaching balance (in national accounts terms, which is what matters for macroeconomics) by the time inflation accelerated in latter 2021 and 2022. Purported 'excess demand' from CERB benefits was long gone. /4

3. Supply Chains: Poilievre ignores the key spark for post-COVID inflation: unprecedented disruptions in supply chains (health restrictions, transport problems, shortages of key commodities). They eased by late 2022 (and inflation then fell quickly), and are in good shape now. /5

4. Profits: Predictably, Poilievre also ignores the role of record profits in accelerating inflation. Corp. profits reached an all-time high as a share of 🇨🇦 GDP in 2022, coincident with peak inflation. Profits have since moderated, coincident with slowing inflation. /6

The unique problems that caused post-COVID inflation (in 🇨🇦 and most countries) in 2021 & 22 have normalized. Poilievre's claim that increases in federal capital spending of the scale proposed by Mr. Carney (1.5% of GDP) would bring back rapid inflation, is not credible. /7

And Poilievre's claim that he can 'cancel' inflation through fiscal austerity is dangerous. Canada's likely heading into a recession thanks to Trump; spending cuts would make it worse. He's scapegoating government for a crisis that was part pandemic, part private sector greed. /8

For a review of the true causes of inflation, a refutation of false scapegoats, & an overview of better solutions to challenges in living standards (like higher wages, non-market housing, limits on corporate power) see the Centre for @futurework_cda video: