US Fears of a Double Dip recession are slowly changing into a reality. Based on Data launched on Housing, Employment, construction and manufacturing it is becoming quite clear that things will more likely get worse earlier than they get higher with the world’s largest economic system facing an enormous uphill battle.

One of the principle indicators is housing sales which had a 30% month over month decline which occurs to be the most important on record. US Unemployment numbers spiked month over month as nicely so the employment market will remain below stress for some time.

The restoration we thought we had was not accompanied with job growth which is required for long term growth. A jobless recovery is not practical or possible and the stimulus spending has completed nothing more than create a brief term recovery. With western governments making ready to tighten their spending and reduce deficits the economy has a chance to stay stagnant, however more than doubtless will decline.

What does all this mean for Canada, a country that has done relatively well during this disaster and subsequent recession. Well historical past can tell us that Canada is usually one to 2 years behind the US since most of our exports go to the US. If this assumption is true then Canada has not likely hit the bottom yet. So further economic declines will preserve inflation low with a interval of deflation possible. Giving the Bank of Canada no cause for to lift rates in the short time period with very modest will increase possible in the foreseeable future.

One might argue that Canada will find different trading companions and while that’s true it is not going to happen in a single day and even the opposite trading companions are facing similar challenges. Did we not prove within the financial crisis that when the US sneezes the world catches a cold?

So with nearly all of the western hemisphere in decline and China feeling slowing pressure on their economic system which many nations hoped that China will lead the world out of this recession, it is foolish or naive to assume that Canada can go on with out feeling the effects of the remainder of the world.

If housing prices begin falling as predicted it’ll only delay the recession because housing has the only biggest psychological effect on customers and when house costs go down spending goes down and financial savings go up.

Canada should cut deficits which have already wiped out ten years of repayments in one year and with an aging population of two million climbing to ten million within the next decade it is hard to think about how they can do that when they barely completed debt repayments at the best of times. Are we actually that far behind Greece?

Hind sight is all the time 20/20, but it will have been good for our flesh pressers to pay down more debt when they were over taxing us and running huge surpluses as an alternative of going on spending sprees.

The only way the government will accomplish the needed reductions in debt is to slash spending on authorities programs, advantages and in the end tax increases. My biggest concern is they often go for the tax will increase first because it is easier to deal with the public than take care of the public sector unions. Once again putting strain on our buying power which does not help the economic system one bit.

Have we not already seen some tax will increase (HST)? As a Canadian we all must participate in correcting this mess which will result in short term pain for long run gain but most of all we should hold our politicians responsible for the mess they created and demand more long run vision and accountability.

We must stop frivolous government spending, corporate welfare and funding special interests groups that don’t represent or benefit the masses. We should demand that government sector staff pay and advantages stay in step with what’s going on within the private sector and solely then will this disconnect between the 2 stop.

This entitlement that society feels mixed with I should have it now thinking, short term vision and the idea that it may possibly go on eternally is what introduced us right here today. It will get better and if everyone takes some responsibility the world can be a higher more responsible place.

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