What am I missing?
In 2022 inflation is running at around 5.7%.
Price of everything is going up big time. The government is in a “panic”. I mean not really ’cause most people working for the gov. is probably doing fine. Anyhooo…
The Bank of Canada is raising interest rates, hoping people will stop buying stuff and therefore easing demand and creating a little deflation. They also figure that people will hold on to money with higher interest rates. (I wouldn’t count on that.) Anyhooo…
“They” say a good inflation ratio is about 1.7% a difference of 4 points (see second sentence).
Wages are said to increase 2.5% this year, so inflation with the raise would sit at about 4%-2.5% = 1.5%
My idea is that the Gov. cut federal income tax by 1.5% (for a limited time of course).
That would put the money back into the pockets of people and bring “inflation” down to 1.7%.
Does that make any sense? Asking for a friend.