Government overspending leads to a weak economy

The conclusion of the holiday season also marks the beginning of the Snowbird season in this part of the world.

Winter vacations have become a staple of Prairie life, so much so the airlines put on direct flights to sun destinations for the season. But this winter is going to cause some pain in the pocketbook as the Canadian dollar falls below 70-cents US for the first time in five years.

In large measure, the value of a nation’s currency is also a measure of its economic condition. And ours is weak.

Over-spending by government, especially at the national level, is chief among our ailments. The latest deficit numbers came in $20 billion over expectation. And then there’s interest rates. We are suffering from what is known as divergence.

Ours is falling. The American rate is rising and diverging from ours. That’s because the American economy is strong, ours is expected to show negative growth when November’s numbers come it. So global investors are drawn to the US while avoiding us, reducing demand for our dollar which, in turn, reduces its value.