Our economy has four major movers. Our biggest problem is none of them is moving very quickly.
The problem was reflected in the preparations for last week's federal budget. Jim Flaherty, the federal finance minister, said he was worried about the fragility of the global economy, particularly the debt and deficit situation in the United States.
He's not the only one. Last week, the S&P/TSX, Canada's benchmark stock index, closed at its lowest point since late January, wiping out all the gains of the year to date.
The market was bothered by unsettling developments in four of our largest economic movers: domestic consumer sales, exports, business and government.
Domestic consumers were a mainstay of the economy during the 2008-09 recession. But late in May, Statistics Canada reported they had contributed only 0.1% to Canada's economic advance in the first three months of this year.
Consumer-spending variables are at all-time highs, Derek Holt, vice-president of economics at Scotiabank, told The Canadian Press. He cited 70% home ownership rates and all-time highs in inflation-adjusted consumer spending, house prices, leverage and home-renovation spending.
"Every single variable one can think of in the household sector is at a record high," he said.
Export markets are also experiencing difficulties. In the European Union, Greece is teetering on the brink of bankruptcy. America is plagued by unemployment. In May, American employers added only 54,000 jobs, the weakest showing since October 2010. The unemployment rate rose to 9.1%, the second monthly increase after dropping to 8.8% in March.
Canada's unemployment rate remains high at 7.6%, down about one percentage point from the recession peak in August 2009.
As well, America, which buys three-quarters of Canada's exports, has major problems with reducing and refinancing its record deficit.
As might be expected, many businesses, given the upset in domestic and export markets, are sitting on a pile of money and not investing in many new ventures.
That leaves government. Ottawa, in its recent budget, says it plans to cut spending, hoping its reduced deficit will spur others to start moving again. But if that policy doesn't succeed, government cutbacks could hurt, not help, the economy.
For the moment, then, our economy's big movers sit like four frogs on a log -- each waiting for the others to move.
A new bestseller on the New York Times' e-book list says the economic problems in North America may be more profound than many people think.
In the Great Stagnation, Tyler Cowen, who has a PhD in economics from Harvard University and is a chair of economics at George Mason University in Fairfax, Va., says our economies have consumed all the "low-hanging fruit."
They include free land, technological breakthroughs and educating smart kids. We might be done growing for a while, he says. Yet, North America, Europe and Japan have all built political and social instructions on the assumption of endless growth.
The last recession came about, he adds, because "we thought we were richer than we were."
The Liberals ducked the Great Depression in 1930 and left it in the lap of Tory prime minister R.B. Bennett. Prime Minister Stephen Harper's job is to make sure history doesn't repeat itself.
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