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A Free Dogwalker? I'm In

Free Pharmacare, Free Dentalcare. If they throw in Free Dog Walking and Free Lawn Cutting, I am in.

The Liberal Party in Canada, which holds power through a minority position, secured control of Parliament until 2025 through an alliance with the New Democratic Party. (NDP) The tease is that the NDP wants to see free Pharmacare and free Dental offered to all Canadians. Why stop there? Free income, free dog walking services and free lawn care.

I Mean Free is So Enticing

Last year, I chatted with Dan Ariely, the James B Duke Professor of psychology and behavioural economics at Duke University. He is a best-selling author and has over fifteen million views for his TED Talk and his partner Kelly Peters. Together they founded BE Works based in Canada, a management consultancy and advanced research applying Behavioral Economics for Fortune 100 companies and governments worldwide. Listen now.

According to Dan Ariely in his book 'Predictably Irrational', people change their behavioural patterns and are more willing to comply when something free comes along. Free isn't just an indicator of price. It's a powerful emotional trigger that's often so irresistible that it makes people lug home useless key-chains and buy pants too tight to get an extra pair at no cost.

The entire appeal lies in the principles of reciprocity, where one feels obliged to return the favour bestowed on them by complying with the others. According to Ariely, reciprocity is a powerful instinct. So, when a brand does something to its customers, they feel strongly obliged to do something for them.

Costco built their business on free samples. Many marketers and retailers rely on BOGO's - buy one and get one free, to drive sales and luxury retailers are happy to give you a free gift as a reward when you spend $500 or more.

Free works inside the marketplace, and it works equally well inside ballot boxes. Maybe even more so as the voter is more disconnected from the commerce. Let me explain.

When you come home with that buy one and get one pizza or t-shirt, or the credit card bill attached to that luxury retailer, or even a 60-inch screen you didn't need but couldn't turn down as you chowed through Costco, you still had to reach into your pocket.

'Voters don't connect the 'free' offered by their governments to their wealth. They don't personalize the debt.'

Voters don't connect the 'free' offered by their government and all the taxes and borrowed dollars that come with having to fund these policies to their wealth. Consumers feel the pain of their debt and their overspending, but they don't feel the same way about their country's deficits or debt. They don't personalize it.

So when a political party offers free this, it becomes so blinding in its appeal that it distracts you from the realities. Here is the truth.

One in three Canadians are blowing through their monthly paycheck.

One in three Canadians is blowing through their paycheck month to month. Right here and now, many Canadians are suffering from runaway inflation, higher taxes, personal debt and rising interest rates and a weak economy. Add the damage caused by a virus that became a two-year jackhammer to our psychology, uncertainty, and small business economy.

This is the perfect time for the Liberal and NDP coalition to tease Free pharmacare and Dentalcare, knowing that the Conservatives, their opposition, are in an even weaker state as they are looking for a new leader.

And mark my words, the coalition will bring these policies to life using the Robin Hood narrative of robbing the rich to fund the poor. The NDP will gladly play the role of proclamations without fiscal explanation to maintain some sense of independence, while the Liberals less so, as they want to preserve their relationship with their partisan supporters.

I think it's time that we encourage voters to personalize the debt that has been piled on provincially and federally, before, during and after the pandemic.

I have these thoughts:

We might die with our teeth cleaned for free, but we are picking our youths future clean.

Increase financial literacy, especially with our youth. We need to have an honest conversation with every Canadian under the age of forty and show them why they and all the following generations have signed up for a lifetime of paying growing interest payments. We might die with teeth cleaned for free, but we are picking their future clean. McGill University in partnership with RBC Future Launch offers a free financial literacy course. I would encourage every voter, and frankly, all who work in the public sector to take this course.

Grow our economy by unlocking our natural resources.

Foster economic growth. As economies grow, Debt to GDP ratios fall, and even modest economic growth can make a difference. If inflation and growth are both 1.5%, nominal GDP would be third higher after only a decade. For Canada, this means unlocking our natural resources and providing our allies with a safe source of energy and food.

Austerity budgets sadly never sell.

Cut the cost of government, which is a strategy that will never happen as austerity budgets never sell. And in the past five years, the only real growth has been by increasing the size of the government. Add to that an aging population and all that comes with fewer taxes generated and more health care costs incurred.

Business without borders, and business in the clouds means a flight to lower taxes.

Higher taxes are easier said than done. With more businesses reliant on the cloud versus borders, there will be a flight of capital and entrepreneurs from high-taxed regimes.

Inflate away the debt. Inflate away our purchasing power

Inflate away the Debt. High rates of inflation reduce the actual value of what you owe. In 1971 the inflation rate was 24%, and the National Debt plummetted from a postwar high of 250% to 50% by 1975. Imagine the pain caused by this strategy as so many voters live paycheck to paycheck and with mortgages they can barely afford at today's low-interest rates. And the public service pensions, backed by taxpayers and fully protected against inflation, would create a tsunami of Debt.

So What's the Answer?

Teach the youth that nothing is free in life, including government programs. Especially legacy one likes free dental and pharmacare or universal income. Stop increasing the size of government. Grow our way forward, not borrow our way there. Unlock our natural resources and provide our allies with the energy and food they need in the most environmentally friendly way. Provide incentives to keep entrepreneurs in Canada and attract others from around the world.



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