An Idea To Stimulate The Economy!!!

I have been thinking seriously about some steps that the Canadian Government could take to really stimulate the Economy, especially now that the Stock Market has gone through a real adjustment and the interest rates are low.  Here’s the idea that I would like to float…let Prime Minister Stephen Harper and Finance Minister Jim Flaherty know about it,  although I have it on great authority that they read this blog every day….

Canadians are great savers and have, for years, been building their RRSP’s. Those RRSP (Registered Retirement Savings Plan or 401K) accounts are making minimal interest and are not generating any movement whatsoever. What if the governement allowed each of us a one time $20,000 tax free withdrawal from our RRSP’s/401k’s to put back into the economy in the areas of renovations, housing, appliances, especially energy saving programs…or for that matter, anywhere…

The withdrawal would mean that thousands of dollars would circulate in the economy rather than sitting in RRSP accounts, money would be spent on furniture, appliances, cars, homes and sales taxes would be generated…

I floated the idea at dinner tonight and there was some good excitement. Everyone seems to have a little bit of those untouchable funds and sure could use access to some of it…

Call the Politicians and let them know of your support. Personally I think it is an easy solution to get the Economy moving…however, further ideas would be really appreciated and since Jim and Stevie are reading this blog, they will hear about your ideas too!

3 Responses

  1. M.H.M

    They already declared for the sake of “Real estate $25000 limit you know that.
    I they start giving saving (rrsp) etc. what gone a happend to their RESERVE. WHAT WILL HAPPEND TO FISCAL DEFICIT. THEN THE GOVT. WILL SUPPLY NEW CURRENCY IN THE MARKET”
    AND WHO KNOWS PEOPLE WILL SPEND THIS MONEY, MIGHT SMART PEOPLE DIVERT THIS MONEY TO BIG EARNING PORTFOLIO.

    “IT WILL BE WISE TO CREATE JOB JOBS AND JOBS AND PROVIDE AND PROVIDE INCOME SECURITY”- automatically people will start spending.

  2. Richard Silver Post author

    The $25,000 is great but it is only for “first time buyers” and is just $5,000 more than what was already allowed. The other tax savings are in the form of rebates, so you have to have the money first, then at tax time you will get a rebate.

    The idea I propose with set some lazy money back into the economy for all Canadians and not just first time buyers.

  3. Donald Nadeau

    Wow! I think this is a great idea and the more I think about it the more I think it is a great idea. The amount of $20,000 is a good start.

    The only issue I see is that people would actually take advantage of this stimulus :) and this would leave less money in the stock market. This may not impress the politician with agendas. But I could totally see myself using a portion of my investments that is yielding 1.75% to do some renovations in my home.

    You have my vote. :)

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