Canada can do. -----US not so much?

[Guest Peeves]

http://online.wsj.com/article/SB10001424052702303816504577319743650637600.html

Canada Beats America

And we don't mean in hockey. Try taxes, spending and energy.

Not too many years ago, Americans could get away with cracking jokes about spendthrift Canada, its weak dollar and the long wait for MRIs. These days, the joke is on Americans, as Canada's government has cleaned up its fiscal mess and focused on private economic growth.

The governing Conservative Party took another step forward last week with a pledge to balance the budget by 2015 without raising taxes. That's a year later than Prime Minister Stephen Harper pledged on the stump in 2011, but it sure beats America's four consecutive years of deficits of $1.3 trillion. Canada's federal debt as a share of GDP is forecast to fall to 28.5% in 2016–17 from 33.8%. Add in state debt and that number is closer to 66%, but the trend is in the right direction, while America's is heading toward 70% and rising.

Canada's progress isn't a political accident. Our northern neighbor has been liberalizing since the mid-1990s, under politicians of the right and left, and through better policies it dodged the government-supercharged housing boom and bust that sent the U.S. into recession.

Provincial governments led the intellectual way. Alberta's Ralph Klein in the 1990s cut taxes, slimmed government and created a stable investment climate. Saskatchewan's socialists, British Columbia and Ontario reformed too. The Harper government took power in 2006 and started to cut taxes, trim government employment and clinch free-trade deals. Canada's corporate tax rate is now 15%, compared with America's 35%.

Finance Minister Jim Flaherty explained that policies to "raise taxes, increase government spending, and shun new trading opportunities" would "kill jobs, impose crushing deficits, and cripple our economy." He will not be President Obama's next Treasury secretary.

Overall federal spending will continue to rise, but at a slower pace. Most notably, the budget proposes to raise the eligibility age to 67 from 65 for Old Age Security, starting in 2023, and it will also allow retirees to voluntarily defer benefits if they want to receive a higher payout later. A later retirement age, phased in over time, is precisely the kind of reform that the U.S. needs for Social Security and Medicare.

The budget also treats Canada's energy resources as national assets to be exploited—with as few delays as possible. Thus the budget proposes to eliminate overlapping federal and provincial environmental reviews for major projects. It proposes firm review timelines, including for projects that are already underway, such as the Northern Gateway pipeline from northern Alberta to the Pacific coast. Mr. Flaherty's catch phrase is "one project, one review." Contrast this with the multiple reviews that have stymied the Keystone XL pipeline from Canada and North Dakota's Bakken Shale to the Gulf Coast.

As America's recent performance proves, the wealth of a nation isn't guaranteed. Canada shows how mistakes can be reversed with sound policies.

A version of this article appeared April 4, 2012, on page A14 in some U.S. editions of The Wall Street Journal, with the headline: Canada Beats America.

Join the discussion 147 Comments, add yours

http://www.billcasselman.com/casselmans_canadian_words/ccw_seven.htm

Interesting to Americans?

The motto of Canada, official since 1921, was suggested as early as 1866 by Sir Samuel Tilley, New Brunswick politico, and a father of Confederation. He drew it from the Old Testament, Psalm 72. In St. Jerome’s Latin version of Holy Writ, called the Vulgate, the passage reads “et dominabitur a mari usque ad mare.” The King James translation is “and he shall have dominion also from sea to sea.”

As nitpickers, we may note Elizabethan scholars mistranslation of the Latin adverb usque as ‘also.’ It is a particle placed before the preposition ad to give a kind of poetic emphasis to the meaning of the preposition. This results in the more appropriate rendering into English of ‘from sea yea onto sea’ or ‘from one sea all the way through to another sea.’ Not better English but a better sense of the Latin.

Based on the same Biblical passage, Tilley said the new country should be not the kingdom of Canada, but rather the Dominion of Canada. And so it became in the text of the British North America Act.

[Moonlight Graham]

Our northern neighbor has been liberalizing since the mid-1990s, under politicians of the right and left, and through better policies it dodged the government-supercharged housing boom and bust that sent the U.S. into recession.

Yet we didn't liberalize to deregulate our banking and financial system, which helped save our housing market and economy overall from repeating the aforementioned US housing boom/bust.

[bush_cheney2004]

....Interesting to Americans?

Sure...thank you for reminding us that Canada went tits up over 20 years ago and is doing much better now. The Americans get to play the same game but on a much larger scale and credit limit. And if America fails, Canada will still (smugly) go down with it because of economic integration, eh?

[Michael Hardner]

On the topic of smugness.... there are a lot of things we can do much better. I sometimes shudder to think that we're somehow the paragon of good governance in the western world...

[Topaz]

Yet we didn't liberalize to deregulate our banking and financial system, which helped save our housing market and economy overall from repeating the aforementioned US housing boom/bust.

Didn't Harper want to do that though when he was in opposition?? He should thank the Liberals for NOT doing it.

[Guest Peeves]

Didn't Harper want to do that though when he was in opposition?? He should thank the Liberals for NOT doing it.

Canadians should thank Paul Martin for his monetary policies every day. He probably above all saved our Canuck bacon.

But, Harper's governing financial policies since the economy shit hit the fan have been fiscally sound..well except for the G-8 , G20 etc. cost fiasco.

[Smallc]

But, Harper's governing financial policies since the economy shit hit the fan have been fiscally sound..well except for the G-8 , G20 etc. cost fiasco.

It came in under budget. What was he supposed to do? Pull out of the organizations?

[dre]

It came in under budget. What was he supposed to do? Pull out of the organizations?

That might not be a bad idea... or at least push those organizations to operate in a way thats more sustainable. 80% of what goes on there could be done on the phone, and keep in mind most of these countries are flat broke.

We oughtta have a national debate on whether or not its in our best interests to be in all these expensive internalional clubs (UN, NATO, G8, G20, etc). Its possible that money could be better spent elsewhere.

Im also worried about this new political class thats this global associations is producing. They treat themselves VERY VERY VERY well, and rarely seem to consider cost at all. As the west moves toward an era of austerity, people are going to notice that these people are having champagne and caviar and throwing lavish billion dollar parties for themselves, while we are being asked to tighten up our belts.

[jbg]

Yet we didn't liberalize to deregulate our banking and financial system, which helped save our housing market and economy overall from repeating the aforementioned US housing boom/bust.

That was a good thing. I am not in favor of deregulating a sector that is so integrally bound up in public confidence that the government will get involved in a bailout. I am against "heads I win tails you lose", or "socialism for the rich".

[jbg]

We oughtta have a national debate on whether or not its in our best interests to be in all these expensive internalional clubs (UN, NATO, G8, G20, etc). Its possible that money could be better spent elsewhere.

I think most of these multilateral organizations are worthless. Especially the U.N. and the G-20.

The G-5 was fine but the G-20 is too unwieldy to have much effectiveness.

[Guest Peeves]

It came in under budget. What was he supposed to do? Pull out of the organizations?

I was mainly opining on A) the venue..too tough to provide security in mainstream Toronto. Should maybe have used the Ex. Grounds?

And the perks Clement got. " parliamentarians need to get to the bottom of a scheme that deliberately obscured how and why tax dollars intended for border security went to gazebos, bathrooms and new sidewalks nowhere near the G8 summit site in Huntsville, Ont.

An auditor's report in June found no rationale for why the 32 projects were funded, nor even why the government settled on $50 million in funding when previous summits had spent only about $5 million on site upgrades."

Surely these 'meetings' could be held with conference calls saving billions.

[Smallc]

I was mainly opining on A) the venue..too tough to provide security in mainstream Toronto. Should maybe have used the Ex. Grounds?

So far, the G20 has always been held in a major city. If the G20 had been planned when the G8 originally was (it wasn't prominent then) the cost would have been lower for only 1 venue.

And the perks Clement got. " parliamentarians need to get to the bottom of a scheme that deliberately obscured how and why tax dollars intended for border security went to gazebos, bathrooms and new sidewalks nowhere near the G8 summit site in Huntsville, Ont.

An auditor's report in June found no rationale for why the 32 projects were funded, nor even why the government settled on $50 million in funding when previous summits had spent only about $5 million on site upgrades."

I agree with that. Tony Clement, I think, should have been put on the back benches a long time ago.

Surely these 'meetings' could be held with conference calls saving billions.

They aren't, so deal with it. We either have to shell out the money, or pull out of the organization. Besides, research shows that face to face meetings result in far more than teleconferencing.

[dre]

So far, the G20 has always been held in a major city. If the G20 had been planned when the G8 originally was (it wasn't prominent then) the cost would have been lower for only 1 venue.

I agree with that. Tony Clement, I think, should have been put on the back benches a long time ago.

They aren't, so deal with it. We either have to shell out the money, or pull out of the organization. Besides, research shows that face to face meetings result in far more than teleconferencing.

You seem to have naked contempt for any type of spending restraint what-so-ever... Not suprising because you grew up in the era of limitless money. But that era is drawing to a close, and folks in the west are in for a major wakeup call. This global political class that spends thousands of dollars on hotel rooms, and throws gigantic lavish parties for itself is in for a hell of a wake up call to.

Edited April 13, 2012 by dre

[Smallc]

You seem to have naked contempt for any type of spending restraint what-so-ever...

You obviously don't know me then. On anything other than travel, and my car, I don't spend a single cent that I don't have to. I think government should do some things, and not do other things. Governments need to interact, foreign affairs needs to be conducted, treaties need to be signed. These are things governments should do. They shouldn't be doing some of the other things they do.

Now, that doesn't mean that they shouldn't try to spend less money when they do things, but, the cost is going to be large no matter what, if we want to remain a part of these organizations (I know you don't, but the governments that we've selected do, so you're going to have to either I've with it, or move somewhere that doesn't want to).

Not suprising because you grew up in the era of limitless money. But that era is drawing to a close, and folks in the west are in for a major wakeup call. This global political class that spends thousands of dollars on hotel rooms, and throws gigantic lavish parties for itself is in for a hell of a wake up call to.

So you say. We'll see.

Edited April 13, 2012 by Smallc

[dre]

You obviously don't know me then. On anything other than travel, and my car, I don't spend a single cent that I don't have to. I think government should do some things, and not do other things. Governments need to interact, foreign affairs needs to be conducted, treaties need to be signed. These are things governments should do. They shouldn't be doing some of the other things they do.

Now, that doesn't mean that they shouldn't try to spend less money when they do things, but, the cost is going to be large no matter what, if we want to remain a part of these organizations (I know you don't, but the governments that we've selected do, so you're going to have to either I've with it, or move somewhere that doesn't want to).

So you say. We'll see.

You are already seeing it. Governments across the west are broke, and they are already cutting services, and desperately easing. This easing already caused a major global financial meltdown, and prolonged interest rates near 1% are inflating the next bubble as we speak.

(I know you don't, but the governments that we've selected do, so you're going to have to either I've with it, or move somewhere that doesn't want to)

Actually I never really said that I didnt. What Iv said is that we should take another look at these things, and do a cost/benefit analysis on whether or not that money might benefit us elsewhere. And like I said before Im worried about the privileged international political class that is emerging as a result of all this globalism, and how powerfull it might get.

I see a trend away from the traditional sovereign nation state, and Im not sure thats such a good thing.

[Smallc]

You are already seeing it. Governments across the west are broke,

Our's isn't. A few years of deficits doesn't mean that we're broke. The Bank of Canada is not yet ready to step in, because they don't see credit as yet being at a crisis level, nor does Flaherty. They're already said that they'll act, if they see it becoming a problem. That said, I don't like all the debt, and within one year, my debt, not including my car, will be gone for the most part (maybe a couple thousand left).

Actually I never really said that I didnt. What Iv said is that we should take another look at these things, and do a cost/benefit analysis on whether or not that money might benefit us elsewhere. And like I said before Im worried about the privileged international political class that is emerging as a result of all this globalism, and how powerfull it might get.

I can understand your concern. I'm not sure how we could really calculate such things. I'm pretty positive though that we get more than $1B every few years from our world involvement.

I see a trend away from the traditional sovereign nation state, and Im not sure thats such a good thing.

In the lone run, countries will probably and hopefully be a thing of the past...in the very long run.

[dre]

You obviously don't know me then.

Well I know what your words say, and in this thread and ongoing threads about the F-35 you show an almost flagrant disregard for cost. Your big problem with the F-35 project is that they arent spending twice as MUCH money.

Governments need to interact, foreign affairs needs to be conducted, treaties need to be signed.

Theres no need for all those people to fly first class and stay in thousand dollar hotel rooms. And theres no reason to have these meetings in places where security costs a zillion dollars either. And a huge ammount of this activity absolutely COULD be done through things like teleconferencing. The government is years behind the curve on this as usual, and private sector entities have been leveraging this technology more and more for years.

They should fly coach, and stay at the holiday inn.

[dre]

In the lone run, countries will probably and hopefully be a thing of the past...in the very long run.

That would truly be a disaster, and the outsourcing of a nations politics will lead to nothing besides violence and nationalism. Thats precisely why Europe is on fire right now.

[dre]

Our's isn't. A few years of deficits doesn't mean that we're broke.

Actually thats EXACTLY what the literal definition is. Governments run defecits because after all the money they have collected in revenue is gone, they have no more money to pay their employees and provide public services, infrasture etc.

[Smallc]

Well I know what your words say, and in this thread and ongoing threads about the F-35 you show an almost flagrant disregard for cost. Your big problem with the F-35 project is that they arent spending twice as MUCH money.

A country needs an adequate defence infrastructure. The government is obviously convinced that 48 jets is enough....I hope so.

Theres no need for all those people to fly first class and stay in thousand dollar hotel rooms. And theres no reason to have these meetings in places where security costs a zillion dollars either. And a huge ammount of this activity absolutely COULD be done through things like teleconferencing. The government is years behind the curve on this as usual, and private sector entities have been leveraging this technology more and more for years.

And still, there are studies that show teleconferencing to be far less useful.

They should fly coach, and stay at the holiday inn.

They shouldn't be flying on passenger jets at all.

[Smallc]

Actually thats EXACTLY what the literal definition is. Governments run defecits because after all the money they have collected in revenue is gone, they have no more money to pay their employees and provide public services, infrasture etc.

But we don't have a structural deficit. There's a difference.

In the very long run, I don't see the benefit of having people segregated by nationality. Again, the world is not ready for that, and probably won't be for a long time.

Edited April 13, 2012 by Smallc

[dre]

But we don't have a structural deficit. There's a difference.

In the very long run, I don't see the benefit of having people segregated by nationality. Again, the world is not ready for that, and probably won't be for a long time.

No there isnt. The government either has to borrow money to pay employees or it HAS the money. So you site "projections" about when we "might" have the money from economists and pundits, but the reality is they have no idea what is going to happen in the global economy. These are the same folks that talked about how great everything was before the last global recession.

[Smallc]

No there isnt. The government either has to borrow money to pay employees or it HAS the money. So you site "projections" about when we "might" have the money from economists and pundits, but the reality is they have no idea what is going to happen in the global economy. These are the same folks that talked about how great everything was before the last global recession.

Our economy was great before the last recession. In general, except for an overly hot housing market in three cities, it still is. The projects of deficit elimination are now in the predictable range of between two and three years - well within reason to be believed.

[Michael Hardner]

In the very long run, I don't see the benefit of having people segregated by nationality. Again, the world is not ready for that, and probably won't be for a long time.

Hear, hear. The fact is that borders are quietly falling in many meaningful ways.

[dre]

Our economy was great before the last recession. In general, except for an overly hot housing market in three cities, it still is. The projects of deficit elimination are now in the predictable range of between two and three years - well within reason to be believed.

Actually its not just three cities, we have the 3rd most overvalued realestate market in the world, combined with large inventories stagnant wages, and lower personal savings rates than ever before. This is a very dangerous set of conditions. It doesnt necessarily mean we WILL have a major economic blow out, but it means we are very vulnerable towards one.

This should be really easy for you to understand. All this easy credit has moved consumption that would have happened a few years from now, to today. We have essentially borrowed consumption from tomorrow in order to have an artificially strong economy today. That unescapably means there will be a lot less consumption in the future, because people will get to appoint where they refuse to borrow money even with the discount window wide open.

And keep another thing in mind. Theres no real difference between public and private debt. The government can stimulate the economy either directly, or buy pegging rates at near zero, and letting consumers borrow the money into the economy. So you have to considered BOTH record defecits at the federal level, AND at the household level.