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Canadian govt spending vs US


HistoryBuff44

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Just thought id throw a quick comparison out there.

A couple quick facts:

Canada is roughly 1/9 the population of the US.

Our economies are quite similar in that we both have roughly 65% employed in services and 25% in manufacturing.

Now just today Bush tabled a budget (though it most likely wont get passed) of 2.9 trillion, with 624 billion going to the pentagon. If you were to compare that to Canada we would have a budget of 321 billion in spending with roughly 69 billion going to the military.

Our last budget had a total spending of 212 billion, taken to the US level it would be 1.908 trillion. That difference seems staggering to me. Sorta brings into perspective our arguing about increases in spending and taxes. Americans sooner or later are going to have to get used to the idea of tax increases.

I figure it makes canada look like a pretty good place to be right now. It is said that in the end 50% of our money goes to the government in one form of tax or another. I wonder the rate is for the US??

Any comments ladies and gents?

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The US GDP per capita is considerable higher so your numbers are all off. It's impossible to compare dollar for dollar when our dollars aren't the same, nor is our economic output per capita.

Being said, the US has a military spending problem. The Canadian government has a cradle to grave welfare problem. Both need to be addressed.

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The US GDP per capita is considerable higher so your numbers are all off. It's impossible to compare dollar for dollar when our dollars aren't the same, nor is our economic output per capita.

Being said, the US has a military spending problem. The Canadian government has a cradle to grave welfare problem. Both need to be addressed.

i agree on the cradle to grave welfare problem.

and the thing is its not even how much more money we through at things like health care, but the fact that the system is so inefficient and the politicians think the answer is to keep throwing more money into it and the problem will solve itself.

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The US GDP per capita is considerable higher so your numbers are all off. It's impossible to compare dollar for dollar when our dollars aren't the same, nor is our economic output per capita.
Total government spending as a percentage of GDP is the relevant stat. Canada's is about 38% and falling the US is about 30% and rising. Sometime in the future Canada's gov't spending as a percentage of GDP is likely going to be less than the US if current trends continue.

Say what you like about Canada's social welfare system but Canadians have elected and re-elected gov'ts that have kept a reign on gov't spending as a whole even if they don't touch many of the programs that you dislike.

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Where did you get 38%? Last time I checked it was 33%.
I could not find up to date figures - 33% sounds reasonable and simply re-enforces my original point that it is wrong to claim that Canadian gov'ts have a spending problem. Whatever problem that existed in the past is under control when you compare Canada to its peers in the OECD.
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Where did you get 38%? Last time I checked it was 33%.
Is that federal government or consolidated government (all levels combined)?

Does that include transfer payments (and interest on the debt) or merely government purchases of goods and services?

Excepting the war years, Canadian governments steadily increased their take of GDP from 1926 to 1996 - from 9.3% to 20.1% - in addition to regulating all manner of private transactions and transferring various sums from Individual A to B and back to A.

Table.

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Excepting the war years, Canadian governments have steadily increased their take of GDP since 1926 - from 9.3% to 20.1% - in addition to regulating all manner of private transactions and transferring various sums from Individual A to B and back to A.
You table is out of date - in the last 10 years total government spending as a percentage of GDP has been falling. The only question is how much it has fallen.
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You table is out of date - in the last 10 years total government spending as a percentage of GDP has been falling. The only question is how much it has fallen.
The Fraser Institute calculation is difficult to do and I'm not aware of anyone who has done it since their report. In any case, it is the broad trend that matters and I'll wait until 2020 before saying that government purchases of GDP have really plateaued.

Governments as we understand them are a creation of the 20th century. They perform badly the role assigned to them and I have no doubt that they will not exist in a century or two.

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Excepting the war years, Canadian governments have steadily increased their take of GDP since 1926 - from 9.3% to 20.1% - in addition to regulating all manner of private transactions and transferring various sums from Individual A to B and back to A.
You table is out of date - in the last 10 years total government spending as a percentage of GDP has been falling. The only question is how much it has fallen.

Inflation was around 3% for Canada this year, government spending increased 5% looking at consolidated figures. I think your assumption is wrong, currently government spending is skyrocketing.

http://www40.statcan.ca/l01/cst01/govt48b.htm

According to this, total government expenditures and transfers far excede inflationary growth.

According to this: http://www40.statcan.ca/l01/cst01/econ70a.htm

Canada's GDP at 3rd Q 2006 was ~$1,099,000,000,000. With ~$546,000,000,000 in government spending at all levels, you've really got to wonder where these stats are coming from.

Spending is WAY out of hand in Canada. We're going to destroy our economy by no longer being able to keep up with the tax decreases everywhere else in the world.

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Spending is WAY out of hand in Canada. We're going to destroy our economy by no longer being able to keep up with the tax decreases everywhere else in the world.
Your stats are wrong.

I pulled the total GDP from the stats can website and used your expedenture numbers:

I get the follow trends:

2002 2003 2004 2005 2006

1,152,905 1,213,408 1,290,788 1,371,425 1,409,825

461,306 480,915 503,455 525,322 546,903

40.01% 39.63% 39.00% 38.30% 38.79%

Canadian gov't spending is clearly declining as a percentage of GDP. It seems to be up a bit in 2006 but I had to estimate the 2006 based on the 2.8% growth rate so we won't know an accurate number for a few more months.

Bottom line: there is no evidence that Canadian gov't spending is 'out of control'.

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Spending is WAY out of hand in Canada. We're going to destroy our economy by no longer being able to keep up with the tax decreases everywhere else in the world.
Your stats are wrong.

I pulled the total GDP from the stats can website and used your expedenture numbers:

I get the follow trends:

2002 2003 2004 2005 2006

1,152,905 1,213,408 1,290,788 1,371,425 1,409,825

461,306 480,915 503,455 525,322 546,903

40.01% 39.63% 39.00% 38.30% 38.79%

Canadian gov't spending is clearly declining as a percentage of GDP. It seems to be up a bit in 2006 but I had to estimate the 2006 based on the 2.8% growth rate so we won't know an accurate number for a few more months.

Bottom line: there is no evidence that Canadian gov't spending is 'out of control'.

Evidence? Gun registry, Department of Indian affairs, the senate, etc. We don't need to be spending that much money in the first place.

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Where did you get 38%? Last time I checked it was 33%.
Is that federal government or consolidated government (all levels combined)?

Does that include transfer payments (and interest on the debt) or merely government purchases of goods and services?

Yes, it includes all levels of gov't. I was thinking spending funded by tax revenues - that's 33%. Total spending is 38%, the additional 5% coming from crown corps and other other non-tax sources.

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Yep and the funny thing is, talking about the gun registry, a high profile minister in the Harris Government goes on trial at Milton for gun abuses, such as no registration of an illegal fire arm. This is the fine gentleman who wanted our school systems to follow the Oaklahoma system where only half the funding for schools is paid and parents have to raise the rest. His name is Mr. Snobelen

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Inflation was around 3% for Canada this year, government spending increased 5% looking at consolidated figures. I think your assumption is wrong, currently government spending is skyrocketing.

So what? The costs of health care are skyrocketing because of an aging population and the cost of drugs and government pays most of it. Same goes for pensions due to aging population. Do you want $15 billion in spending on military equipment? How about beer and popcorn money for parents? For seniors? Last time I heard from you, you didn't have a problem with any of that. All I heard from you is complaints about welfare costs which are at their lowest in the last 20 years. Well, military equipment and handouts for parents and seniors cost money, so yes, spending is up in 2006.

Spending is WAY out of hand in Canada. We're going to destroy our economy by no longer being able to keep up with the tax decreases everywhere else in the world.

Take it easy. Taxes in Canada are lower than average taxes in the developed world. Canadian gov't is doing much better in that respect than other developed nations' governments. As for competing with developing nations, no amount of tax breaks can beat a dollar-an-hour wage overseas.

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Once again I ask you about handouts for seniors can you live on $15.000 a year?

Yes, I used to live on $12,000 a year and $6,000 of that went to tuition and textbooks (the rest to rent and food). It is quite possible to live on $15,000 a year. On top of that a senior who has $60,000 in pension income gets a $6,000/year handout from the government to spend in warm places outside Canada in the winter. Most working Canadians don't earn $60,000, so why should they pay taxes to subsidize the winter vacations of snowbirds who have higher incomes?

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Yes, it includes all levels of gov't. I was thinking spending funded by tax revenues - that's 33%. Total spending is 38%, the additional 5% coming from crown corps and other other non-tax sources.
But your numbers include transfer payments and interest on the debt. They are not legitimately government purchase of GDP.

In addition, the 5% you attribute to Crown corporations poses numerous problems. If I buy electricity from Hydro-Quebec, is that really teh equivalent to buying a government service through my taxes?

The statistical game Geoffrey and Riverwind are playing above is basically meaningless. You can't take GDP stats from one source and then match them with reported government expenditures from another source - general idea maybe but certainly not to make relevant annual comparisons.

GDP stats are generally straightforward. Government expenditures stats OTOH are fraught with many, many dangers for the neophyte.

The Fraser Institute study linked above is the best I've found.

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Very generally, the US pays for its military and Canada gets to free ride under the US security umbrella. Canadian governments pay for more health and education services.

In both countries, government purchases from the economy have risen over the past 80 years or so. I think it is fair to say that in many fields, government purchase of service is increasingly an ineffective way to deliver that service to the population.

Deciding what government should do and what it shouldn't do will be the challenge of this century.

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Very generally, the US pays for its military and Canada gets to free ride under the US security umbrella. Canadian governments pay for more health and education services.

I keep hearing that Canada gets a free ride. What exactly have we been protected from that we couldn't do ourselves?

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I keep hearing that Canada gets a free ride. What exactly have we been protected from that we couldn't do ourselves?
The collapse of the Soviet Union and the defeat of China's Gang of Four - to name two examples.

The US won the Cold War by being vigilant for over 40 years - and spending trillions on their military.

Si vis pacem, para bellum.

----

It takes force and patience to confront, arrest and condemn people like Robert Pickton, Clifford Olson and Paul Bernardo. The same exists in international affairs.

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Say what you like about Canada's social welfare system but Canadians have elected and re-elected gov'ts that have kept a reign on gov't spending as a whole even if they don't touch many of the programs that you dislike.

I don't really think this is understood too well in Canada. We have governments that "keep a reign on spending", yet which have these generous social programs. The two combined effectively creates starved programs which do not do what they were designed to, creating a cycle of mediocrity. For people on the left, government should put more funding into these starved programs. For people on the right, these starving programs should be cut and put out of their misery. But taking a position "in the middle" and being proud of the fact that the government starves programs in an attempt to appease both the left and the right? I guess I just don't understand that.

Back to the topic at hand, I don't think that Canadian govt spending is good at this point in time. Ideally, the government would grow to accomodate govt services in demand, yet not put pressure on the economy by growing faster than inflation. US govt spending isn't all that bad, considering what it spends on. People like to point out these debt-to-GDP ratios and govt spending-to-GDP, but at the end of the day both governments over history have not done a very good job of managing things.

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Yes, I used to live on $12,000 a year and $6,000 of that went to tuition and textbooks (the rest to rent and food). It is quite possible to live on $15,000 a year.
If you live alone and have no dependents of any sort. You were also a student with special tax advantages and you probably made minimal (if any) statutory contributions.

If a person's working income is $15,000, they will be surprised to learn how little their net pay increases moving to $30,000. Moreover, a job that pays $30,000 will probably require extra expenses in clothing and travel time.

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Very generally, the US pays for its military and Canada gets to free ride under the US security umbrella. Canadian governments pay for more health and education services.

I keep hearing that Canada gets a free ride. What exactly have we been protected from that we couldn't do ourselves?

Canada gets a free ride because we allow the U.S. to pay for our defense.

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