Stephen Marche claims that, "for the first time in recent history, the average Canadian is richer than the average American." He ponders the implications:Wait a second. First off, they should be. Canada is in the midst of a ten year resources boom, which has caused issues in other resource rich countries who have had large capital inflows. Secondly, they are in what very well be a housing bubble driven in markets such as Vancouver by Chinese capital inflows. I think Spain may have had a similar real estate boom partially fueled by foreigners.
Both liberals and conservatives in the U.S. have tried to use the Canadian example to promote their arguments: The left says Canada shows the rewards of financial regulation and socialism, while the right likes to vaunt the brutal cuts made to Canadian social programs in the 1990s, which set the stage for economic recovery. The truth is that both sides are right. Since the 1990s, Canada has pursued a hardheaded (even ruthless), fiscally conservative form of socialism.Reihan reframes:
The really interesting question is this: given the massive housing bust in the U.S. and the continuing appreciation of home values in Canada, Canada’s importation of large numbers of college-educated immigrants and its draconian policies towards unauthorized immigrants, and its markedly different family structure, why isn’t the gap in average net worth between Canada and the United States much larger?
But now to the government spending. The U.S. spends 4.8 percent of GDP on defense versus 1.4% by Canada. And then there is health care. The U.S. spends $7500 per person for health care, compared to less than $4100 in Canada. Finally, Canada is a net exporter of oil, unlike the U.S.
Since the Canadians economy has slightly more of a percentage of GDP in government spending, they must be spending more on education, infrastructure and/or social programs. Overall, the conservatives are right, we should follow Canada's lead. We just probably wouldn't follow them where Republicans would want us to.
Another thing to note is that since taking office in '06, the Conservative government (our Republicans) have gone from inheriting a small yearly surplus to having a 50 billion dollar yearly deficit (largest in Canadian history). And they have a similar plan to get rid of it (cut taxes, cut programs). I'm not holding my breath.
ReplyDeleteWasn't there a global recession somewhere between 06 and now? Not sure but I seem to remember something about that.
DeleteCanada weathered that pretty well, mainly due to their metals and oil resources. They also didn't have the housing crash (at least yet).
DeleteLuckily for you, those Conservatives would be considered RINOs down here. They just aren't crazy enough to compete with our version.
ReplyDeleteThey may not be as crazy, but I've been re-reading All the President's Men, and the similarities between our Conservatives and the Nixon administration are striking. Extremely secretive, heavy-handed, with an insecure siege mentality. As well as a willingness to bend or break rules, in spite of their claims to be a Law and Order government.
ReplyDeleteI can only hope for a similar fate.
Maybe Canada spends less than America because of the long wait times to seek care? Hard to spend money on care when your not getting it! It's common sense. You make a choice; mediocre care for all or great care for most. When is the last time you have heard of an American going to Canada for their "great healthcare". Never. But how many times have you heard it the other way around.
ReplyDeleteI haven't heard of too many Canadians coming to the U.S. for their health care, but I have heard about some pretty long waits here in the States. Why should we spend 80% more for health care when most of us get pretty mediocre care here. You can claim we have the world's best health care system, but that doesn't make it true.
ReplyDelete