Posted on 07/12/2010 7:35:35 AM PDT by SeekAndFind
The United States will probably take years to recover from the global recession and credit crunch, economists say, but its northern neighbor is back in fine shape.
Whatever else they've thought about their much smaller neighbor to the north, Americans have almost never looked to Canada as a role model.
Indeed, during the long, bitter push to revamp the U.S. healthcare system, opponents repeatedly warned that, if we weren't careful, we could end up with a medical system like Canada's.
But on healthcare, as well as on such critical issues as the deficit, unemployment, immigration and prospering in the global economy, Canada seems to be outperforming the United States. And in doing so, it is offering examples of successful strategies that Americans might consider.
While the United States, Japan and much of Europe are struggling with massive fiscal deficits, Canada's financial house is tidy and secure. Most economists say it will take years for the United States to make up the 8 million-plus jobs lost during the recession, but Canada — despite its historic role as a major supplier for the still-troubled U.S. auto industry — already has recovered essentially all of the jobs it lost.
Meanwhile, as Americans continue their grueling battle over immigration, Canadians have united behind a policy that emphasizes opening the door to tens of thousands of skilled professionals, entrepreneurs and other productive workers who have played an important role in strengthening the Canadian economy.
Granted, Canada's problem with illegal immigration is smaller, and its economy does not match the scale and dynamic productivity of the world's largest. But on the most troubling issues of the day, the U.S. is locked in near-paralyzing political and ideological debates, while those same issues are hardly raising eyebrows in Canada.
(Excerpt) Read more at latimes.com ...
Earlier that decade, Canada too was straining from years of excessive government spending that bloated the nation’s total debts, to 70% of annual economic output — a figure the U.S. is projected to approach in two years.
As with Greece, Portugal and Spain this year, Canada’s credit rating was downgraded in the early 1990s, sharply raising its borrowing costs. With its economy suffering and pressure mounting from international investors — Wall Street bankers in particular — Canadian officials slashed spending for social programs and shifted more of the cost burden to provincial governments, which almost everyone in Canada felt.
It would take several years of such tough medicine, but as Canada headed into the new millennium, the government’s total debts were shaved nearly in half, and then whittled down to a little more than 20% of gross domestic product just before the global recession began in 2008 — by far the lowest ratio among major developed countries.
With the economic downturn, Canada pumped up public spending to stimulate growth, as other nations did. Even so, its fiscal shortfall this year is projected at $33 billion, comfortably below the 3%-of-GDP threshold that economists consider a manageable level of debt.
Washington’s deficit this fiscal year is estimated by the Congressional Budget Office at $1.35 trillion — or 9.2% of projected GDP.
The United States’ larger size — its population and economy are roughly 10 times those of Canada — makes direct comparisons difficult. And many Canadians readily acknowledge that American entrepreneurship and productivity are enviably stronger.
But having learned to tighten their belts in the 1990s, Canadians have little sympathy for U.S. consumers who pile debt onto their credit cards and homes.
Canadian banks have been more conservative than American ones. So they made few subprime loans, and home equity lines are relatively recent offerings in Canada.
Yet their solid if unexciting product lines and financial results mean Canadian firms can now expand lending. This as U.S. banks continue to refrain from extending credit, thus restraining spending, investment and job growth.
Canada has been receiving about 250,000 permanent residents annually. About one-fourth of the new arrivals gain entry through family relations, but more than 60% are admitted as “economic immigrants” — that is, skilled workers, entrepreneurs and investors.
In the U.S., it’s basically the reverse: Most of the 1 million-plus permanent residents received annually have been family-sponsored; only about one in seven are admitted on the basis of employment preferences.
That is, Washington emphasizes bringing in family members of immigrants already in the United States. Ottawa put the emphasis on admitting those who can contribute to the economy.
Well, the former Canaduh doesn’t have Bwwannny and Chris screwing up their banking system. It doesn’t have a Marxist Zer0 fearless leader waging war on the country, doesn’t have a large military to feed, likely has a reasonable balance of payments/trade, is willing to drill, baby, distill, etc.
Canada also does not have our President, his czars or the Democratic Party that we have that are ripping off the American people.
Their banking and mortgage system is indeed better as they don't force banks to loan money to deadbeats that can't pay. 20% down is routine and there was never a bubble like the USA.
1. A long, porous border with a third world country.
2. They actually WILL extract and use their natural resources.
3. We provide for them something along the lines of $60 BILLION a year in military aid, since they have no real standing military and count on us to provide for their safety.
Excellent points, there are some aspects of Canada we can emulate but NOT their immigration policy as the article indicates. And certainly not their insane tax system. 13% national sales tax and marginal tax rate of 49% above $110,000 / yr. Bad as it is our tax system is still far better.
Excellent points, there are some aspects of Canada we can emulate but NOT their immigration policy as the article indicates. And certainly not their insane tax system. 13% national sales tax and marginal tax rate of 49% above $110,000 / yr. Bad as it is our tax system is still far better.
Canada isn't just substantially smaller than the U.S. in terms of population (the U.S. has about 10x more people), but the Canadian economy is very different from ours. They are very resource-oriented and production-oriented up there, with so much of their economy tied to foreign trade. I may be wrong about this, but I believe the single biggest factor in Canada's relatively strong economy is that prices for all kinds of commodities that are produced in abundance in Canada (oil being a good example) have risen dramatically in the last few years. I'm not sure this can go on indefinitely, as high prices ultimately crimp demand and may result in declining economic fortunes in various business sectors (lumber prices have apparently dropped significantly in recent months).
Things change, and our thing will start changing after the November elections. There will be belt tightening here, but also a loosening of the noose around growth’s neck. Canada is turning around to head the right direction politically and economically, but they will experience a horrible cultural rot, if they don’t curtail Islamic immigration.
Who are you referring to ?
Its impressive how the LAT makes no mention of how Canada is the largest supplier of oil to the United States. That is a unique phenomena of the past decade and a brilliant byproduct of great foreign policy moves by Bush.
More importantly, the development of fossil fuel as a product can propel an economy with tens of billions of dollars in economic activity .
But the LAT leaves that out rather deliberately.
Our northern neighbors are doing just ducky at least partially because 1) they don’t have to spend a nickel on defense and 2) because they live next door to the largest,most prosperous,productive and vibrant market on earth.
I’ve read of Canada’s value-added, “point-based” immigration system before. However, at the same time, their refugee-status determination policies are way too loose and have made Canada a terrorist entrepot and have everything to do with why so many terrorists entered Canada first before trying to sneak South.
We would also benefit greatly from REAL immigration reform. I know from my father’s many Russian friends over the years what a red-tape monstrosity the current system we have for “legit” immigration is (think an average of a dozen years, twenty-thousand bucks and countless man-hours spent making appointments, gathering paperwork and standing in line).
That said, I have a real problem with the H1-B system. I’ve heard too much about the “Indian Mafia” that prevails in the IT world. For H1-B reform, I would go with the proposal another FReeper tossed out a few years back: companies in question could sponsor ALL the H1-B’ers they want too, but the supposedly vitally-needed workers in question would be free to work for ANY employer they chose over the duration of their visa. The companies in question would be free to add to the employment pool of the skill in question but they would NOT have any indentured slaves to toil for them at sub-par wages.
This IS the key to a healthy financial system. The stronger economic system they enjoy, follows as a result.
In addition to that, Canada has always had the USA to defend this Continent and has spent very little of their tax revenues on their military.
Another major difference is Canada's urban structure. The country is mostly rural and smaller towns and communities. These communities are supported by stable industries like logging, oil, manufacturing, trucking, agriculture and small business. They also do not have to deal with the out of control welfare system or millions of illegal immigrants. And, smaller rural communities tend to have a stronger sense of accountability and national pride.
Not only that, Canada's Welfare system requires accountability and repayment to anyone resorting to it. So, most Canadians only use it as a last ditch option and they have very few generational/professional welfare recipients.
Healthcare in Canada is a joke. We are heading that way as well with Dr. Goodwrench in the WH.
Does Canada have an Estate Tax ? ( AKA as the Death Tax )
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