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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.

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.

The key to Canada's lack of financial trouble is just that. They did just the opposite of what the USA did in regards to scams like Fannie May and Freddie Mack. They tightened up on their lending and left the banks to handle their own funding of the loans they made. “Sub-Prime” loans were not allowed and a substantial down payment and investment from the borrower was required to secure all loans made.

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.