August 1, 2011

CANADIAN-STYLE HEALTH:

Why Canada Is Beating America: It shrank government, and now unemployment and debt are declining. (JASON CLEMENS, 8/01/11, WSJ)

While the U.S. remains mired in debt and slogs through a subpar economic recovery, Canada is moving ahead steadily. Its unemployment rate peaked at a little over 8.5% and is now 7.4%, and there were no bank bailouts. Real GDP growth is expected to be roughly 3% this year.

Now with the first majority government since 2004, and the first Conservative majority since 1993, the country has an opportunity to vault forward. The Conservatives led by Prime Minister Stephen Harper have a chance to build on the reforms begun under previous Liberal governments that Americans can only look at with envy.

Canada's government, for example, has grown smaller over the last 15 years. Total government spending as a share of the economy peaked at a little over 53% in 1993. Through a combination of spending cuts in the 1990s and spending restraint during the 2000s, it declined to a little under 40% of GDP by 2008. (It's currently about 44% due to the recession.)

Reductions in government spending allowed for balanced budgets and the retiring of debt. Federal debt as a share of the Canadian economy was almost halved from nearly 80% to a little over 40% over the same period.



Posted by at August 1, 2011 7:22 AM
  

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