September 23, 2012

ANGLOSPHERIC SAMENESS:

How Canada Saved Its Bacon : Deep cuts in government spending pulled Canada back from an epic fiscal crisis in the 1990s. (MARY ANASTASIA O'GRADY, 9/23/12, WSJ)

Former Canadian Prime Minister Paul Martin has a stern warning for the U.S. political class: Get real about the gap between federal revenues and spending, or get ready for disaster. [...]

When the Liberal Party government of Prime Minister Jean Chr├ętien took power in October 1993, Mr. Martin was charged with pulling his nation out of the fiscal death spiral. He did it with deep cuts in federal spending over two years that amounted to 10% of the budget, excluding interest costs.

Nothing was spared. Even federal transfers to the provinces to fund Canada's sacred national health-care system got hit. The federal government also cut and block-granted money for welfare programs to the provinces, giving them almost full control over how the money would be spent.

In the 1997 election, the Liberals increased their majority in parliament. The Chr├ętien government followed with tax cuts starting in 1998 and one of the largest tax cuts--both corporate and personal--in the history of the country in 2000. The Liberals won again in 2000.

Posted by at September 23, 2012 7:18 PM
  

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