Back in February, I noted that Washington could learn a thing or two from Ottawa in its handling of the recession. (See: “Looking North for Ideas”) Whereas Congress seems eager to spend first and ask questions later, the Canadian government has been more restrained: modestly increased spending (unlikely to significantly change debt-to-GDP ratio over the next half decade) and some tax cuts.
Earlier this week, three economists expanded on the argument in a Washington Post op ed, pointing out that Canada is busy cutting government, debt, and taxes while the United States does the opposite.
While Americans like to believe that the United States has a small government, particularly when compared to more socialist countries like Canada, the reality now is that government spending as a percentage of GDP is roughly the same in the two nations especially amazing given that in the early 1990s, 53% of the Canadian GDP was swallowed up by the public sector. And the trend cant be ignored: Washington is overseeing a welfare state buildup; Ottawa isnt.
Over at the Cato website, economist Chris Edwards, one of the co-authors, considers some of the “economic policy advantages” seen in Canada.
Not all his points are so persuasive alas, some seem like recycled talking points from the Cato press releases but the list is worth considering. Absent, however, is mention of Canadas greatest economic policy advantage: President Barack Obama lives south of the 49th parallel.
Original Source: http://www.newmajority.com/ShowScroll.aspx?ID=c4f1d272-7a54-4fcd-b023-f5a5f2cbadd3