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Less Obama, Less Debt

May 21, 2009

By David Gratzer

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 can’t be ignored: Washington is overseeing a welfare state buildup; Ottawa isn’t.

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 Canada’s greatest economic policy advantage: President Barack Obama lives south of the 49th parallel.

Original Source:



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