Canada is outperforming the U.S. but NOT because of tax cuts as Forbes article claims

A July 24th Forbes article that a Canadian friend just sent me, makes a very funny claim: that President Obama doesn't want Americans to know that Canada is outperforming the U.S. on every economic front by implementing policies that US Republicans say they’d like to implement. This is based on an interview with Tony Clement, Canada’s President of the Treasury Board and a Member of Parliament with the Conservative Party of Canada.

So, what does Tony Clement say about Canada’s economic growth and low debt? That it comes as a result of the genius idea of the Conservative Party of Canada to reduce its federal corporate tax rate from 22% in 2006 to 15% in January 2012 and to cut spending.

 It goes to show that conservatives in the US and elsewhere all say the same bunch of baloney nonsense.

The article offers this numbers to show how well Canada is performing:

Canada’s unemployment rate is now 7.3%, the U.S. rate is 8.2%.

Canada’s combined federal and provincial debt to GDP ratio is 57.9%, the U.S. rate was 101.5% in 2011.

Canada’s banks are among the best capitalized in the world and during the financial crisis, no Canadian banking institutions had to be bailed out. Canada also has a better credit rating than the U.S.

Just 0.35% of Canadian mortgages are behind on their payments, In the US int eh 1st quarter of 2012, 5.78% of U.S. mortgage holders were behind on their payments by 60 days or more.

Great, good for Canada, but that has NOTHING to do with the TAX and spending cuts! It is the same as claiming that Obama caused the recession.

Fact is, that Canada simply was not as affected by the recession of 2008-09, because Canada did not gamble as much as the US with financials and real estate. Why not? Because they did have a government with stricter regulations. If Canada has more regulations, less debt, a healthier work force due to its healthcare program and provides people with better opportunities to get ahead economically via entitlement services, it is because these were put in place by LIBERAL governments, not because of the current conservative government.

Canadians are not afraid of the word "Liberal", which is why they have a party called the "Liberal Party" which governed the country from 1993 to 2006. That is 13 consecutive years of liberalism!

Some other fundamental social programs that run so successfully in Canada compared to the US were also introduced by Liberals in earlier years, for example: the Canada Health Act was introduced by the Liberal Trudeau government in 1983.

The effect of cutting taxes will be shown in about 8 years of a Conservative government. That is how long it took Bush to bring down the system and depress the wages of the middle class and the poor and fill the Swiss bank accounts of the rich. And if Canada also moves towards deregulation of their financial system they will end up just as bad as we did.

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Canada is outperforming the U.S. but NOT because of tax cuts as Forbes article claims, 1.0 out of 1 based on 1 rating

3 comments to Canada is outperforming the U.S. but NOT because of tax cuts as Forbes article claims

  • BC

    Ita:
     
    Canada has done well because they have not allowed bubbles and financial malfeasance and in this regard you are 100% correct.
     
    The problem in the US is both parties in Congress are corrupt to the bone.  Furthermore, both parties are addicted to spending so Canada has done better because they are not on a path to default.
     
    I'm pretty tired of hearing about the economy all being Bush's fault.  I blame Reagan, Clinton, Bush jr. and both parties in Congress since the mid 80s.
     
    Clinton, Frank and Cuomo created the mortgage crisis by trashing lending standards at Freddie and Fannie with the idea that everyone should own a home.
     
    Clinton along with both parties in Congress owns the tech bubble.  Bush owns $2.5 trillion in war debt and Obama owns things like the union stimulus, which wasn't a stimulus.
     
    As per the mortgage funny business – why was no one prosecuted by DOJ under Bush or Obama?  Why was JP Morgan trading credit default swaps when they shouldn't have?
     
    I haven't seen any real reform on Wall Street and it's because they fund both parties in Congress and both Romney and Obama.
     
    Very big govt. doesn't work because by its nature it wastes a ton of money and we have a huge spending and debt problem at all levels of govt. in the US.  What Congress should do is have the right framework in place to ensure ethical business behavior and then the balls to prosecute when people run afoul of such legislation.
     
    At the core of the problem is that the US has lost all sense of morality.  The only fix I see is a 3rd party that isn't owned by lobbyists.  Let's get rid of as many Republicans and Democrats as possible.
     
    When you say a liberal govt in Canada enabled the right framework and therefore this is the answer in the US….
     
    I see no liberal action in the US to control Wall Street or deficit spending.  Not saying the Repubs are any better though.
     
    As for Bush's bringing down the system – he certainly gave it his all with the wars, but under Clinton China got into the WTO and that's when outsourcing really took off and of course both parties in Congress supported this at the behest of their CEO and Wall Street customers.
     
    What I find particularly funny (sad really) is how so many people in the US are beholden to one party or the other when in reality there is only one party whose goal is to get enough people fighting with each other so they don't notice that both parties behind the scenes are picking their pockets on behalf of their lobbyists.
    The fix in the US is moderate govt and cleaner politicians or collapse and with $17 trillion in debt, over $1 trillion in deficit spending per annum, a central bank that is printing us to Weimar if not checked, Europe unraveling – I think the latter will be the result.
     
     

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  • itaest

    > As per the mortgage funny business – why was no one prosecuted by DOJ under Bush or Obama?

    You keep asking that question. My take is that under Bush it would not happen because they are Bush's cronies. Under Obama it does not happen because Obama knows he has to pick his battles. Remember what happened to Nazi Germany when Hitler decided to fight a war on all fronts? Always pick your battles!

    > I see no liberal action in the US to control Wall Street or deficit spending.

    Really? I gave you a link to Dood-Frank but here it is again.

    The debt would not be a problem if the US would raises taxes on the rich, just like the Liberal Party did in Canada for so many years, which is why Canada's debt is so small.

    Stop equating Democrats with Republicans. These two are very different creatures.

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  • BC

    Of course I keep asking the question – these crooks on Wall Street are going to collapse the US and global economy.
     
    People in the US have different issues/hot buttons – defense, education, health care, etc.  And while opinions differ – if the economy collapses no one will get anything. 
     
    The financial malfeasance on Wall Street is the greatest threat to national security and stability – it's not a minor issue.
     
    So I don't buy the argument that one has to "pick their battles."  Laws must be enforced.
     
    Comparing Obama to Hitler is bizarre.  Dodd-Frank could be a lot stronger, but pointless if new or existing legislation is not enforced.  Derivatives need to go away entirely and not just be listed on exchanges + a full return to Glass-Steagall.
     
    According to Newsweek – Obama won't go after Wall Street due to the amount of cash he raises from them.
     
    Two months into his presidency, Obama summoned the titans of finance to the White House, where he told them, "My administration is the only thing between you and the pitchforks."
     

    The bankers may have found the president's tone unsettling. Candidate Obama had been their guy, accepting vast amounts of Wall Street campaign money for his victories over Hillary Clinton and John McCain (Goldman Sachs executives ponied up $1 million, more than any other private source of funding in 2008). Obama far outraised his Republican rival, John McCain, on Wall Street–around $16 million to $9 million. As it turned out, Obama apparently actually meant what he said at that White House meeting–his administration effectively would stand between Big Finance and anything like a severe accounting. To the dismay of many of Obama's supporters, nearly four years after the disaster, there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

     
    If you raise taxes on the rich how much additional tax revenue do you think would result per annum?  Our debt is so big because we spend so much.  Increasing taxes may help lessen the debt a bit, but when we're running deficits of $1.5 trillion per annum do you really think it would help?
     
    Do you think raising taxes on the rich would raise another $1.5 trillion in tax revenue per year?  And then what about the $17 trillion in debt?
     
    The two parties are not different animals rather the same.

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