Canada vs. California
July 21, 2010
Dan Walters had a good column comparing California to Canada. Both have similar-sized populations and economies. Yet, Canada has mostly avoided the economic calamity of recent years, whereas California has suffered heavily. Dan:
Canadian bankers eschewed massive involvement in the housing boom of the past decade. As a result, the nation escaped the bad effects of the housing bust, and its economy has continued to expand modestly.
California remains mired in a deep economic trough, with unemployment stuck at 12-plus percent, and is continuing to shed jobs – 27,000 just last month. Its politicians are deadlocked over how to deal with the state’s stubborn budget deficit, and its credit rating is the nation’s lowest.
He then goes on to recommend getting our act together on the state budget and pensions.
But he’s leaving out the most important thing: California is part of the USA, and as such, its economy and budgets rise and fall depending on the whims of Washington. Here are some of the main reasons Canada’s economy is doing better:
1. The USA now has an “unfree” economy, according to the rankings of the Heritage Foundation’s Index of Economic Freedom. That’s the first time our country has fallen out of the “free” category. First under Bush, now under Obama, government has grown and grown more expensive and controlling. The economy has suffered. And California, of course, adds more state taxes and regulations than most states — another hit against us.
By contrast, Canada is in the “free” category. Heritage notes:
Scoring high in many of the 10 economic freedoms, Canada performs particularly well in business freedom, financial freedom, property rights, and freedom from corruption. Straightforward regulations facilitate entrepreneurial activity. Overall, regulation is thorough but essentially transparent.
2. Medical care is cheaper. Of course, one area where Canada is not free is its mandatory socialist medical system. But with Obamacare, America now has something similar — except ours costs twice as much. We have the worst of all worlds: the expense of capitalist medical care, with the incompetence and lines of socialist care.
3. The fooluish Iraq and Afghan wars. The latter now is the longest in American history, surpassing Vietnam. It’s obvious from history that wars drain treasuries. Although Canada has contributed troops to both wars, its involvement has been limited. By contrast, for America the cost of the Iraq War alone is as high as $5 trillion, a massive drain on the American treasury.
Basically, America now is headed downward to Third World economic status, with California leading the way.
By contrast, Canada, except for its dismal socialized medicine system, remains a robust, dynamic First World economy, and is likely to remain at that level. Eh?