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When the Koch Brothers talk well of Canada

Imagine my surprised when I read the WSJ editorial written by Charles Koch – one of America’s most infamous ultra right wingers praising Canada for reducing government’s involvement in the economy.  Now, as a Texas based and wide supporter of all things right wing (Cato, AEI etc) Koch doesn’t actually say why Canada was able to reduce the presence of Government in the economy – because according to the “Right-speak” it is support for Planned Parenthood, and NPR that is at the root cause of all evil, and government expenditure.  

Not what is truly amusing is that Canada’s government limited role in the economy can be directly traced to Canada’s single payer system for the health care sector.  A policy that is an anathema to America’s right wing lobby.  Canada’s expenditure on defense (1.3% of GDP) is another important factor as it is so much smaller than what America spends (4.3%). Leaving social security aside (similar in both countries), we have a situation in Canada where all levels of government spends substantially less on medical care and military costs than does America (on the debt front Canada and USA are very close).  These two factors alone would seem to explain the difference.

Canada is no magical kingdom; it has its share of screw-ups.  Canadians have too much debt, too little savings.  We were saved from the real estate implosion south of the border because of deeply conservative banking rules, and full recourse mortgage lending.  Canada’s central bank removed all monetary stimulus 18 months ago now, with the growth of M1, M2 and M3 in line with economic expansion.  Government debt is still substantial, and the provinces (in charge of providing most direct services to Canadians), suffer heavy debt burden, and a continual battle to keep control over operating costs (they are loosing the fight against medical costs, which are growing more quickly than GDP growth).  Finally, Canada’s central bank is probably the only one in the world preaching a strong currency.

In Quebec, the continual “war” between those who want to leave the confederation and those who wish to stay poisons the debate on all other issues – whether it relates to securities law, education of health care.  In Ontario, the problems are no less severe, with aging power infrastructures a substantial bill is looming for Ontario residents.  

To get back to Koch & Friends, it is remarkable that in this day in age, it is possible for a seemingly serious publication to allow for such ridiculous statements to be made.  Few if any winning aspects of Canada’s society are applicable to the American experience.  Americans would never allow for a 50% reduction in their military budget, the same way America could never live with Canada’s socialized medicine. 

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