By Chris Edwards, Jason Clemens and Niels Veldhuis | Published May 15, 2009
Reports last week that the recession is draining Social Security and Medicare funds were just one more reminder that the United States needs to fix its finances. For inspiration, why not look to Canada? Long derided by American conservatives as "socialist" and praised by the left for its generous government spending, Canada is casting off those stereotypes. Over the past few years, while U.S. politicians presided over huge increases in spending and debt, the Canadian government tightened its belt, slashed tax rates and balanced budgets. Consider these trends:
Too often in the United States, Democrats reject cuts in taxes and spending because they consider them Republican causes. Yet in Canada, center-left governments implemented many of the reforms that made these impressive numbers possible. Perhaps we have something to learn from those "socialists" to the north.
SOURCES: Organization for Economic Cooperation and Development; Statistics Canada; Bureau of Economic Analysis; National Income and Product Accounts; Public Accounts of Canada; Social Security Trustees Annual Report, 2009; U.S. OMB/CBO; authors' calculations | CREDITS: Chris Edwards, Jason Clemens and Niels Veldhuis are economists at the Cato Institute, Pacific Research Institute and Fraser Institute, respectively.