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Canada is bearing the fruits of the free market system while America is floundering in a sea of regulations and red tape.
Canada has crushed the debt bug that has been transmitted throughout the global economy.
In the early 1990s Canada faced a wall of economic hardships. The Canadian government showed a trend of overspending and debt continued to grow to the tune of 53 percent of GDP. As the world faced a global recession, Canada—rich with natural resources—implemented free market policies that got the economy rolling.
Canada started balancing its budget in 1998, a feat which was achieved by cutting massive government spending rather than raising taxes. In fact, many tax rates were slashed. Corporate tax rates took the biggest cut—down to 18 percent—and continued to be cut thereafter. Coupled with the pursuance of free trade agreements, Canada has made itself a hot-spot for global industry.
Canada currently enjoys a sound, public social security system. Ironically, Canada and the United States devote the same percentage of GDP towards retirement benefits. However, Canada set aside money early on to pay for future retirement benefits—mirroring the actions of a private pension system. This has made Canada’s system extremely sound, unlike the United States who faces trillions of dollars in unfunded liabilities.
Scaling back government has done wonders for the Canadian economy. Economic growth has soared past U.S. levels and the unemployment rate is steadily decreasing. Canada has also experienced an increase in investment without employing artificially low interest rates.
The Canadian government detected the great irresponsibility of its spending and restructured their economy. This leads me to ask—what is Washington doing?