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What Canada is doing right

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#1 Hum

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Posted 15 May 2014 - 10:55

Its middle class is thriving, its people are universally liked and its government actually works.

Fifty years ago, this description might have fit the United States. But not now. America’s middle class is shrinking and its global reputation is spotty. Congress, meanwhile, creates more problems than it solves.

So for guidance on how to fix America, why not look north to Canada, where the mood is upbeat and life appears to be getting demonstrably better? The New York Times recently reported the Canadian middle class is now the world’s richest, surpassing the U.S. for the first time. In the 2014 “better life index” recently published by the Organization for Economic Cooperation and Development, Canada outscored the United States in 9 of 11 categories, including education, safety and overall life satisfaction.

The poverty rate is lower in Canada, and every Canadian citizen has government-provided health insurance, which might explain why Canadians enjoy longer life expectancy than Americans and are considerably less obese. As for the government, Canada’s national debt amounts to about $18,000 per person, compared with $55,000 in America.

So what is Canada doing right?

It has a more stable banking system. Canada has virtually never experienced a financial crisis, and there were no bailouts north of the border in 2008 when the U.S. government committed $245 billion to save dozens of U.S. banks. The differences between the two countries are somewhat accidental. In the United States, distrust of a strong central government all the way back in the founders’ days led to a system of state-chartered banks vulnerable to political meddling, and therefore riskier than the big, nationally chartered financial institutions that operate in Canada.

“In the United States, instability was permitted by regulators because it served powerful political interests,” Prof. Charles Calomiris of Columbia University wrote in a 2013 paper for the Federal Reserve Bank of Atlanta. “In Canada, the banking system was not used as a means of channeling subsidized credit to a favored political constituency, so there was no need to tolerate instability.” The legacy of that today is a malleable U.S. banking system that, among other things, was deregulated in the late 1990s at the behest of banks themselves — which contributed to the 2008 collapse.

The financial crisis and the abuses that led to it are still holding back the U.S. economy. Shoddy lending standards were a major cause of the housing bust, which has whacked $3 trillion off the value of Americans’ real-estate assets — even with the year-long recovery in the housing market. That’s a huge loss of wealth that continues to hold back U.S. spending. And it’s just part of a 25-year debt binge Americans are still working off. With far fewer lending excesses, Canada didn’t really have a housing bust or a credit crisis to recover from.

Money doesn’t dominate politics. Canada has much stricter rules governing campaign contributions than those in America, where campaign-finance laws are getting weaker on account of recent Supreme Court rulings striking down limits on spending. Tougher limits in Canada give people and businesses with money to spend less influence over laws and regulations. “Every single one of my voters thinks that is terrific,” says former journalist Chrystia Freeland, now a Canadian member of parliament, representing a district in Toronto. “There is a lot less influence of the really wealthy and single-issue interest groups. A regular person has a much bigger voice.”

Many members of the U.S. Congress report spending half their time, or more, raising money for reelection efforts rather than legislating. Freeland estimates she spends less than 5% of her time doing that. There’s virtually no chance the United States will ever adopt a Canadian-style parliamentary system, but Congress could pass new laws or amend the Constitution in order to limit the corrupting influence of Big Money in politics. Were that to happen, however, it would probably make incumbent politicians more vulnerable to challengers. Maybe next century.

There’s less hostility toward immigrants. Canada, like the United States, has limits on the number of foreigners it allows into the country to work. But the whole issue of immigration is far less politicized, and there’s a broad understanding that skilled foreign workers help the economy. Canada actually recruits immigrants, part of a deliberate effort to attract talented foreigners most likely to contribute to economic growth. In the United States, the quota for skilled immigrants is far below the number U.S. firms would hire if they could get them. Despite appeals from many businesses, Congress is paralyzed on reforms that would let more skilled immigrants in, partly because that issue gets conflated with separate reforms aimed at stemming the flow of unskilled illegals.

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#2 margrave

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Posted 15 May 2014 - 11:08

I've often looked at migrating to Canada. Some of my favorite people are from there. Ever time I check it out, I find there's no way I could afford it. /sigh



#3 cork1958

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Posted 15 May 2014 - 11:12

Never have figured out why the government bailed the banks out? I mean, if you're a bank with a constant income like they have, how can you possibly go broke, and if you do, tough! About the same with the auto makers.

 

We should've let them all collapse! Maybe the a**holes in Washington, and every where else, would've learned something!

 

Our government is so corrupt, it's not even funny and there is just about nothing we can do about it now. Well, there is, but that isn't going to happen!



#4 margrave

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Posted 15 May 2014 - 11:13

The bailouts were a mistake in my opinion.



#5 OP Hum

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Posted 15 May 2014 - 11:22

I might have moved there, but the long cold winters keep me away.



#6 Torolol

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Posted 15 May 2014 - 11:27

why its 'middle class' and not trying to thriving the lower class?

#7 Anibal P

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Posted 15 May 2014 - 11:44

Simple, taxes and class warfare, here in the US too many parties have vested interest in keeping the poor poor and blaming the rich, there has been no real investment in helping to poor, and no, token causes like this failed "living wage" crap are not going to help anyone

 

 

But my opinions are not popular, so call me whatever you want, won't change my mind that we need LESS government, not more 



#8 OP Hum

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Posted 15 May 2014 - 11:52

I suspect this has something to do with the better Life conditions as well:

 

2013 The current population of Canada is estimated to be approximately 34,881,000

As of May 13, 2014, the United States has a total population of 317.8 million

 

9 X as many people.



#9 BlueScreenOfDeath

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Posted 15 May 2014 - 13:43

I suspect this has something to do with the better Life conditions as well:

 

2013 The current population of Canada is estimated to be approximately 34,881,000

As of May 13, 2014, the United States has a total population of 317.8 million

 

9 X as many people.

 

Yea essentially the population of California. It's far easier to provide excellent conditions for 34 million or even 30 million, versus 317 Million.



#10 shozilla

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Posted 15 May 2014 - 13:46

I've often looked at migrating to Canada. Some of my favorite people are from there. Ever time I check it out, I find there's no way I could afford it. /sigh

 

My friends are opposite...  they are from there but they moved from there to US.  They are few minutes away from me.



#11 Sandor

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Posted 15 May 2014 - 13:53

While Canada is certainly far preferable to the US, it's a long way from perfect.



#12 LaP

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Posted 15 May 2014 - 14:04

 

its people are universally liked

 

 It will change in the upcoming years with the ****** Harper in place.

 

We really need to kick this guy out. Worst foreign policy in the history of Canada.



#13 LaP

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Posted 15 May 2014 - 14:10

Yea essentially the population of California. It's far easier to provide excellent conditions for 34 million or even 30 million, versus 317 Million.

 

Personally i always thought USA was too big. Big countries tend to fail in the long run. USA did well so far though.

 

Canada is big but a big chunk of its territory is not really habitable anyway nobody want to live in the north.



#14 Jason S.

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Posted 15 May 2014 - 14:19

Never have figured out why the government bailed the banks out? I mean, if you're a bank with a constant income like they have, how can you possibly go broke, and if you do, tough! About the same with the auto makers.

 

We should've let them all collapse! Maybe the a**holes in Washington, and every where else, would've learned something!

The root of the issue is w/ our Fractional Reserve System. By law, the banks are only required to keep 10% of their money (your money) in the bank and are allowed to further lend the other 90%. More so, they're legally allowed to create more money out of nothing from that 90%. This runs rampant when banks are allowed to throw money around, becoming more and more leveraged. That is, they have way more money lent to people than they have in the bank. Suddenly, when you have, say $1bil in your vault (so to speak) but have $1tril in loans, the system cant support itself.

 

So, if you give your bank $1000, they are legally allowed to loan out $900 of that, and further print another $810 from nothing. From there, they are required to keep $81 of that, and can lend $729 of it. this goes on and on...

 

The fiat currency in our country needs to end. It's backed by absolutely nothing and the Fed is still printing $45bil of new money each month! this is down from the astounding $85bil they were printing last year, every month. On top of this, the Fractional Reserve System needs to end as well.

 

And yes, in a free market economy, we should have let all that crap fail. All of the auto industry, all of the banks. Unfortunately we dont have a free market economy anymore. Instead, we have a plutocracy w/ more and more government intervention. This led to the bailouts, then let the Fed run rampant with the worthless programs like QE1, 2, 3 and 4, ZIRP, Twist and TARP. These have done nothing to help our economy, we're still in a recession, and have only increased the Fed's balance sheet and led to accelerating inflation.

 

Just look at the Fed's balance sheet in this graph. It remains relatively stagnant until 2008 when it shoots up. It's over $4 trillion now!



#15 +_Alexander

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Posted 17 May 2014 - 05:31

"Maybe next century." summarizes the whole thing.
America cannot remove money from politics.