Our latest experiment with Keynesian liberalism — led by the last two presidents — has predictably failed and the economy is in shambles. President Barack Obama will need a miracle to win re-election in 2012, no matter who runs against him and no matter how unpolished or gaffe-prone that candidate may be.
Obama will announce his latest plan to fix the economy next week, and it is certain to involve more federal spending. We cannot possibly spend our way to prosperity, a fact Americans have figured out.
Want change? Toronto banker and writer David Lee says look to the north. Canada thrives as a result of dramatic reductions in government spending enacted by the right and two brave politicians on the left. At a time when the rest of the developed world struggles with unmanageable debt, high unemployment, riots in the streets and other forms of civil unrest that are tied directly to economic despair, Canada mesmerizes financial experts with falling unemployment, a government surplus and other inspiring indicators.
“The approach to government largesse that differentiated Canadian policy from that in the rest of the world is now paying dividends as the financial media swoons over Canada’s current fiscal situation,” wrote Lee, in an article published Monday by the Ludwig von Mises Institute (read Lee's article). “If there is a lesson to be gleaned from this experience, it is that, whatever the supposed short-term benefits may be, the long-run economic implosion necessitated by rampant government spending can only be delayed, never averted.”
Under the leadership of prime ministers Pierre Trudeau, Brian Mulroney, Jean Chrétien and Paul Martin, national debt increased, government regulations became more intrusive, personal incomes stagnated, health care suffered, personal savings decreased and the value of Canadian currency diminished. Though members of the Liberal Party, Chrétien and Martin saw the failures of uncontrolled government spending and they took their case to the people. They led the biggest crusade to reduce government spending in Canada’s history. They reversed the country’s massive deficit and managed to preside over $80 billion in surpluses.
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In 2006, Canadians elected a plurality of Conservatives to the Parliament and elected Conservative Stephen Harper as the country’s 22nd prime minister. In May, voters elected enough Conservatives to transform a plurality into Canada’s first majority government in more than a decade. The leader of the Liberal Party, Michael Ignatieff — a former professor at Oxford, Harvard, Toronto and Cambridge — failed to win his own seat. Canadians were fed up with Keynesians and they left no question about it.
“As Republicans and Democrats pushed America further and further to the left and Europe approached ever closer to its socialist ideals, Canada’s political discussion turned from which party could offer the greatest subsidies to the greatest number, to which party’s program of tax cuts would be of more benefit to the economy... For perhaps the first time in its history, Canada finds itself at the most pro-market limit of the political spectrum among the world’s industrialized nations,” wrote Lee.
Let’s do what Canadians did. Let’s elect only those who will reduce the size of government — even when it hurts — and allowed the market to prosper. It could save our country from an almost certain fate of economic ruin.