The United Kingdom Draws the Wrong Lessons from Canada
Wednesday, 06/9/2010 - 10:47 am by Marshall Auerback | 20 Comments
Before David Cameron makes huge budget cuts, he should go back to the history books.
For once, Canada is making the news for the wrong reasons. The United Kingdom has braced the country for cuts in government spending up to 20 percent as the new Conservative-Liberal Democrat coalition lays the groundwork for an austerity program to last the whole parliament. Their inspiration? According to The Telegraph, Prime Minister David Cameron’s administration hopes to draw lessons from the experiences of the Canadian Government of the 1990s. Before too much damage is done, we suggest they’d better re-read the history books a bit more closely.
The standard narrative of the Canadian experience in the 1990s is this: in 1993, Canada’s budget deficit and debt-to-GDP ratios were the second highest amongst the G7 countries, after Italy’s, and the US financial press was unfavorably comparing Canada to Mexico. That year, with the IMF supposedly lurking at the door, the Liberal Government of Prime Minister Jean Chretien, and his Finance Minister, Paul Martin, laid out a goal to halve the budget deficit to three percent by 1998, with an unannounced goal of a zero deficit by 2000. Martin began cutting costs significantly in 1994, chopping 10 percent from department budgets and converting a deficit equal to nearly 7 percent of gross domestic product into a surplus by 1997. By 1998, the deficit was eliminated and overall debt was dropping quickly, amidst a rapidly growing economy.
Success, correct? Certainly, this narrative has largely gone unchallenged (even in Canada). It has metamorphosed into received wisdom and has been used by many to justify a renewed assault on the welfare state. It is argued that the impact of Chretien government’s cuts in public spending allowed Canada to get through the Asian crisis with little damage and to go on to become one of the strongest Western economies.
And this is the lesson drawn by the British government. Hence, the remarks of the Chancellor of the Exchequer, George Osborne, who yesterday announced an unprecedented four-year spending review. According to Osborne, every Cabinet minister will have to justify, in front of a panel of colleagues, every pound they spend. He said the task ahead represented “the great national challenge of our generation” and that after years of waste, debt and irresponsibility it was time to bring public spending under control, guided by the principle that people should ask “what needs to be done by government and what we can afford to do”.
The Canadian experience certainly makes for an interesting story, although we suspect that the IMF threat was significantly overstated. In 1995, Canada had a debt to GDP ratio that was around half of that of Italy and Belgium. Yet curiously, those countries were never deemed to be ready-made victims for the Fund’s Little Shop of Horrors, even as Canada was supposedly threatened with the prospect of becoming a ward of the IMF a la the United Kingdom in 1976. In truth, the IMF threat represented yet another in a series of manufactured crises that enabled longstanding opponents of government spending to muscle through budget cuts in vital and politically popular social programs.
The reality is somewhat more complex, as Professor Mario Seccareccia of the University of Ottawa has noted in a paper entitled, Whose Canada? Continental Integration, Fortress North America, and the Corporate Agenda (pp. 234-58). In the paper, Seccareccia noted the real reasons for the “success” of the Chretien/Martin austerity programs:
1. High growth in the US, Canada’s largest trading partner, a sharply declining Canadian dollar (which fell as low as .62 cents against the greenback), and the implementation of the North American Free Trade Agreement (NAFTA), all of which combined to push the export sector’s share of Canadian GDP to 45% by 2000 (now about 33%), and
2. An expansionary monetary policy which did significantly stimulate consumer spending, and which was sustained until the financial crisis.
The turnaround emerged despite the fact that investment remained weak relative to historic economic recoveries. But the massive turn in the country’s external sector was largely made possible through a revival of growth in the US (Canada’s largest trading partner). The stock market boom in the US, the high tech bubble, and the beginnings of the American real estate boom created huge demand for Canadian exports, which largely drove Canada’s recovery. (All of which were fueled by huge increases in US private debt growth, another malign effect of the Clinton budget surpluses.) If anything, this vast improvement in Canada’s external account largely offset the deflationary impact of the fiscal austerity which, in any case, likely impeded, rather than facilitated, economic recovery, given the slashing of employment insurance and social welfare benefits.
The other byproduct of this Canadian “budget miracle” was the increasing indebtedness of the Canadian private sector, a phenomenon mirrored in the US by the Clinton Administration, which repeatedly recorded budget surpluses in the late 1990s. Again, this is no surprise to those of us who adopt the financial balances approach, but it does give a fuller (and less flattering) picture of the ultimate impacts of eliminating Canadian “fiscal profligacy”.
The chart above highlights the importance of Canada’s restrictive fiscal policy in pushing the household sector balances increasingly into the red until the financial crisis of 2008 (also accompanied by a massive increase in the Canadian budget deficit, which almost certainly cushioned the impact of the crisis in Canada).
In any event, Canada’s export boom of the 1990s is a miracle that could certainly not be repeated today, given the decline in global economic growth, and the extent to which the ailing manufacturing exports sector is now being hammered by the so-called “Dutch disease” as a consequence of the Canadian dollar’s relative strength.
By the same token, the United Kingdom would hardly do any better today, given global recessionary pressures and the corresponding implosion of its largest export markets in Europe and the US. If Prime Minister David Cameron is indeed preparing Britons for a Canadian-style attack on the deficit, he is acting on the basis of profoundly misguided historical information. Canada’s growth was largely stock market bubble-driven, so both the US budget surpluses and the Canadian miracle were based on a one-off fluke. From the sector balances approach, we know that unless you get something like one of the biggest bubbles of all time in your own economy or in a major trading partner’s, don’t count on recovery in the face of fiscal retrenchment. The UK government’s current monomaniacal fixation on deficits and its simplistic reading of Canadian history will do nothing more than cut back on vital stimulus that has cushioned the UK from a far greater disaster, all to satisfy the loons in the conservative press and some threatening types in ratings agencies . Not only would a Canadian-style fiscal assault be a nonsensical short-run strategy, given the debt levels the UK private sector is carrying at present, it would not be a sustainable growth policy in the medium-term. Eventually, the private balance sheets would become too fragile and households would attempt to increase saving even further. This would reduce aggregate demand further and income adjustments would force the public balance into an even larger deficit and set the deficit hawks toward cutting government spending with an even greater sense of urgency. The Canadian experience teaches us very little. There is never a case for fiscal austerity in periods of cyclical weakness unless you can recreate the conditions of a financial bubble. But aren’t we paying the price for that today?
Roosevelt Institute Senior Fellow Marshall Auerback is a market analyst and commentator.
A very plausible reading of the Canadian situation in the 90’s. Here in Canada we certainly remember the effects of the federal government’s cuts and their consequences for the provincial governments and, of course, the population in general.
Posted by Walter Dubiel | June 9th, 2010 at 12:15 pm
I remember it vividly as well, Walter. I’m Canadian and my best friend was working with Paul Martin at the time, so I’m well versed in the history of the period. Paul Martin did many good things in his time in office (particularly his courageous stand against the Americans, indeed the entire G7, on financial deregulation), but he was wrong on the deficit reduction program. Indeed, throughout most of the era of the 1960s, 1970s and 1980s, the corporate sector had been a net borrower, while the household sector was a net lender. This all changed in Canada during the mid-1990s. As discussed elsewhere by Mario Seccareccia, this reversal of the net lending/borrowing position of the business and household sectors is of critical importance in understanding the evolution of financial capitalism over the last decade, with much of the speculative drive having been fueled by the growing savings of the corporate sector. It was the rentier behaviour of the corporate sector, with the latter finding it ever more lucrative to engage in financial acquisitions, which largely led to an abandoning of productive investment since the 1990s.
Posted by Marshall Auerback | June 9th, 2010 at 12:43 pm
Another great piece Marshall.
The seemingly universal drive for austerity among nations has an interesting parallel in the protectionism that was a major cause of the Great Depression. When every nation went protectionist, the result was retrenchment all over the world.
Here every nation is doing austerity, hoping to eventually have an export-led recovery. This crazy, there can be nothing but reduced exports for all when everyone decides to do austerity at once. Nations are boxing themselves into another fallacy of composition and as you and Rob Parenteau recently wrote. That can very well lead to Great Depression II.
Posted by Joe Firestone | June 9th, 2010 at 8:55 pm
Interesting comparison but as a Brit living in Canada and knowing a bit of experience from both countries I’m not sure I agree.
The key is not to underestimate Mervyn King and his power to keep down the Great British Krona.
The UK is pretty special in Europe (actually a bigger free trade zone than NAFTA) where they are the second largest economy after Germany and yet have their own currency.
If growth fails to pick up watch out for UK interest rates being kept low. This would then mirror closer the Canadian experience vs the US Dollar; and also encourage households to stay indebted.
Out of all currencies devaluing recently GBP has managed to really win out on this front; and stay down against all majors and trading partners. Even the Euro’s fall from grace hasn’t harmed GBP in its mission to stay down. Merv/Cameron/Clegg will continue to preside over a weak Sterling until eventually the UK is competitive and an export-led growth results.
A threat to the strategy could be inflation. But with unemployment high and labour markets relatively flexible vs their European counterparts this is unlikely.
What they don’t want is a disorderly devaluation brought on by bond markets losing faith because of a ballooning deficit. If they can cut their deficit; maintain their credit rating AND slowly and steadily keep the pound down this will be the best medicine.
At the end of the day the private sector will always be a far better exporter than the public sector in the UK. So they’re using some of the public sector savings to keep private corporation taxes down.
—
Furthermore:
“IMPEDED, rather than facilitated, economic recovery, given the slashing of employment insurance and social welfare benefits”
This is an rather short-term analysis. Sure slashing EI and welfare would be a small drag on demand… but heck there’s nothing like a super generous EI and Welfare system to keep people from seeking work altogether.
You’ve got to have a system where it’s always better for an employable worker to be better off in work rather than on EI and welfare. Prior to Chretien’s cuts this was not always the case.
Once people are motivated to seek work you get lots of benefits:
1) Multiplier effect as worker produces and consumes more.
2) Canadian corporations stay competitive. Nothing worse than being unable to hire people at a globally competitive wage because your potential employees are better off on EI / Welfare.
3) Cutting government allows you to potentially lower taxes later down the road; cutting taxes is again a stimulus to demand.
Posted by Peter Reynolds | June 10th, 2010 at 1:42 am
Your comments about people being “motivated to seek work” is nonsensical. The view that you are expressing is unemployment is caused by laziness or lack of training. The argument is essentially: “I can get a job, therefore all the unemployed could get jobs if only they tried harder, or got better education and training”.
The way I go about demonstrating that fallacy is a dogs and bones example which my friend Randy Wray teaches his undergraduate students to help them understand the fallacy of composition. Say we have 10 dogs and we bury 9 bones in the backyard. We send the dogs out to find bones. At least one dog will come back without a bone.
We decide that the problem is lack of training. We put that dog through rigorous training in the latest bone finding techniques. We bury 9 bones and send the 10 dogs out again. The trained dog ends up with a bone, but some other dog comes back without a bone (empty-mouthed, so to speak).
The problem, of course, is that there are not enough bones and jobs to go around. It is certainly true that a well-trained and highly motivated jobseeker can usually find a job. But that is no evidence that aggregate unemployment is caused by laziness or lack of training.
We could also go into the common belief that minimum wages cause unemployment. It is at least partly true that for an individual firm, higher wages reduce the number of workers hired. But we cannot extrapolate that to the economy as a whole. Higher wages mean higher income and thus higher consumption spending, which induces firms to employ more labor. So the truth is that economic theory does not tell us that raising minimum wages will lead to more unemployment, indeed, theory tells us it can go the other way—raising the minimum wage could increase employment.
Again, the reason we can reach the wrong conclusion in all of these cases when we aggregate up from the micro level to the macro is because we ignore the impacts that behavior of individuals or firms has on other individuals or firms. That can be OK for the case of the individual firm or household, but is almost certainly incorrect for firms and households taken as a whole.
Your point about King is also mistaken. A country cannot devalue its currency. It can let it float, but a central banker has no control over private portfolio preference shifts. Yes, sterling declined very significantly in the aftermath of the early stages of the crisis and this did help Britain’s trade performance (but the euro zone was still growing relatively strongly) Of far greater significance was the very thing that King now decries - namely the UK’s huge fiscal deficit (equivalent to around 10% of GDP) which vastly cushioned the impact of the economic/financial crisis.
The best “multiplier” is full employment. If you go back to Cary Brown’s classic piece on the New Deal, you can see he uses what I’d have said is intuitively the right measure: a “full employment” measure of the gov’t’s contribution. If you believe, as we do, that that multipliers are positive, you don’t have much problem with the notion of using fiscal to generate full employment.
Cutting government destroys incomes and thereby INCREASES the deficit. You need to get a better understanding of sectoral financial balances before you start making statements like this.
Posted by Marshall Auerback | June 10th, 2010 at 10:08 am
So, instead, the government gives the dog a bone and he has no incentive to go looking in the backyard at all.
Posted by JAWZ | June 10th, 2010 at 4:04 pm
If one wants to se the price Canada had to pay for its absurd policies in the 1990’s, you can consult the Canadian Economics Association presidential address for 1996 by Pierre Fortin in the Canadian Economics Journal
“The great Canadian slump” Canadian Journal of Economics 29 (November. 1996) 761-87.
available at http://www.jstor.org/pss/136214
Jacques René Giguère
Professor of economics
Collège de Sept-Îles
Sept-Îles Québec Canada
Posted by Jacques René Giguère | June 10th, 2010 at 6:48 pm
Good piece. Perhaps one thing in the UK’s favour relative to Canada is that UK corporate sector balance sheets start from a relatively strong position. Commercial property has some painful debt restructuring to go through but the rest of the corporate sector has been delevering since the dotcom bust. So *IF* the flow of credit to the private sector can restart (either through an increase in bank lending or improved access for smaller companies to public debt markets), and *IF* the currently high business confidence levels indicated by surveys prove real and persistent there is a good chance of the corporate sector picking up some of the slack in aggregate demand. Both big ifs, but an upturn in corporate sector investment (which fell 14% in 2009) is inevitable sooner or later….
Another thing to note is that the current apparent Tory zeal for cutting may be largely window dressing. They want to make out they’re going to make huge cuts so that they can tell the public they told them so in two years’ time when everybody’s complaining. In fact I don’t expect the aggregate cuts to be much larger than those proposed by the Labour government which even relatively dovish economists thought struck about the right balance between supporting growth and maintaining fiscal sustainability. Even these plans implied pretty painful cuts, so the new govt is being pragmatic now in emphasising the inevitable pain associated with dealing with the economic legacy it inherited.
And Marshall, your dogs and bones analogy is an example of what economists call the “lump of labour fallacy”. Economists don’t believe it’s correct to think of an economy providing a fixed number of job opportunities. While it is true that with a fixed level of wages, a fixed population size, a fixed level of skills across that population, a fixed capital stock and fixed degree of technological advancement the demand for workers remains about constant, as soon as you change one of those variables the number of jobs changes too. For example, say a country has very high unemployment and also a problem with unreliable electricity supply. Then somebody invents a very efficient solar panel which can be attached to house roofs (so the degree of technological advancement increases). Everybody wants these, so the few people with the skills to build and install them find themselves in high demand and jack up their prices. Unemployed people see this and get trained as solar panel makers and installers (so the skill level increases). They offer their services so companies building and installing solar panels can get cheaper workers (the wage level falls). The companies cut their own prices meaning they can sell more solar panels. So they need to employ more people. So the number of available jobs increases and unemployment falls. And maybe the fact that there’s money to be made installing solar panels motivates some unemployed people who had previously been to lazy to go out and find work to do so. So yes, in any economy there’s always going to be a certain amount of unemployment no matter what, but that’s for a given set of circumstances and if any of those circumstances change, either at the level of one individual going out and getting training or a whole new industry being created, unemployment can fall.
Extending your dog analogy, maybe some of the bones are buried very deep so that as long as the dogs don’t have deep digging skills or invest in mechanical excavators one of them must go without a bone, but once they do, everybody has something to chew on.
This is why economies with more flexible labour markets, better educational systems and better R&D infrastructure tend, other things equal, to have lower unemployment.
Posted by Bryan Strongfellow III | June 11th, 2010 at 5:50 am
I agree with a lot of Bryan’s response.
Replying directly to Marshall..
“The problem, of course, is that there are not enough bones and jobs to go around. It is certainly true that a well-trained and highly motivated jobseeker can usually find a job. But that is no evidence that aggregate unemployment is caused by laziness or lack of training.”
This analogy is apples and oranges.
Jobs aren’t finite ‘things’ created by employers. More often than not the dog can create his own bone – this is called being an entrepreneur.
A real world example could be…
Take a young teenager keen to keep up with the latest fashions, go to the movies with his friends, drive his girlfriend to the beach etc. Now give that teenager a decent sized allowance (read welfare) and those desires can be fulfilled without any further work. Alternatively don’t give him an allowance but suggest to him that if he can find a way to earn that money, well first and foremost the government won’t take 20, 30, 40% of it away from him. Encourage him. Ensure property rights will be respected and so forth and in the right environment that young man could:
* Fly post the entire neighbourhood offering to mow their lawns; or plant flowers and earn a bit of income.
* Offer to shovel snow in the winter for people.
* Babysit etc. etc.
We’re human beings Marshall! Please if you see / compare us to dogs and bones frankly that’s quite patronising.
(Please note I’m not against allowances for teenagers if they use their time to study rather than be an entrepreneur!)
–
Now regarding King. No King absolutely has the power to devalue GBP. He authorised £200bn of quantitive easing and slashed interest rates harder and faster than other regimes.
Yes ultimately other factors – such as North Sea oil running out and a property bubble bursting – probably also influenced the situation. But in a free floating environment printing money and keeping interest rates down and two HUGE influences on a currencies international value.
Printing money particularly.
A valid argument you could have offered would be that kind himself is only mandated to control inflation; and if his sinks GBP too far it will import inflation. So that’s something he needs to work out with his political masters… whether they accept a higher inflation target perhaps (at the moment that almost appears to be happening as he keeps writing the mandated apology letter….)
“Higher wages mean higher income and thus higher consumption spending, which induces firms to employ more labor.”
Higher wages in a globalised free-trade economy means your companies are often less globally competitive so the jobs go elsewhere.
Higher wages should be fundamentally earned through improvements in education and investment in skills, knowledge and know-how. Then they can lead sustainably into higher consumption spending and so forth.
Posted by Peter Reynolds | June 11th, 2010 at 9:09 am
Paul Krugman of late has been worried that governments like the UK are relying too much on expenditure switching policies to offset downward movements in expenditure adjusting. He links to your very excellent piece which everyone involved in this debate should read. Well done!
Posted by pgl | June 11th, 2010 at 9:55 am
pgl: thanks for pointing that out! For anyone who wants that Krugman link, it’s here: http://krugman.blogs.nytimes.com/2010/06/10/oy-canada/
-Bryce
Posted by FERI | June 11th, 2010 at 10:15 am
While the economic analysis is indisputable — the U.S. recovery spurred Canadian exports — what’s missing is the fiscal measures. Taxes were higher, transfers to the provinces were cut and the Unemployment Insurance fund ran a considerable surplus that was consolidated with general government revenues.
In practice, what this meant was that fewer of those who paid unemployment insurance premiums could collect; certain health care services were delisted; Canada Pension Plan premiums increased; infrastructure spending was deferred and broad tax cuts didn’t occur until 2000. Indeed, tax brackets weren’t even indexed to inflation.
Posted by RSB | June 11th, 2010 at 3:35 pm
Peter,
No attempt to be patronising, but I do think the notion that somehow if people are sufficiently starved, they will be increasingly motivated to look for non-existent jobs, is unrealistic and insulting to people who genuinely want to work.
Higher wages can be earned when there are policies to support full employment. It’s that simple. If governments insist on pretending they have to “finance” their spending and follow the path the UK is now taking (among other nations heading down the austerity path) then the real bill will be the lost real income arising from the cuts in public spending, the lost private command on real resources arising from the tax hikes. These costs will enormous.
Yes, some entrepreneurs will create new jobs, but in the aggregate, if we continue to be stingy in filling a lots output gap, then you won’t get an overall increase in employment. If I stand up to watch a football game, I might be able to see better, but if everybody does it, my view is once again hindered.
Further, the only way of calibrating the worth of the fiscal interventions is to estimate outcomes such as “how many jobs were saved”. We can roughly estimate the extra spending impact on GDP and hence employment growth. The important point is that in focusing on jobs we are displaying the appropriate priorities. In focusing on largely irrelevant aggregates such as the size of the deficit or the public debt ratio, we are exhibiting a wrong set of policy priorities.
King’s QE had no impact on the value of sterling per se. The Bank of England was buying one type of financial asset (private holdings of bonds, company paper) and exchanging it for another (reserve balances at the BOE). The net financial assets in the private sector are in fact unchanged although the portfolio composition of those assets is altered (maturity substitution) which changes yields and returns.
The mainstream belief is that quantitative easing will stimulate the economy sufficiently to put a brake on the downward spiral of lost production and the increasing unemployment.
It is based on the erroneous belief that the banks need reserves before they can lend and that quantititative easing provides those reserves. That is a major misrepresentation of the way the banking system actually operates. But the mainstream position asserts (wrongly) that banks only lend if they have prior reserves. The illusion is that a bank is an institution that accepts deposits to build up reserves and then on-lends them at a margin to make money. The conceptualisation suggests that if it doesn’t have adequate reserves then it cannot lend. So the presupposition is that by adding to bank reserves, quantitative easing will help lending.
But this is a completely incorrect depiction of how banks operate. Bank lending is not “reserve constrained”. Banks lend to any credit worthy customer they can find and then worry about their reserve positions afterwards. If they are short of reserves (their reserve accounts have to be in positive balance each day and in some countries central banks require certain ratios to be maintained) then they borrow from each other in the interbank market or, ultimately, they will borrow from the central bank through the so-called discount window. They are reluctant to use the latter facility because it carries a penalty (higher interest cost).
The point is that building bank reserves will not increase the bank’s capacity to lend. Loans create deposits which generate reserves.
The reason that the commercial banks are currently not lending much is because they are not convinced there are credit worthy customers on their doorstep. In the current climate the assessment of what is credit worthy has become very strict compared to the lax days as the top of the boom approached.
Now, did private portfolio investors react to the onset of QE by selling sterling assets and buying some other currency (which would have had the effect of depreciating the relative value of the pound)? Perhaps. But no economic theory can definitively determine private portfolio preference shifts. It’s a guess. My point is, in the absence of a fixed exchange rate, you can’t “devalue” your currency. You can let it float, which is what the UK does, and let the markets determine the value.
Which brings us back to fiscal policy, which Mervyn King has consistently decried, even as it saved the UK from a fate not unlike that of Iceland.
Posted by Marshall Auerback | June 11th, 2010 at 4:09 pm
RSB is right to mention that “Indeed, tax brackets weren’t even indexed to inflation.”
My understanding is that the de-indexing of the basic income tax deduction was the most important measure taken by Paul Martin to eliminate Canada’s budget deficit in the 1990s. This was, in effect, a way of raising taxex, but one that largely went unnoticed.
Posted by Patrick Cummins | June 14th, 2010 at 2:04 am
The de-indexation of tax brackets actually goes back to Michael Wilson’s 1986 budget.
Posted by RSB | June 15th, 2010 at 5:15 pm
This is an excellent article. I too lived through this period and I think the media have shown reverence for the deficit cutting mantra by only looking at the superficial results of these policies.
Those cutbacks in the 1990s led to some policy boomerangs that have not really been investigated. Politicians and the media have been singularly focused on public indebtedness by countries. There has been a view that the level of indebtedness in the private sphere (households and business etc. ) didn’t really matter because the invisible hand would work its magic to fix any problem with excess leverage.
In reality public indebtedness and private indebtedness are intertwined and if we wish to deal with the overall problem of leverage the rather simplistic ’slash and burn’ approach has led to unintended consequences.
Cutbacks to the public sector (those civil servants are the usual targets for politicians) has led to a very steep decline in the quality of infrastructure, regulation and integrity of the market economy. All we have to do is look at the the SEC or FEMA in the United States or the federal public service system across Canada today. Government bureaucracies are largely damaged beyond repair are are incapable of fulfilling their most basic core functions.
Peter
Posted by pathrik | June 16th, 2010 at 9:46 am
If not now, when? Can you commit to endorsing spending cuts once the economy recovers, for some reasonable definition of “recover?” Or are you saying “not now” when you really mean “never?”
Posted by Brandon Berg | June 16th, 2010 at 8:47 pm
Actually, that picture is not entirely correct - over the same period of time, many unfunded programs were foisted on the provinces, which saw their deficits increase as a result. So on an aggregate basis, the picture isn’t as rosy as it was portrayed. Further, different provinces had different tax bases and the net result was an exacerbation of the move from uniform “national” debt to varying “regional” debt. Canada is a bit of a special situation that way.
Posted by Jim Laird | June 17th, 2010 at 10:09 am
Here’s a novel idea! Get the $ back from the rich who stole it in the first place rather than punishing the poor.
Posted by jc | July 17th, 2010 at 1:31 pm
The economic situations of both countries were different in the 90´s and today as well. What Paul Martin did in the past for recovering economy was more then better. We wouldn’t have such good position today, if he didn’t do all changes. It is known for decades that investments (both public and private) into building infrastructure, R&D development, to build sophisticated educational system and to make labour market more flexible are the best invested money ever. And furthermore to prepare conditions for sustainable development of the economy should be based on clean technologies. This can bring more business opportunities and consequently increase employment. I assume this is the time to see national economic situations in wider dimensions.
Posted by Julie K. | August 19th, 2010 at 6:54 am