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Google "1993 Canadian Debt Downgrade" for some interesting reading. Their situation is not an exact parallel to the U.S.', but gives some guidance nonetheless. Canada's debt-to-GDP ratio was in the low 70s%, as is the U.S.' currently. Sorry I do not remember the exact figures, though these are close. Two things about Canada's situation really stuck out to me.
First, the Canadians' debt reduction success really benefited from the strong growth of the U.S. economy in the late 90s. Export at that time was 40% of Canadian GDP, and 80% of their exports were to the U.S. In a word, strong economic growth in the U.S. contributed to the rapid - relatively speaking - paydown of their debt. The strong economic growth is estimated by several sources, as contributing 55% to the debt paydown. Lesson? How do we get this economy going?
Second, the Canadian Democratic Liberal Party, who had recently been elected, instituted something called Prudent Budgeting, which among other things focused on one year budgets. By doing so, the government avoided overly rosey projections of budgeting programs 5, 10 years down the rode. Thus coming up with more realistic, and smaller budgets. This and other tough choices, and cuts are estimated to have contributed 35% +/- to deficit reduction. This is exactly opposite of how the Canadian federal government went about budgeting, and how the U.S. federal government historically goes about budgeting.
There were two tax increases that also contributed to the Canadian debt reduction success . Something, we thus far, have not come to grips with. Personally, I believe the tax system in the U.S. needs radical change to be less of a carrot and stick system. But, I digress. And that is a discussion all unto itself.
I purposely did not list any links. Though I can tell you the sources ranged from clearly left leaning sources, Canadian newspaper on-line editions, familiar U.S. new sources and even a U.K. consulting group. Why? Because this mess we are in is not the making of any particular person or party. This mess did not magically appear in the past couple of years, nor ten. If you are a baby boomer, then one can trace it back at least until the mid-to-late 60s. Probably further, if one is so inclined. Call it a lifestyle choice mess.
I am interested to see your thoughts on the Canadian fix and how it might, or might not be instructive for the U.S.
One other thing. I am not Canadian, though I have vacationed there a couple of times.
Canada was a mess then because they were a commodity country not getting anything out of the domestic economy. Deflation in Asia during the 90s and the strong US dollar was not helping them either. The immediate decision was a tax increase in the GST which at first was an economy killer. It was grim but what eventually pulled them out was firming demand for commodities and a weakening US dollar helping goose the commodity boom. Plus a nice run in immigration helped too, bringing in a lot of money from Hong Kong when many feared the handover to China. So really it was a lot of factors and it doesn't necessarily point to lessons which could be used. Commodity boom and an untapped consumer economy gave Canada much of its opportunity.
The problem, well the MAIN problem, is that one group of those charged with resolving the problem(s) we have...
chooses to address the rest of the problems as though there is only one side to the accounting ledger.
Setting aside the specifics of what might (also) be done with that other side of the ledger...
they simply aren't willing to admit that the income side of the ledger even exists.
---
This sort of head in the sand refusal to accept reality is not politics.
It's not even economics.
It is solely about an ideology.
A twisted and sad ideology that if left alone will ruin our country.
Don't let it happen.
The problem, well the MAIN problem, is that one group of those charged with resolving the problem(s) we have...
chooses to address the rest of the problems as though there is only one side to the accounting ledger.
Setting aside the specifics of what might (also) be done with that other side of the ledger...
they simply aren't willing to admit that the income side of the ledger even exists.
---
This sort of head in the sand refusal to accept reality is not politics.
It's not even economics.
It is solely about an ideology.
A twisted and sad ideology that if left alone will ruin our country.
Which was why it was manufactured and marketed by Corporate "talk shows."
You are familiar with the Koch Brothers? This is a manufactured product.
Quote:
Don't let it happen.
Such martyrs and zealots make poor politicians.
Look a little deeper. These are not martyrs or even zealots.
This is just this year's fashion.
Like the Commie threat. Or the Islamer Fascistismer Terrorists are coming to get US.
Just Babbling Nonsense.
That is why if you ask or go anywhere below the surface there is no substance.
That is why if you ask or go anywhere below the surface there is no substance.
We are dealing with McDolts. That is it.
If the McDolt's hadn't gotten 60 of their followers into Congress...
I'd agree with your dismissal of their influence.
But we have another 18 months of them being decision makers that have to be dealt with...
what I'm most concerned with is that a LOT of idiots out there still agree with them (and the Koch's) and might actually add to their numbers.
The housing crisis is going to kill home values and the banking system in 2012. It is way worse than we all know. Nothing looks good in the next few years. Nothing. It will be quite a few years to see any light if it doesn't bankrupt the country and the banking system. The depression of the 1930's will look like the good ole days.
So............uh, a national debt that is GOING to be 20-22 TRILLION by the end of 2016 is NO PROB...........HUH?
So deal the problems that have sunk US into deeper and deeper into debt for the last 30 years . . . .
Imbalanced Trade -- kill the Trade Deals and bring back Tariffs on imbalanced trade.
Oil. Take US off Oil. We go deeper and deeper in debt on this year after year since the late 70's.
Military. We are funding a Global Psychopath Level War Machine. With Endless Wars just going and going and going.
And slap harsh regulations back on the banks and insurance industries.
Bring those in line, and all the budgets would balance -- Federal, State, and Local .gov, US households, and business, too.
B U T -- the Repubs/Tea Party is not going to touch any of that -- because their Corporate Supporters/Funders are for ALL of that which has been going on.
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But, I digress. And that is a discussion all unto itself.
