Canada's Road to Balanced Budgets
By David Henderson
Arnold has commented on Tyler Cowen’s post on the steps the Canadian government took in the 1990s to reduce budget deficits and turn them into surpluses. The government did it mainly with reductions in the growth of government spending and secondarily with tax increases. I have three comments on the Canadian situation and on the related issue of the Tea Party.
1. I disagree with Arnold that the Canadian case has much to do with what he calls “with less social distance between elites and mass.” I grew up in Canada and my rough recollection is that the social distance between most of the rest of country and Ottawa (with Ottawa as a proxy for the elite) is about the same as the social distance between the rest of the U.S. and D.C. (with D.C. as a proxy for the elite.) Granted that I was 21 when I left Canada and there’s a lot I didn’t know but when I go back–and I do so every summer–I don’t see a big difference in that respect between Canada and the U.S.
2. One irony not noted by Tyler is that one of the main people responsible for turning around Canada’s dismal fiscal situation, Finance Minister Paul Martin, is the son of one of the main people responsible for causing it, Paul Martin, Minister of National Health and Welfare from 1946 to 1957 under Prime Minister Louis St. Laurent. Martin pere is sometimes referred to as the “father of Medicare” because he nationalized hospital insurance in the 1950s. (Martin fils, by the way, was a lousy PM but a very good FM.)
3. One of the commenters on Arnold’s post said that on Econlog, he had not read anything positive about the Tea Party by anyone but Arnold. I would refer him to my post on the Tea Party event of April 15, 2009. I posted on April 17, 2009. This year, like last year, I was the only one who showed up with an antiwar sign. The difference was that this year I learned from commenter RL on last year’s post. Rather than saying, “End the War,” it said, “End the Wars.”