[Newsbot]

Title: Canada's "basket case" moment
Category: Political
Posted By: Robair
Date: 2011-11-21 11:51:06
Canadian

[Guy_Fawkes]

I good read.

[DrCaleb]

Guy_Fawkes Guy_Fawkes:

I good read.

I are not good read. I like pikters.

[andyt]

The diff is that Canada did it during a world boom. The US was going great guns, on track to eliminate their debt, never mind deficit by growth in the economy. China was getting stronger, etc. This time, the whole world is really a basket case, so the options for the US are much more limited. Same with Europe. Drastically shrink demand by cutting back govt, and there's no export economy to bail you out.

[DrCaleb]

But yes Guy - it's a good read!

[Public_Domain]

[BartSimpson]

andyt andyt:

The US was going great guns, on track to eliminate their debt, never mind deficit by growth in the economy.

Not really. The best year for US finances was 1999 and that was partly due to temporary savings as long term defense contracts ended and it was also due (mostly) to the increased revenue stream of the Dot Com boom. We only had a $17 billion dollar deficit that year but at no point in the recent past have we been on track to reduce our debt.

As of now we've passed both $15 trillion in debt and our debt has also passed the important benchmark of 100% of GDP - meaning that it is now statistically improbable that the US can ever pay off its debt under current dollar values and interest rates.

Translation: I've moved a chunk of my holdings into CDN$ because in two, maybe three years the USA will need to impose a regime of 16% to 30% inflation in order to obviate our debt...and that observation came from Timothy Geithner, Obama's Treasury Secretary.

I figure by 2015 the exchange rate will be CDN$1 to US$2+

Thus my money is in HSBC.

[bootlegga]

Maybe it's just deja vu, but I'm sure this has been posted before.

[sandorski]

The article points out many of the differences that made the Deficit elimination possible, but didn't address some other differences that make the US situation far more difficult. That mainly boils down to the differences in the Political System. A Canadian Prime Minister simply has way more power to set an agenda than a US President does, even if the President has a "Majority" of his Party in power(especially if he happens to be a Democrat, where Party discipline seems to be non-existent). Add in the Minority party's ability to filibuster, their willingness to do it, their self proclaimed goal to make Obama a 1 term President, their insistence on further Tax Cuts despite Tax Rates being at historic lows, and you have a situation where fixing the Deficit in the US is all but impossible at this time.

[Guy_Fawkes]

DrCaleb DrCaleb:

Guy_Fawkes Guy_Fawkes:

I good read.

I are not good read. I like pikters.