When looking at how the ongoing debt negotiations have gone back and forth for weeks, there is one thing that my friends on the Left can’t deny–that while the President and the liberal members of congress have repeatedly criticized the plans put forth by Republicans, they haven’t put forward a plan of their own. Further, the notion of making cuts to entitlement programs (even though most of the cuts aren’t really cuts) causes the Left to jump up and down and talk about how much the cuts are going to negatively affect Li’l Jimmy and how it’s only fair if we increase taxes on high income earners.
(Sidenote: “Li’l Jimmy” is a fictitious character being used as part of a WWE storyline each week by wrestler R-Truth. I and my other wrestling fan friends who also talk politics have found “Li’l Jimmy” to be useful in these conversations.)
Fred Barnes in a Wall Street Journal piece talks about how Canada made it’s way out of financial crisis and has arguably created a stronger economy than the US. The irony? It was the Left in Canada that led the reversal, and they did it through spending cuts, not tax increases:
Mr. Chretien and his finance minister, Paul Martin, took decisive action. “Canadians have told us that they want the deficit brought down by reducing government spending, not by raising taxes, and we agree,” Mr. Martin said. The new administration slashed spending. Unemployment benefits were cut by nearly 40%. The ratio of spending cuts to tax increases was nearly 7-to-1. Federal employment was reduced by 14%. Canada’s national railway and air-traffic-control system were privatized.
The economy rebounded. Between 1995 and 1998, a $36.6 billion deficit turned into a $3 billion surplus. Canada’s debt-to-GDP ratio was cut in half in a decade. Canada now has faster economic growth than America (3.3% in 2010, compared to 2.9% in the U.S.), a lower jobless rate (7.2% in June, when the U.S. rate was 9.2%), a deficit-to-GDP ratio that’s a quarter of ours, and a stronger dollar.
What’s most remarkable about the Canadian turnaround: It was led by liberals. Mr. Chretien and Mr. Martin were leaders of the Liberal Party. Yet they responded to the clear wishes of Canadians and, to the surprise of the political class, shifted to the right. Or to the center, the two leaders would say.
I wonder what the likelihood of this happening in the US would be.