In the lead up to, and wake of, the US Presidential election, Canadians have had no shortage of opinions about the state of affairs of our southern neighbors. Judging by the comments to phone-in shows from local talk radio to the CBC's nationally broadcast Cross Country Checkup yesterday, many are rather smug.
The assumption that our economy is stronger is based on some valid arguments - running consecutive surpluses at the federal level is one of them, the "strengthening" Canadian dollar is another. However, Canadians seem blissfully unaware of what the falling US dollar means for our trade based economy. Many seem to believe that the most important consequence is less costly vacations in the US.
In reality, the huge competitive advantage a 65 cent dollar gave exporters is beginning to change. Canadians are going to have to become more productive and efficient to make up the difference. We're already about 25% less productive than the average American - with a 25% lower standard of living to show for it. Unless you're one of those vacationing civil servants, you're probably going to feel the effects.
The most common misconception is that the USA is suffering from high unemployment and a crushing national debt. It's not really our fault - this been the steady mantra of ill-informed news media too lazy or unmotivated to do a little fact checking. In fact, unemployment rates in the US today are around the same level as during the Clinton years. It helps to place US data up against our own.
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Unemployment rate (Oct'04): Fed Debt as % of GDP (2003): |
US - 5.5% US - 36.1% |
Canada - 7.1% Canada - 42% |
Most industrialized countries have debts hovering around the 100% of GDP mark. Historically, the US federal debt was at an alltime high during WWII when it reached 125% of GDP.
Is the current deficit and military spending high? Yes and no. There is cause for concern in any deficit spending, but then again - the US is at war and we're not. And as military spending goes, the US is currently a far cry from their peak (1945), when they spent 38.5% of GNP on the military. Today, the US spends 3.6% of GDP on the military, lower than the average of 5.7% spent during the post-war years of 1940- 2000. *
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Smugness, on Cross Country Checkup? Get the heck out of here!
I might note that in my daily e-mail digest of Czech news from Czech radio, there was a report about the Czech crown being as high against the US $ as it had ever been. Does that mean that the Czech republic is an economic powerhouse on the scale that these fools think Canada is?
A higher Canadian dollar is a good thing for the average consumer, since so many of our goods are imports. However, for the economy as a whole, its not so great, as you pointed out, since we need to export to live.... Economic illiteracy at the CBC, another shock, huh?