Sunday, January 04, 2004

Canadian Socialist Hubris
I think this is pretty funny. This story ran back on Dec 23, but I have been too sick to blog much. On the radio show Marketplace, on NPR, they ran a story that began like this:

The heads of Canada’s five major banks have thrown down the gauntlet: They say Canada’s per capita gross domestic product can outpace that of the U.S. by the year 2015. In other words, it would have to outpace U.S growth by an average of 1.6 percent a year. And, the banks don't intend to overtake the U.S. with trickle down economics: their proposal involves taxing the wealthy and increasing social services for all.

Ha Ha Ha! That is rich. They think Canada is going to grow 50% faster than their biggest trading partner, and the most dynamic economy in the world! For 11 straight years. By raising taxes. This is beyond absurd. I wrote to Marketplace to share my views, and they said they might put my comments on the air. That would be fun. I'd also like to track down the head of one of those banks and see if he will put his money where his mouth is. It would be the easiest money ever.

Canadians themselves don't seem to have that much confidence. About 0.1% of Canadians move to the US annually, which may not sound like much. However, those that leave are 4 times as likely to have a college degree. Plus, people making over $150,000 a year are 7 times as likely to leave. That is not a good way to raise per capita GDP. Here are the top sectors affected:

In 1996, 10 industries accounted for more than one-fifth of the nearly 27,000 taxfilers who left Canada. These industries included hospitals, university education, and elementary and secondary education. Also in the top 10 was a cluster of high-technology industries, including engineering, computer services, and communications and other electronic equipment. Movers appeared to be concentrated in knowledge-intensive industrial sectors.

In the most recent (3rd) quarter, Canada grew by 1.1%. The Canadian government is projecting that Canada will finish 2003 up 1.9% and will grow 3% in 2004. The same document projects that US growth will be 2.7% and 4%. That's not going to help them catch up either. Furthermore, that US forecast assumed the US would grow 5% in the 3rd quarter, when in fact, we grew 8.2%. These socialsit fantasies are completely divorced from reality!

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