November 26, 2012

For the last 20 years, the Canadian government has worked to reduce federal spending. Our government can learn a few lessons from our neighbors to the north.

Today, Canada’s federal government spending accounts for only 38 percent of government spending at all levels. By comparison, in the U.S., the federal government accounts for 71 percent of all government spending.

The Canadian government has cut spending everywhere except health care. According to The Heritage Foundation’s Paul Bremmer, Canada’s budget cuts fall in line with many of Heritage’s proposed cuts:

The Canadian government, among other changes, altered benefit schedules for the Canadian Pension Plan to reduce the total amount of benefits paid.

In a similar vein, The Heritage Foundation suggests a variety of benefit changes to Social Security that would strengthen the program’s finances, for example, by raising the eligibility age slightly and replacing cost of living adjustments with the Chained Consumer Price Index for a more targeted measure of inflation in consumer goods. Bolder changes include gradually introducing a flat benefit that targets scarce resources to those seniors who need them the most and provides all seniors with protection from poverty in retirement.

Canada also cut corporate income tax rates. The U.S. has the highest rate among its competitors in the industrialized world. The combined federal and state corporate rate in the U.S. is over 39 percent. Canada now has a combined rate of only 25 percent.

Across the Atlantic, however, European countries have done the opposite. They have increased national government spending, with dangerous consequences:

High levels of spending on social welfare programs are at the heart of the problem. Greece, for example, spent 42 percent of its federal budget on social benefits in 2009, according to Aristides Hatzis from the University of Athens. Spain is slated to spend 63 percent of its budget on social expenditures in fiscal year 2013, according to Pedro Schwartz from Universidad San Pablo CEU.

Here in the United States, we have all the ingredients necessary to create a similar debt crisis in the not-so-distant future. Over the past four decades, federal spending has increased 288 percent, nearly quadrupling in real terms. Thirty-two cents out of every dollar spent was borrowed in 2012. Debt held by the public is a staggering 73 percent of GDP, and our government has run trillion-dollar budget deficits four years in a row.

This doesn’t need to be America’s future, though. The Heritage Foundation has developed a plan called Saving the American Dream to cut the debt, reduce spending and balance the budget.

Do you think America should borrow and spend less?

Comments (18)

Patricia - November 27, 2012

Believe me, if I can see the hand writing on the wall, then there must be something to all this excess federal spending and where it will take us. Everyone seem’s so afraid to go against what ever the president want’s, even when it’s wrong and will not solve the problem. I can’t for the life of me, see where the harm is, in cutting the spending of money we don’t have. It’s hard to imagine what this nation will be like after 4 more year’s of free spending and loaning money we don’t have, to nations that have no respect or love for us. Every one seems to think this president is so great. Well, let him prove it and get us out of this mess and make it better for everyone. That’s his job. Let those who have the constitutional right to make spending decisions do their job, not allowing the president to make his usual power grab, if it is going to harm this nation in any way. All the power grabbing he has done so far has only made things worse.

Roger Conklin - November 27, 2012

Unlike the US, Canada does not subject its citizens who live and work outside of Canada to Canadian income taxes. So Canadians go abroad and sell Canadian exports, paying taxes where they live and giving Canada a balance in it its world trade. The US continues to subject Americans who do this to US income tax, in addition to being subject to taxation where they live abroad. So Americans, unable to compete in the world job market, stay home and the US has a $750 bilion world trade deficit; the direct result of which is 7.9 million jobs producing for export that have been destroyed. Exports don’t sell themselves, but nobody in Washington seems to understand that. The US trade deficit is currently increasing by $2 billion per day. Tell me why this makes any sense.

charles king - November 27, 2012

I, think the republicans have lost their back bone looks like they will give obama everything he wants if they do this the party is lost I will never vote republican again or send any more money!!! I speak for thousands that wont take the time to let congress know. please pass this on also we dont need to change the party we need to change the people who are on the free gov. ride!!!!

Holly Chapo - November 27, 2012

Can a family operate like the federal government? It would be bankrupt in no time. The States can’t keep operating that way, except for California, Illinois and New York. And where are they? People are leaving those states.
However, it is up to us – we, the people – to put the pressure on our representatives to borrow and spend less, to balance budgets. We elected them. They work for us and they need to be reminded of that in no uncertain terms. Everyone us can call their offices, email or write letters and tell them what we want. We can also contact John Boehner the same ways and tell him to do the people’s work. Waiting for the government to do what we want is useless. WE have to act!!

Patrick Guire - November 27, 2012

Should any of our members of Congress feel free to spend money which our generation is not providing? Should it not be shameful and even illegal to borrow from our children and grandchildren?

Robert Jamieson - November 27, 2012

Spending is the problem! Spending is the problem! We have to get that message to register. We have to prioritize, we have to negotiate, and we have to address the major issues….Medicare, Social Security, and Health Care (stop the class warfare divissiveness). As a small business owner I’m sitting on my hands….not making a move….until I see some sense coming out of the nonsense!!

Robert Calabro - November 27, 2012

Spending by the federal government should be no more than 15% of GDP! We need a flat income tax of 15% on all businesses! What gets lost in these discussions about taxes is that States tax corporations. Federal and State local taxes should be no more than 20%. Deductions, credits and exemptions cost the Federal govt 1 Trillion dollars a year! We owe China over 1 Trillion! Since when do we place our financial destiny in the hands of a communist country! We are Americans and we can do better. All deductions, credits and exemptions should be eliminated. On the personal side, we should adopt the simpson Bowles rates of 8, 14 and 23%. All deductions, credits and exemptions should be eliminated. If this constitutes a tax increase, then these rates should be lowered in order to make this proposal revenue neutral. Capital gains and dividends should be reduced to 10% and phased out for people who attain the retirement age of 67. Multi national corporations should be allowed to repatriate their profits tax free, provided that they create jobs in America. they would have two years to do so. if they don’t, they would pay a 5% penality. Taxes are the price that we pay for our liberty. A flat tax system is progressive and will create the best certainty for business and the consumer. We currently spend 1 billion hours a year trying to figure out what we owe in taxes. How many nuclear power plants and natural gas and oil could we get out of the ground in this amount of time? Increases in efficiency and productivity is essential to a growing and vibrant economy. A realistic goal for our country is to double our economy from 15 Trillion to 30 Trillion in 18 years. This is assuming 4% economic growth. I do not believe our economy can grow more than 4% due t our excessive debt load. these are my thoughts for the day. Regards and god bless, Robert Calabro.

John Smith - November 27, 2012

Yes, but the idiots in Washington are blind to the consequences that will result if it is continued (even when the evidence is in front of their face).

It is not because they don’t know it is there, but rather they refuse to accept the truth because it calls them “wrong”.

Lately, there have been a lot of people in our society who will not accept the truth just for this reason. This, in my opinion, is probably what the Bible meant when it talked about “those who love and believe lies”.

Iliamna Weisgerber - November 28, 2012

Certainly! Get rid of all the subsidies that are in this country pulling us down the drain. It’s about time people stood up to the work that is involved and quit waiting for subsidies to line their pockets!

joseph waid - November 28, 2012

Yes the Government should borrow and spend less.

Mae C - November 28, 2012

The problem is that we have a controlling group of people in Congress that are wimpy. Congressional members are sworn to uphold the Constitution of the United States which includes presidents. Obama has violated our Constitution in just about every way possible. Why doesn’t Congress stop this? There are some Congress members who would do so, but are outnumbered by the “been there too long, establishment” members. There are few people in this country that can not see simple solutions to the problem, except, it seems, the majority of our Congress. This is what happens when people vote left wing Socialists into Congress.

Sonie - November 28, 2012

Absolutely, however those who wanted more free ice cream came out to vote the B team back in the White House. We have a war going on right here in the U S over more government programs and regulations or one which allows free enterprise to thrive. The Democrats want to hasten the fall of free enterprise.

Rita - November 28, 2012

Absolutely we should borrow and spend less! What is wrong with the elected people in our governement?!! It just makes to sick to my stomach they they cannot agree that we just cannot continue to spend, spend, spend and they keep asking the hard working people of this country to pay more and more in taxes. I am so frighetened for the future of this country. Too many people want free stuff and we can’t afford it. I agree with Charles King’s response. If Republicans don’t get a backbone and they cave in to the Democrats, I will no longer send any money to the Republican Party. I am fed up.

Thomas Lutz - November 28, 2012

I think there is no doubt that we need to spend less than we have income, and start doing it quickly!

Al Kohn - November 28, 2012

Absolutely! It’s time the American people are told the truth. Some sacrifices will have to be made to get the government off our backs. More effort has to be devoted to educating and training the people who are now dependent on government susidies to survive, so that they can become productive citizens with hope for a better future. This country can do it, but it needs strong leadership to advance the American Dream. Unfortunately, we are getting just the opposite from this adminisration.

John Huston - November 28, 2012

It doesn’t take a rocket scientist to know the US & our politicians don’t know the first thing asbout economics and spending. The longer we spend, the worse it will get. Remember the old Chinese proverb, “he who rides the tiger, dismounts at his own peril.”

Eugene kasten - November 29, 2012

I think we should do everything we can to lower our defict, including more jobs because that will give more revenue to the gov. I also think we should be checking the status of our president.

Alllen Burt - December 2, 2012

Definately yes! Reduce both spending and taxes! The President has a mindset which is very different from our founding Fathers’ intentions for the future of this Country. It is going to take more than words cast about to change our course. Congress, Senate & Supreme Court: REPRESENT THE PEOPLE !!!!!

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