For the first time in recent history the net worth of Canadians is higher than that of their American neighbours. According to Environics Analytics WealthScapes the networth of Canadian households is $363,202, while American households come in almost $50,000 less at $319,970.
Much of this switch can be accredited to political gridlock in the U.S., which pits socialism against capitalism, while Canada taunted by many on the right as socialist along with European nations, has been able to merge social programs with capitalism. Canada has found a balance between socialism and capitalism, complimenting each other.
Strong banking regulations, enforced by successive liberal and conservative governments, have avoided a bank meltdown, which was seen in the U.S. and most European countries.
While all of Canada's success cannot be attributed to good government, bank regulations, a strong resource sector has contributed to a declining unemployment rate (7.2% in Canada, while the U.S. is stagnant at 8.2%).
While Canada has a strong safety net, with universal health care, Canada Pension Plan (equal to Social Security) and an Old Age Security benefit for seniors, it has also kept tax rates, especially Capital Gains tax, low. It can also be assumed that there are less tax loop holes.
Meanwhile in the U.S. the debate rages on about the rich paying their fair share, with a gridlocked Congress, which can't even provide some kind of certainty for small business owners. Congress is expected to take its summer recess next month with looming important business still on the agenda. Since this is political mad season, no one wants to address these issues in an election year.
The President and the Democratic Senate want the Bush tax cuts to expire at the end of the year for those making over 250,000, while the Republican House wants all the tax cuts extended. Add to that the issue of across the board cuts to defence spending $500,000 and you can see another congressional crisis emerging.
In contrast the Canadian government has provided business owners with certainty and has made significant accross he board cuts to the public service. While the US keep piling onto its debt, the Canadian government has actively pursued an effort to cut its deficity and is looking at a balanced budget bye 2014.
Of course the measures implemented by the Canadian government have not gone without criticism and the Harper government has come under fire by the oppposition. The facts and results speak for themselves. The government has calculated that a little pain now will pay off in the future.
"Policy has played a significant part as well, though. Both liberals and conservatives in the U.S. have tried to use the Canadian example to promote their arguments. The left says Canada shows the rewards of financial regulation and socialism, while the right likes to vaunt the brutal cuts made to Canadian social programs in the 1990s, which set the stage for economic recovery.
The truth is that both sides are right. Since the 1990s, Canada has pursued a hard-headed (even ruthless), fiscally conservative form of socialism. Its originator was Source: The Record.com, who was finance minister for most of the ’90s, and served a stint as prime minister from 2003 to 2006. Alone among finance ministers in the Group of Eight nations, he “resisted the siren call of deregulation,” in his words, and insisted that the banks tighten their loan-loss and reserve requirements. He also made a courageous decision not to allow Canadian banks to merge, even though their chief executives claimed they would never be globally competitive unless they did. The stability of Canadian banks and the concomitant stability in the housing market provide the clearest explanation for why Canadians are richer than Americans today."
Whether or not the two party system is a hinderance for America to move forward is a good question. What seems to clear though is that both Democracts and Republicans are big tent parties, where the far left and far right seem to control the agenda.
When one reads some of the radical stories that often appear on the front page of allvoices, it becomes clear that there is no give and take by either side, both professing to be right.
Without compromise there can be no forward movement. Gridlock is divisive and destructive. The sooner Americans realize that the problem can't be solved by ideology but a compromise that includes both social programs and capitalism working in harmony, the sooner they will solve their economic woes.