Wintery Knight

…integrating Christian faith and knowledge in the public square

Conservative Party MP Pierre Poilievre explains how Canada escaped the recession

Conservative M.P. Pierre Poilevre (Nepean-Carleton), a member of the majority government in Canada, explains how Canada embraced the free entreprise system that America has rejected, and the results they got.

Here is the speech that went viral on Youtube:

And here is his article in the liberal Huffington Post.

Excerpt:

In a few days the “fiscal cliff” deadline will arrive and potentially bring massive automatic spending cuts and tax increases. Even if Congress and the President agree to avoid the cliff, the next crisis awaits. Treasury Secretary, Timothy Geithner, wrote the Senate this week to report that the “statutory debt limit will be reached on December 31, 2012,” which will require extraordinary measures to prevent a mass default. These measures will give the government 60 days before it runs out of money and Uncle Sam’s head smashes into the so-called “debt ceiling.”

It has long been said that when the U.S. sneezes, Canada catches a cold. So why have these debt-related ailments in the U.S. not afflicted the Canadian government?

The answer is that Canada has been practicing what the U.S. always preached: free markets, low taxes and minimal state interference. And it is working.

For example, Canada avoided the interventionist policies that led the U.S. to the sub-prime crisis.

In an attempt to expand home ownership, administrations from Carter to Bush Jr. forced banks to offer mortgages to people who would otherwise not qualify for them. Washington then ordered government-sponsored enterprises such as Freddie Mac and Fannie Mae to insure these “sub-prime” mortgages.

According to a 2010 Report on the U.S. Financial Crisis by the World Bank’s Development Research Group, Freddie and Fannie bought an estimated 47 per cent of these toxic mortgages. Harvard financial historian Niall Ferguson indicates that the amount of mortgage debt backed by these government-sponsored enterprises grew from $200-million in 1980 to $4-trillion in 2007.(1) The government pumped so much air into the housing bubble that it burst in 2008. The resulting financial crisis led to government bailouts of the banking sector.

Big government caused the economic crisis. So we are told the solution is more big government. Funny how the problem becomes the solution.

Because the Canadian government did not impose sub-prime mortgages on the country’s charter banks, we avoided the crisis and did not bailout a single financial institution. To keep it that way, Canada’s Finance Minister has ended all government-backed insurance of low-down payment and long-amortization mortgages. In other words, if you want to take on risky debt, taxpayers will not insure you.

Governments must lead by example when managing their own debt and spending. Low debt is the result of low spending. Federal government spending as a share of the overall economy is 15 per cent in Canada (2) and 24 per cent in the U.S. (3). The numbers are not merely the result of prodigious U.S. military spending, though that is certainly a factor. Non-military federal government spending is 14 per cent of Canada’s economy (4), and 18 per cent of America’s (5).

Take a look at some of these graphs from earlier in the year about the Canadian 2012 budget. (This is straight from their government’s web site – they have new transparency/anti=corruption measures now, so the citizens know everything that government does). When comparing the deficit and debt of Canada to the United States, always multiply the Canadian number by 10 to get a benchmark to compare. For example, Canadian GDP is 1.7 trillion, and the US GDP is 15 trillion.

Canada’s budget deficit is around 30 billion, but ours is 1.2 trillion:

Canada Federal Budget Deficit / Surplus 2012

Canada Federal Budget Deficit / Surplus 2012

If we were doing as well as Canada, our deficit would be about $300 billion. But we have run up about 6 trillion in debt over 4 years! Not only that, but Canada’s national debt is only $600 billion. If we multiple that by 10, we would expect ours about $6 trillion. And it was that – during the Bush Presidency. But then the Democrats took over the House and Senate in 2007 and everything went wrong and we packed trillions and trillions onto the debt, including about $6 trillion during Obama’s first term.

Canada’s Debt to GDP ratio is 34%:

Canada vs US Debt to GDP

Canada vs US Debt to GDP

But things are even worse for the United States, now. The current United States Debt to GDP is 105%, according to official U.S. government figures. We are due for yet another credit downgrade, and should see Greece-like levels of Debt to GDP during Obama’s second term. We are spending too much, and we aren’t going to be able to make up trillion dollar deficits even if we confiscate every penny that rich people earn. (And they won’t be daft enough to keep working as hard if we did that – they would move, and probably to Canada)

What is happening to us here in the United States is self-inflicted. We are – and have been – voting to impoverish ourselves and generations of children born and unborn, by punishing those who work hard and play by the rules, and rewarding those who don’t work and don’t play by the rules. It didn’t have to be this way. We could have elected a President who actually knew something about business and economics. Knowledge matters. We can’t just choose a President who gives us the “tingles” and then expect him to perform the actual duties of being President. Competence is more important than confidence. Substance is more important than style.

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Conservative government reforms public sector pensions in Canada

Canadian Prime Minister Stephen Harper

Canadian Prime Minister Stephen Harper (evil!)

From the National Post.

Excerpt:

Finance Minister Jim Flaherty says planned changes to the pension plan for members of Parliament won’t take effect until after the next election, noting it would not be fair to change the rules during the current term.

[…]The object, the finance minister says, is for members of parliament and public servants to contribute 50% of the cost of their pensions.

Treasury Board President Tony Clement says changes to the MP pension plan will see them paying almost four times more in contributions.

He says MP contributions will jump to about $39,000 from the present level of about $11,000 and the bill would delay retirement age for a full pension to 65 from the present 55.

The changes, for a while at least, will create a two-tier system — with some existing MPs still being able to collect pension benefits at age 55. After the next election, all new MPs who qualify for the plan will have to wait until they are 65 before getting full pension benefits.

It was also expected that the bill would include cost-saving measures to change the federal employee pension plan so that new workers who join the public service starting in 2013 will see the normal age of their retirement raised to 65 from 60.

Clement says the changes will move public service and MP pension contributions to a 50-50 split, similar to private sector plans.

He says the changes will save taxpayers $2.6-billion over five years.

The bill passed the House of Commons today, and is on its way to the Conservative-controlled Senate. Harper will sign it, and then drink a chalice brim-full with the tears of his pathetic socialist enemies, as is his custom since gaining the majority in 2011.

Also, Conservative Party MP Pierre Poilievre (Nepean-Carleton = evil!) has been pushing the right of workers not to have to join a union, nor to have to pay union dues against their will:

While chieftains at the government’s largest union celebrated a separatist victory in Quebec on Wednesday, a Conservative MP said he will push for legislation to allow workers to opt out of paying dues.

Ottawa MP Pierre Poilievre says by supporting the Parti Quebecois and Quebec Solidaire and other activities, the NDP-friendly Public Service Alliance of Canada (PSAC) is not acting in the interests of the majority of its 172,000 members.

Poilievre’s riding is home to thousands of government workers – some of whom have expressed their disbelief to him over the use of dues to fund political and militant activity, including supporting student protesters in Montreal.

He says he will advocate for passage of a private member’s bill in Parliament that would force unions to open their books to learn how dues are spent.

And while he is a parliamentary secretary and can’t introduce private bills, he will encourage and help others draft legislation that would allow union members the choice of paying dues.

“It stands to reason that the law should not force workers against their will to pay union dues to radical causes of PSAC union bosses,” he said.

“Workers should have the right to know how their union dues are spent and if they don’t like what they see, the freedom to opt out of paying them.”

Previously, the evil Harper banned per-vote subsidies for political parties:

The Conservatives’ budget bill tabled Tuesday will end taxpayer-funded subsidies for federal political parties, a proposal that helped spark the 2008 coalition crisis but was promised again by the Tories in the spring election campaign.

[…]The 2011 Tory election platform cited $27.4 million as the cost to the taxpayer last year of the current $2 per vote subsidy.

[…]The other parties generally, but the Bloc Québécois in particular, do not match the Conservatives’ ability to fundraise from grassroots party members. An end to the party subsidies puts parties that are not effective at grassroots fundraising at a major financial disadvantage.

Returns filed with Elections Canada for 2010 show the Conservative party raising $17.4 million from some 95,000 donors. Other parties were far behind: the Liberals raised approximately $6.4 million from over 32,000 donors, while the NDP raised $4.3 million from just under 23,000 donors. The Bloc Québécois, then the third-largest party in the House of Commons, raised only $640,000 on its own from fewer than 6,000 donors.

And the evil Harper planned to banning loans to political parties from unions:

The Harper government’s plan to ban corporate and union loans to political parties will further tighten a revenue-raising vise on the opposition parties. The Liberal Party will be especially squeezed, as it prepares for a leadership race in 2013.

The goal of the legislation, which was introduced into the House Wednesday by Democratic Reform Minister Tim Uppal, is “to reduce the potential for undue influence of wealthy interests in the political process,” according a government release.

But the effect could be to further widen the gap between the Tories’ revenue-raising efforts and those of other parties, who badly trail in total campaign contributions from individual donors.

[…]Individuals will still be allowed to lend money, but their combined loans and donations will not be allowed to exceed the $1,100 annual contribution limit.

Banks and other accredited financial institutions will be able to lend money to parties and candidates, and political parties can lend money to constituency associations or candidates. But the terms must be publicly disclosed, including the amount, interest rate and the names of the lenders and guarantors, allowing other parties and the media to know who is in hock to whom and for how much.

Political contributions from unions are already banned.

We don’t see that level of aggression down here, do we? Canada even requires photo ID for voting, so there is no voter fraud. And they are reforming their immigration and welfare programs to eliminate fraud there, too. Unreal. It’s like they actually think that being conservative means… being conservative. Instead of kow-towing to the leftist media at cocktail parties.

It seems like Canada is embracing the free enterprise system at a time when we are turning our backs on it. And they’ve been reaping the benefits: smaller deficits, less spending and lower unemployment. We will get our chance in November to try and catch up to their financial success if we can kick our socialist President out.

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