US should follow Canada's fiscal policies. Dr Paul would approve.Submitted by Jason Sarnia on Fri, 03/30/2012 - 04:20
Canada's latest version of austerity, however, pales in comparison with that in the United Kingdom, and Finance Minister Jim Flaherty said the long-term plan would give the "AAA"-rated country an even bigger advantage over other major economies.
"We're realizing that quite frankly, some of our Western traditional economic allies and other allies will not have economies of great strength in all likelihood in the next while, and we want to be in the next league," Flaherty told reporters ahead of his budget speech.
"We want to be with the emerging economies, we want to be with the economies of South America that are growing, and we're in a position in this country to get there."
The debt-to-GDP ratio is set to decline to 28.5 percent by 2016-17, roughly in line with pre-recession levels, from 33.9 percent this year.
"They could spend less to bring the zero deficit a year earlier, but they didn't go that route," said Sebastian Lavoie, assistant chief economist at Laurentian Bank. "They wanted to buy some time, stay the course for maybe another year until we move closer to an election year. Some market participants will like their prudence."
The move will kill 19,200 public service jobs over three years, or about 5 percent of total federal employment. Of those, about 7,000 will occur through attrition, the government said.