For the First Time, Canadians Now Richer Than Americans
Back in June, we posted a piece Canada got themselves out of trouble. So can we, which begins thusly:
Yesterday, I had the edifying pleasure of reading a piece from the Cato Institute that discusses the similarities between the economies of Canada and the United States, the paths we have taken, and the way to a better future being shown by Canada (PDF).
The introductory paragraphs set the stage.
Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journal said that growing debt was making Canada an “honorary member of the third world” with the “northern peso” as its currency. But Canada reversed course and cut spending, balanced its budget, and enacted various pro-market reforms. The economy boomed, unemployment plunged, and the formerly weak Canadian dollar soared to reach parity with the U.S. dollar.
In some ways the United States is in even worse fiscal shape today than Canada was two decades ago. For one thing baby boomers are now retiring in droves, which is pushing the federal government deeper into debt every year. America risks becoming a “first world” country like those in Europe, where huge deficit spending is wrecking economies and ruining opportunities for young people.
America needs to get its fiscal house in order, and Canada has shown how to do it. Our northern neighbor still has a large welfare state, but there is a lot we can learn from its efforts to restrain the government and adopt market-oriented reforms to spur strong economic growth.
Well, Canada’s embrace of free-market principles, coupled with America’s Obama-driven slouch away from them, have had a predictable result:
While Americans might enjoy throwing politically-charged barbs at their neighbors to the north, Canadians now have at least one reason to be smug.
For the first time in recent history, the average Canadian is richer than the average American, according to a report cited in Toronto’s Globe and Mail.
And not just by a little. Currently, the average Canadian household is more than $40,000 richer than the average American household. The net worth of the average Canadian household in 2011 was $363,202, compared to around $320,000 for Americans . . . keep reading
We are reaping what we have sown. Time and time again, rigorous quantitative surveys have shown that economic freedom leads to prosperity, and lack of economic freedom leads to lack of prosperity. This result was guaranteed to happen. As Obama and the Democrats make our economy (and thus, all of us) less free, we are certain to become less prosperous.