Just about the time the Congressional “Super Committee” declared failure, our national debt clock rolled past $15 trillion. Even as the discussions, co-chaired by Sen. Patty Murray, D-Wash., ground to a halt and Congress left the Capitol for Thanksgiving, the debt clock kept ticking.
That means each taxpayer’s portion of our debt is now $133,687.
Where will this all stop? Are we headed for another partisan meltdown over raising our debt ceiling? Will we see another downgrading of our nation’s credit rating?
It is no wonder investors are keeping their money in their pockets. Credit analysts are beginning to question our nation’s ability to repay what we have borrowed, and the financial markets are rising and plunging like the cars on a rollercoaster.
It is time to look north and take some valuable lessons from our Canadian friends.
In September, The Seattle Times published a series of editorials suggesting that Americans do just that.
The editorial writers suggested that we fix ourselves, just as the Canadians did in the early 1990s. Liberals and Conservatives north of our border cut $7 for every dollar of tax increase. The cuts did not ruin the job market, and Canada’s debt has fallen from 67 percent of gross domestic product to 29 percent — less than half the U.S. figure today.
With less debt, Canada came through the recent deep recession stronger. Its unemployment rate in the last three years averaged 7.6 percent while ours hovered between 9 and 10 percent and flirted with 11 percent. Its dollar, which was worth less than 70 cents U.S. a decade ago, has climbed back to par.
While there are some discernible differences between our two countries, the underlying fact is Canada tackled its spending and revenue problems head on, while we bicker endlessly. Our inability to act forces us to borrow more from thriving foreign countries such as China, which now owns $4.6 trillion of the U.S. government debt.
Canadians took some novel approaches which American politicians shun. For example, to bring down costs, Canada contracts its highway maintenance and air traffic control system to the private, taxpaying sector. Contracting out public sector jobs is taboo in U.S. union halls.
While we fight over the siting of wind farms and new ways to develop our oil and gas reserves, the Canadians have become an energy superpower. Canada is now America’s largest foreign supplier of all kinds of energy from natural gas and crude oil to electricity.
The point is Canada has found ways to develop its resources in a productive and environmentally responsible way — something we in Washington state strive to emulate.
Canada remains Washington state’s largest non-aerospace export market and is second overall behind China. Canadians make more than two million visits to Washington, spending $454 million. They buy Boeing’s 787 commercial aircraft, and the Royal Canadian Air Force flies Boeing’s C-17 transports.
We are neighbors and friends. Like all friendships, there are valuable lessons we can learn from one another. In financial matters, we ought to look north.
Don Brunell is the president of the Association of Washington Business.