Canada offers a blueprint for how the United States can fix itself
The Seattle Times editorial staff launches "Just Fix It," following up on the recent campaign to "reset" the way local, state and federal governments operate in the United States. The status quo won't work in the current environment of dwindling resources and stagnant economic growth.
The economy is not snapping back. Government needs to shrink itself to match the people's ability to pay for it.
State and local governments have done some of this, but the federal government, not much. It has been the bailer-out of everyone else. Now there is a battle that will play out between now and the elections of 2012.
Each political house, the liberal and the conservative, has a piece of the truth.
The 2012 budget borrows nearly 30 cents of every dollar it spends. The liberals blame the wars in Iraq and Afghanistan. Conservatives blame the growth in Medicaid and Medicare.
The liberals are right about the wars. They are a waste.
Conservatives are right about entitlement spending — not that it is a waste, but that it will eat the whole budget unless a principle is found to limit it.
Each offers up for sacrifice the other side's programs.
Meanwhile, millions are out of work. The federal government has borrowed and spent, and cannot keep doing this.
Instead, it can do what Canada's government did. It can fix itself.
In the early 1990s, Canada was faced with huge debt. It cut spending — about $7 of cuts for every dollar of tax increases. Both of its ruling parties, the Liberals and the Conservatives, did this. The cuts did not ruin the job market. 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 recession stronger. Its unemployment rate is almost two points lower than ours. Its dollar, which was worth less than 70 cents a decade ago, has climbed back to par.
America must do the same.
On this page, The Seattle Times offers its introductory thoughts on three debt-related issues: military spending, entitlement spending and tax increases. Other topics, from agricultural subsidies to reform of the Post Office, will come later.
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