A Canadian Writer to His American Readers
The recent election of a conservative prime minister in Canada would not significantly offset the possible re-election of a radical socialist president in the U.S. There is, of course, the question of renegotiating NAFTA that arises every now and then and the threat of other isolationist developments that would hit the Canadian economy hard, cost jobs, and disrupt the intricate dimension of interlocking fiscal structures. But the damage can go deeper than this. The consequences of rampant inflation in the U.S., a possible debt default, and the ensuing social and political unrest would not only constitute a heavy blow to our export industries, drastically reduce our “market share,” and potentially deprive us of our largest trading partner, but conceivably lead us into another Great Depression.
Canadian Finance Minister Jim Flaherty warned American legislators that failure to deal with their deficit problem could set back the global economic recovery. “We think it’s important for the world,” he said, “and for Canada, that there be a plan in place.” Raising the debt ceiling, as it should go without saying, hardly qualifies as a “plan.” Neither does “quantitative easing,” a surefire way of turning dollars into Monopoly money. Investing in the Ecozoic sinkhole will deplete any remaining fiscal reserves. Pumping steroids into the economy in the form of “stimulus spending” turns out to be a placebo with no demonstrable results, apart from the fact that such expedients are ultimately counter-productive.
All these matters are serious enough, but the pressing issue has an apocalyptic side to it. No more than Americans, Canadians cannot afford to revel in isolationist fantasies, assuming that if we keep our economic house intact, pay down the debt, refuse to raise taxes, and shrink our exorbitant entitlement programs, all will be well. For as America goes, so do we. If it goes ill with America, it will infallibly go ill with us. We know what happens when a great ship sinks. It creates an immense vortex and whatever happens to be in the immediate vicinity is swallowed up along with it. Compared to the U.S., Canada is a very little ship indeed, more like a kayak floating beside the grandest liner in the world. It wouldn’t stand a chance.