Socialist Sweeden and Canada still AAA

I'm sorry, but given the arguably CRIMINAL dropping-of-the-ball by Standard and Poor's in not sounding the alarm on the impending financial disaster, S & P passing judgement on U.S. credit is like Casey Anthony calling someone a bad mother.

I just want to point out that Canada ranks ahead of the United States on the Heritage Foundation's Index of Economic Freedom:

http://www.heritage.org/index/

So, if anything, the U.S. is MORE socialist than Canada, and an apparent premise behind your argument fails.

Interestingly, of the nine countries on 247Wall's list of secure AAA countries, five are more economically free than the U.S. and all are in the top 30 in the world. I am not an anarcho-capitalist and won't argue for completely free markets, but on the spectrum of possible outcomes it does seem that less regulated markets perform better than more regulated markets.

Nyc re. Buy now or be priced out forever.

p87,
what "seems" to you is horseshit to me

Whatever you say, Wbottom. I have cited facts, and you have dismissed with name-calling.

With all due respect, are you really claiming opinions of the Heritage Foundation to be facts?

On this particular point, what reason do you have to doubt them? They are advocates of economic freedom, so they have every incentive to establish and maintain a consistent definition of economic freedom. Do you have some better measure of what countries are more or less economically free than others? Anyway, their criteria are explained in detail on the site - do you have some reason to disagree with how they score and weight the various legal, regulatory and tax characteristics of various countries?

Yes. Let's start at the very beginning: http://en.wikipedia.org/wiki/Economic_freedom

Or as Inigo Montoya might say: " You keep using that word. I do not think it means what you think it means."

Point me to a better measure, then, and we'll see if the data don't still line up.

How about I make up my own definition of it -- one created solely to support my own political worldview? Would that work for you?

As long as you are consistent in the application of your definition, and provide actual factual research to apply your criteria, I'd love to see your ranking. "Economic freedom" (like this whole debate topic) is a politically loaded term, and it's impossible to have a definition that does not reflect your political beliefs. In fact the implicit argument of Socialist's original post is that greater government intervention (and as a result less economic freedom) must be a good thing because it could have prevented a downgrade. How is that whole argument not political? And how does one respond to it without having some politically charged definition of what constitutes "economic freedom" (and its implicit opposite, "socialism")?

Anyway, there is an alternative to the Heritage Foundation's ranking, created by a Canadian think tank called the Fraser Institute. Not sure whether they are more or less laissez-faire than the U.S. Here is their ranking of the U.S. and the 9 "safe" AAA countries, as of 2008:

Singapore: 2
Switzerland: 4
U.S.: 6
Canada: 7
Denmark: 14
Germany: 24
Norway: 31
Sweden: 37

http://www.freetheworld.com/cgi-bin/freetheworld/getinfo.cgi

So, not precisely the same outcome as the Heritage guys, but pretty close, and showing all 9 safe AAA countries in the world's top 37 rather than top 30. Also, the Heritage Foundation's analysis is more up-to-date, and takes into account government reactions to the global economic crisis, which obviously are not going to be reflected in Fraser's 2008 rankings.

Whoops - forgot Australia (8) and the Netherlands (21) from the Fraser ranking. I don't think it changes my above point.

I look forward to the "Malthusian" definition of economic freedom, and particularly where you think it differs from the definitions put forward by the Heritage and Fraser guys, and most particularly why you think your definition would cause the U.S. to move up the economic freedom rankings (since that is what it would have to do to support Socialist's original argument).

I never made any comment about Socialist's original points (they are usually pretty silly and way off topic). My point is that the only people who would even contrive to generate some ranking of "economic freedom" are those that have some agenda to advance (like Heritage or Fraser) that relies upon advancing a definition of freedom they already advocate. If that sounds circular, it is because it is circular. You can line up as many libertarian think tanks as you like that generate similar studies and that and $4 will get you a bowl of soup. Except in Switzerland, where the soup is damn expensive, making the poor there not terribly economically free.

Well he started this topic so it's very hard for his original post to be off of it. :)

I only brought up the Heritage index to challenge Socialist's original assertion that Canada is "socialist", or at least more "socialistic" than the U.S. For that limited purpose the Heritage index is totally relevant, since economic policies closer to those preferred by Socialist are probably more towards the socialist end of the spectrum, and economic policies closer to those preferred by the Heritage Foundation are probably more towards the capitalist end of the spectrum. If Socialist knew how much the Heritage guys like current Canadian economic policy, he would probably never have cited Canada as such a positive example of his viewpoint.

Sorry. I meant the real estate topic.

In terms of government as a % of GDP, the standard measure of Socialism, TOP is entirely correct. Economic Freedom or lack of it is NOT the same.

" If Socialist knew how much the Heritage guys like current Canadian economic policy,..."

Heritage supports single payer health insurance? Really? And they support tough regulations on banks?

p87, your version of economic freedom is that unregulated corporate-dominated system that is currently killing our middle class--i dont think it feel feels so free to many americans

props to canada for their very effective enforcement of banking regulations such that their money center banks are solvent--and for the excellent health care that is provided to all canadians

great facts!! heritage foundation!! hahahaha

"Heritage supports single payer health insurance?"

If you read their report on Canada they do indeed deduct points for high government spending, which would include the national health plan. However Canada makes up for it by being less regulated in other areas.

"And they support tough regulations on banks?"

Canadian regulations are not tougher on banks than the U.S. They avoid the arcane micromanaging characteristic of U.S. banking regulation and focus on consumer protection. On balance, that amounts to less onerous regulation.

Canada has a higher percent of government as GDP. ergo it is more socialist.

Canada was downgraded to AA+ in 1992; upgraded back to AAA in 2002.

Factbox: How Canada tamed its budget deficit (Reuters)
http://news.yahoo.com/factbox-canada-tamed-budget-deficit-222340162.html

Those who do not know history are condemned to repeat it.

Isle of Man has a AAA as well.
It has no capital gains tax, wealth tax, stamp duty, or inheritance tax and a top rate of income tax of 20%.
We'll ignore the population is only 80k and GDP of over 4 billion. So what's the point of this thread?

canadian banking regulations require better capitalzation and mtm of financial instruments--kinda macro stuff--and the fund govt entities to enforce--and their banks are in vastly better shape than ours

glad to hear you and the heritage folk (tea party) are supporters of consumer protection in banking--that must explain the trashing of elizabeth warren and her agenda

Jason: You are right that Canadian government spending is higher than the U.S. as a percentage of GDP (39.7% versus 38.9%). This is an important factor, but not the only factor, in determining the size, scope, power and cost of government. It is important also to consider other factors, especially where the percentages are so close together (less than one percentage point difference between the U.S. and Canada).

Wbottom: I wasn't aware that the Heritage folks were connected to the Tea Party. They have been active since the 1980s whereas the Tea Party movements first started around 2009.

Anyway, I am not taking a position on exactly what kinds of bank activities should be regulated and how. But what is clear is that, on balance, Canadian banks have been less regulated than U.S. banks, at least since Canada's 2007 reforms.

" I wasn't aware that the Heritage folks were connected to the Tea Party." In fact they are. Just take a look at who is funding each of them. You will see the same names. Of course, many of them would prefer you remain unaware of that. That is why they create front organizations in the first place.

candian banks less regulated?? than our money center banks?? whose "fact" is this now??

you are simply wrong on this

Post87deflation - you are being purposely stupid. The debt to GDP ratio for the US is out of whack because we are in an ecnomic funk and Canada is not. NORMALLY the difference is about 500 basis points wider. Those of us who took basis arithmetic understand the numerator AND denomonator each have an impact.

Furthermore, with the end of the Obama stimulas, the projected figure will be much lower for the US in FY2012 even WITH a weaker economy than Canada's.

Also, OTHER names on the heritage list higher than us, or at about the same level, have much higher government to GDP ratios. Denmark is one below us, and Australia and New Zealand are above us.

The heritage foundation and WSJ publish this list - and CLEARLY have a political axe to grind on top of all this. They assume as self-evident that government spending and taxes are bad. A tax credit for an ecnomic activity is good based on this methodology, while a tax and equally offsetting government subsidy for the exact same activity is bad.

The CANADIAN "Economic Freedom of he World" 2010 rankings has the US #6 ahead of Canada, BTW.

Democrats attach the Tea Party as a political tactic to turn America against the Republicans. They know attacking republicans directly would not be as successful. 40 years of Keynesian spending created this mess. More spending will not solve it.

When George W. Bush took up residence in the White House in January 2001, total U.S. debt stood at $5.95 trillion. Last week it was $14.3 trillion, with $2.4 trillion freshly authorized by Congress Tuesday.

Ten years and $8.35 trillion later, what do we have to show for this decade of deficit spending? A glut of unoccupied homes, unemployment exceeding 9 percent, a stalled economy and a huge mountain of debt. Real gross domestic product growth averaged 1.6 percent from the first quarter of 2001 through the second quarter of 2011.

It doesn’t sound like a very good trade-off. And now Keynesians are whining about discretionary spending cuts of $21 billion next year? That’s one-half of one percent. And it qualifies as a “cut” only in the fanciful world of government accounting.

http://www.bloomberg.com/news/2011-08-05/decade-of-fiscal-stimulus-yields-nothing-but-debt-caroline-baum.html

Blah blah. TOP was that socialist countries are AAA rated by one of the agencies and we are not. This is true. Dummy keeps trying to convince us that Canada is not more socialist.

But he ignores TOPs mention of Sweden. Or for that matter AAA-rated (by all three agencies) Australia, Austria, Denmark, Finalnd, France, Germany, Luxembourg, the Netherlands, Norway, or the UK. All of which are unambiguously more "socialist" than the US. So TOP is correct. The rest is all noise.

Enough with the Canadians. Canada is a natural resource based economy, same as Australia and that is the reason it has recently done well.

"Enough with the Canadians. Canada is a natural resource based economy, same as Australia and that is the reason it has recently done well."

Then we should be doing well, if not better. In case yo haven't noticed, we have natural resources: coal, natural gas, oil, shale oil, etc. Counting shale oil, the U.S. has 3 times more oil than Suadi Arabia. Yet, our policy is to completely ignore shale oil and instead go after the few drops of oil we have offshore.

"40 years of Keynesian spending created this mess."

Ronald Reagan was a Keynesian? You just said so.

"They assume as self-evident that government spending and taxes are bad."

I don't know if this is correct. I think what they assume is that government spending and taxes are factors in determining whether a society is economically free or not. Yes, clearly the Heritage and WSJ guys consider "economic freedom" a good thing, or otherwise they would use a more neutral term like "capitalism". But it's hard for me to see why we shouldn't take them at their word when they say that, overall, they prefer one country's policies over another's.

I agree that the Heritage guys have something of a political axe to grind, since they gave GWB higher marks than Clinton in spite of GWB's support for frivolous antidumping claims agsinst foreign steel producers, massive increases in discretionary spending, and Medicare Part D. I personally look at GWB as a borrow-and-spend big government guy, and Clinton as a moderate more open to the occasional libertarian idea, so only Heritage's partisan bias can explain giving GWB better marks than Clinton. But still I think it is meaningful that they would rank Canada ahead of the U.S. If anything, I think they went too easy on GWB, not that they have been to harsh on Clinton or Obama.

They really have no reason to be other than honest about their opinion on Canada, since Canada has zero votes in the Electoral College.

"Post87deflation - you are being purposely stupid. The debt to GDP ratio for the US is out of whack because we are in an ecnomic funk and Canada is not."

Am I? Maybe I think our GDP numbers of 2000~2007 were inflated by cheap Fed money and the housing bubble. Maybe I think that the current ratio of the U.S. economy's size versus Canada's is more reflective of long-term economic fundamentals. Maybe our economic funk reflects the new normal, and the new baseline for any future growth, if any. Why do you assume otherwise?

Note I have not insulted anyone else on this thread and don't appreciate your choice to veer into nastiness like that. What does "purposely stupid" mean anyway? It's a contradiction in terms. Perhaps the word you're looking for is "disingenuous", but I assure you I am not.

"Also, OTHER names on the heritage list higher than us, or at about the same level, have much higher government to GDP ratios. Denmark is one below us, and Australia and New Zealand are above us."

Actually it's a mixed bag. Australian government spending is only 34.3% of GDP, substantially lower than the U.S.'s 38.9% - that is a difference too big to be explained by cyclical factors (even if I were to concede your assertion that Canada is only so close because of cyclical factors, which I don't). Even more so Singapore, Hong Kong and Switzerland.

Spending is a factor, and you can see how they account for it. I don't accept your unsupported assertion that spending as a percentage of GDP is the sole and essential factor in determining where a country lies on the Capitalist-Socialist spectrum.

"Ronald Reagan was a Keynesian? You just said so."

I vote Keynesian! He increased defense spending not just for foreign policy purposes but also for the short-term boost in economic headline numbers. And contrary to Republican claims Reagan never succeeded (in my view never really tried) in reducing the growth of entitlement and discretionary spending, and he let the 1979 Chrysler bail-out stand. Also, most good ideas associated with Reagan that paid off in long-term benefits to the economy (such as reducing the regulatory burden on the transportation and telecommunications industries, leading to the rapid growth of the internet, cell phones, and discount airlines) were actually started under Carter. Reagan liked to borrow libertarian rhetoric, but his administration was too much in thrall to K Street to actually put such rhetoric into practice.

It was actually Carter who deregulated the airlines:

http://en.wikipedia.org/wiki/Airline_Deregulation_Act

Agreed! That is what I was trying to get at when I said some libertarian-friendly policies that for whatever reason are associated with Reagan were actually started under Carter.

I think a lot of self-styled libertarians give Reagan way too much credit. He got the ideas out there in his speeches, but did not really put them into practice.

A classic: http://www.theonion.com/articles/embarrassed-republicans-admit-theyve-been-thinking,19248/

people associate reagan with the airlines because he fired the air traffic controllers

It is kind of funny that Reagan fired the air traffic controllers and gets an airport named after him

i always thought that was really odd, too. perhaps the final victorious insult?

"some libertarian-friendly policies that for whatever reason are associated with Reagan were actually started under Carter."

Maybe those libertarian friendly policies are why Carter was such a disaster as president.

"Maybe those libertarian friendly policies are why Carter was such a disaster as president."

Perhaps, but they had long-term payoffs for the good of the country as a whole. Swallowing the bitter pill is frequently unpopular, and there were lots of entrenched industry incumbents that were clearly hurt by '70s deregulation (PanAm, TWA, IBM, AT&T, etc.), but in my opinion we consumers, now 40 years later, are better off having the internet, cell phones, and discount airlines, all of which would have taken much longer to develop (if ever) if we were still stuck with an early '70s regulatory framework.

More likely Carter's problems had little to do with policy and a lot to do with the fact that he didn't understand that the President's primary job is to make people feel good about America - a job which he didn't even try to do.

The real benefits of airline "deregulation" are debatable and the best thing about the US system -- its superb safety record -- is precisely because of tight regulation by the FAA. However, trying to give deregulation of the telephone industry credit for cell phones and the Internet is both simplistic and wrong. If anything, we have the military and NASA to thank.

Many people consider the beginnings of teh financial crisis less a function of Presidents but the economic advisors to the Presidents. The hegomony of our Economic policy has been Robert Rubin and his accolytes Summers & Geithner. And now that Summers has abandoned ship we're left with Geithner who won't do what's necessary to fix things without Robert Rubin's permission.

ME: I wholeheartedly agree that safety regulation is good and necessary. I think the case against the price controls and explicit barriers to entry that characterized airline regulations through the early '70s is much stronger than you are letting on.

As for telecom, the core technologies were invented for the military and NASA as you suggest. However deploying those technologies for the benefit of consumers would have taken much, much longer if we were still living under "Ma Bell".

"...However deploying those technologies for the benefit of consumers would have taken much, much longer if we were still living under "Ma Bell"...."

That was government interfering in a private business's affairs, NOT de-regulation. It was exactly the opposite of de-regulation, in fact. The exact speccifications of the AT&T breakup were prescribed in excruciating detail by the government.

Well there are a couple of responses to this:

1) Until the early '70s AT&T operated as a government-sponsored monopoly. Even a heavily regulated set of spin-off companies constitutes less government intervention in the industry than having a government-sponsored monopoly. Also, those restrictions were primarily aimed at preventing the Baby Bells from collaberating with each other - i.e., forcing them to compete like normal private companies, not micromanaging how their businesses were to be conducted.

2) Most of the restrictions on the Baby Bells were lifted within a decade after the break-up.

So call it a multi-stage reduction in the regulatory burden if you like but clearly there was a reduction in the regulatory burden. If you compare telecommunications in 1970 versus telecommunications in 1990 there is just no denying it.

I can and do deny it. "Competitition" was allowed against AT&T for a long while before the government forced AT&T, against its will, to break up. You had a heavily regulated monoploy replaced by a heavily regulated oligopoly.

BTW, I don't deny that the Heritage and other such economic freedom lists are not good proxies for socialism. However, government as a percent of GDP is the more generally used definition. And if you asked just about ANY member of he Tea Party or any Fox News pundit if they wanted half the things Canadians get from their government and 3/4 of what Danes get, they would scream it was socialism. Not to mention the tax rates. Yet they are and have been in the top ten of your list for ten years running.

There is a double negative above I did not intend...

"Mitt Romney gets another Pants on Fire for saying we're 'inches away' from not being capitalist any more...

...On the suggestion of several economists, we took the figures for government expenditures (which includes all levels of government) and divided them by the national gross domestic product for the years 1996 through 2010. For more than a decade, government spending as a percentage of GDP was quite stable, bouncing between 30.4 percent and 32.9 percent.

For the last few years, that percentage has indeed gone up -- to roughly 38 percent in both 2009 and 2010, which is within striking distance of the 40 percent Romney cited.

Bruce Bartlett, a former official in the administrations of Ronald Reagan and George H.W. Bush, said that Romney is "implying that the temporary increase in spending from (Obama’s stimulus bill) and the consequences of the recession are permanent," Bartlett said. Other economists noted that government’s footprint in GDP started growing in 2008 -- under Bush, not Obama -- because that’s when the recession began to hit...."

http://www.politifact.com/truth-o-meter/statements/2011/aug/12/mitt-romney/mitt-romney-gets-another-pants-fire-saying-were-in/

And the Heritage chart points out that the US is below Denmark in the 2011 ranking. #9 versus #8. The most right wing members of Parliment or even the Royal Family in Denmark are on virtually every issue to the LEFT of Nancy Pelosi or even Bernie Saunders. The Tea Party or Fox would call them completely socialist after 10 ten minutes of discussing politics.

I'll take your word for it about Denmark. I would point out that the Heritage chart takes into account a lot of issues (such as number of days it takes and number of applications you have to file to form a business) that ought to be important to any principled libertarian but are not really on the radar screen of the Tea Party types, as far as I can tell. (I don't really follow those guys. I appreciate their desire to put some limits on entitlement spending but I have been turned off by their position on immigration from the beginning.) So I'm more likely to be persuaded by Heritage's views rather than the average Tea Party participant's views on where countries fall on the capitalist-socialist spectrum.

As for the point above on the Bell system divestiture, perhaps you know better than I, but I always understood that at least in the area of price controls telecom regulations were indeed relaxed upon divestiture. After the divestiture, price controls focused on what the Baby Bells and AT&T can charge each other, which is a narrower and less onerous category than the consumer price controls that had applied to Ma Bell (frequently at the local level as a sort of quid pro quo for prohibiting the establishment of competing systems). Since price controls are among the most heavy-handed forms of regulation, and result in the most devastating economic distortions, I think any relaxation of price controls is going to look like deregulation to me, even if accompanied by a battery of new rules as to who can and can't merge with whom.

That's pretty funny that Polifact also cited Heritage's rankings in debunking Romney's claim. Maybe they have been following this thread!

And now we can amicably end.

Heritage said the Bush tax cuts would create 6 million jobs. I'm still waiting.

Heritage also said that Paul Ran's budget would result in the completely unrealistic unemployment rate of 2.8%. When called out on it, they scrubbed it from their website.

>Paul Ran's budget

Who?

Rand Paul?
Ron Paul?
Paul Ryan?

Thanks, Jason! I agree.

Socialist: I agree the 6 million claim and the 2.8% claim were both absurd (though in fairness IIRC the 2.8% projection came from Ryan himself, not Heritage's own analysis - nuts to Heritage though for repeating it). I wasn't citing Heritage as an example of "people who are right". I was citing them as an example of "people who have a good grasp of where countries fall on the socialist-capitalist spectrum".

the only grasp the heritage people have in that agenda the koch's etc want researched and supported, so tea party can drone on for them

hey jason, here's some recent work by the koch bros--agenda items like, end "forced bussing) a rvivend george wallace soundbite--resegregate!!

http://motherjones.com/mojo/2011/08/koch-brothers-school-segregation-americans-prosperity

go mitt: "corporations are people too" -- cant make this stuff up

No, the 2.8% DEFINITELY came from Heritage, not the other way around. They later redacted it from the analysis, but plenty of sources saved the original version of the PDF.

http://www.nydailynews.com/news/world/video-college-chant-promotes-rape-underage-sex-partners-article-1.1447881
http://www.usatoday.com/story/theoval/2013/09/04/obama-thanks-sweden-for-blackhawks-hockey/2763733/