"Equally instructive is the counterexample of the preceding administration. Prior to the Chretien regime, the Mulroney-led Conservative Party had led Canada into a protracted period of economic decline due to its inability to shake off the prevailing Keynesian orthodoxy of deficit spending as a means of reducing unemployment. Incidentally, the dramatic spending cuts implemented by Martin were accompanied and followed by a steep decline in the unemployment rate — from a high of 11.4 percent in 1993 to 6 percent in 2007. Having raised Canada's level of debt-to-GDP to an unprecedented high of 67 percent, the Mulroney administration is a typical example of the futility of free-market rhetoric in shaping the course of the economy so long as practice remains bound by the spell of Keynesian doctrine. Together, the two episodes form an addition to the endless wealth of historical instances of economic outcomes occurring in precisely the opposite manner from that predicted by Keynesian theory."
Here's why Canada escaped the financial crisis:
ReplyDeletehttp://direct.mises.org/daily/5583/
From the article:
ReplyDelete"Equally instructive is the counterexample of the preceding administration. Prior to the Chretien regime, the Mulroney-led Conservative Party had led Canada into a protracted period of economic decline due to its inability to shake off the prevailing Keynesian orthodoxy of deficit spending as a means of reducing unemployment. Incidentally, the dramatic spending cuts implemented by Martin were accompanied and followed by a steep decline in the unemployment rate — from a high of 11.4 percent in 1993 to 6 percent in 2007. Having raised Canada's level of debt-to-GDP to an unprecedented high of 67 percent, the Mulroney administration is a typical example of the futility of free-market rhetoric in shaping the course of the economy so long as practice remains bound by the spell of Keynesian doctrine. Together, the two episodes form an addition to the endless wealth of historical instances of economic outcomes occurring in precisely the opposite manner from that predicted by Keynesian theory."