Chris Edwards, Director, Tax Policy Studies and Editor, www.DownsizingGovernment.org at the Cato Institute has just released a new Cato Policy Report entitled, We Can Cut Government: Canada Did, and has given us permission to post a link to it here.
Here are few poinrts from the report The Bahamas Government might consider, particularly as May, 30, 2012 is Budget day in Parliament:
- Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journal said that growing debt was making Canada an “honorary member of the third world” with the “northern peso” as its currency. But Canada reversed course and cut spending, balanced its budget, and enacted various pro-market reforms. The economy boomed, unemployment plunged, and the formerly weak Canadian dollar soared to reach parity with the U.S. dollar.
- In the first Liberal budget in 1994, Finance Minister Paul Martin provided some modest spending restraint. But in his second budget in 1995, he began serious cutting. In just two years, total noninterest spending fell by 10 percent,…
- The Canadian government cut defense, unemployment insurance, transportation, business subsidies, aid to provincial governments, and many other items. After the first two years of cuts, the government held spending growth to about 2 percent for the next three years. With this restraint, federal spending as a share of GDP plunged from 22 percent in 1995 to 17 percent by 2000. The spending share kept falling during the 2000s to reach 15 percent by 2006, which was the lowest level since the 1940s.
- The spending reforms of the 1990s allowed the Canadian federal government to balance its budget every year between 1998 and 2008. The government’s debt plunged from 68 percent of GDP in 1995 to just 34 percent today.
- As the new millennium dawned, a slimmed-down Canadian government under the Liberals enjoyed large budget surpluses and pursued an array of tax cuts. The Conservatives continued cutting after they assumed power in 2006.
- While Canada has made a great deal of progress, it still has a large welfare state. One problem is the huge government-run health care system. Health care spending is soaring, and wait times for medical procedures are a serious problem.
- However, most policymakers are still resisting the major spending cuts, privatization, and other Canadian-style reforms that we need to avert a fiscal crisis and restore strong economic growth…
Click here… or on the image above to read the entire policy report (pdf).