#4 2/17/09 Canada and Our Bailout Plan

The February 16 Newsweek magazine had an interesting article about Canada's banking system entitled "Worthwhile Canadian Initiative." As Fareed Zakaria, the author this article, put it, “Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada.”

Canada is flourishing in the current economic crisis for a number of reasons. Their banks are leveraged at 18 to 1 where U.S. banks are at 26 to 1. They have a system that works much better than social security and their house prices didn’t drop as badly as in the United States. Also, they have smarter rules about immigration and health care. Canadians don’t mess around when it comes to their economy.

We should take some of Canada’s ideas. They are clearly doing a better job at handling this situation than we are. Why not use their bank system, taxes, health care system, and immigration policies as a model for our own?

Now we have this ridiculous bailout plan that was supposed to jump-start the economy but it probably won’t work and future generations will just end up paying it off. Instead of using the money for silly programs, we should have taken the 700 billion dollars and divided it so that every person in America would get an equal share. There are a little over 300 million people in the United States. 700 billion divided by 300 million is around $2,000 for every man, woman, and child in America. Imagine if every person in your family was given a check for 2,000 dollars. That would get our economy going really quickly because everyone would start buying stuff again and then there would be demand for jobs so people could go back to work.

“So what accounts for the genius of the Canadians? Common sense.” We need some common sense when thinking about our economy and our bailout plan.