Published July 18, 2012
There’s a study out there that says the net worth of Canadians is now higher than that of Americans.
The study is impenetrably absurd, and so are the pundits touting it.
The study from Environics Analytics of Toronto says the average Canadian household had a net worth of $363,202 at the end of last year, versus $319,970 for the average American household. The average Canadian household now looks to be more than $44,000 richer than the average American household, the study says.
Set aside the oversights, including that it appears the study uses U.S. government statistics that leave out Americans’ massive 401(k) accounts as Americans are not required to report these retirement accounts on tax returns. The study attempted to use estimates here, but the disclosures are poor.
Similar, too, is the fact that the study ignores Canada’s microscopic defense spending, which amounts to a fraction of the U.S. military budget. For decades, Canada has relied on the U.S. for its own defense and protection, and instead blows its money on a flawed single-payer health system that is growing more expensive and whose long wait times for exams and doctor or hospital visits has Canadians flying down to the U.S. for health care.
Pundits on the study also ignore the fact that academic data shows health spending is growing at a faster clip in Canada than in America, that heart disease and cancer mortality are worse in Canada, and that lack of MRIs and scanners are worse in Canada, as are the long wait times for care.
And yet a Time magazine blog also has ignored all that, and has instead crooked the trumpets for Canada’s socialist model: “Watch out, Americans: Your thrifty, socialist neighbors to the north have steadily become richer than you.”
But the big problem with such analysis is that even the study’s authors oddly admit they ignored government debt spending, which is turning America weirdly less "capitalist-competitive" and more "me-too socialist." Moreover, America is sliding into the very kind of government central planning that Canada is running away from, and that’s the problem.
“Such debt is higher in the U.S. as a percentage of GDP than it is in Canada,” the study’s authors say.
After Canada lost its triple-A credit rating first in 1992 and then in 1994 from both S&P and Moody’s Investors Services, Canada cut its civil service, froze government wages, balanced its budget and got back its triple-A in 2002.
America lost its S&P triple-A last year, because its socialized housing policies caused the financial crisis and wrecked the U.S. economy.
Fixing income inequality by giving everyone a house was a social science experiment with disastrous consequences.
And the deficit has grown by about $5 trillion since President Barack Obama took office -- equal to the GDP of Germany and South Korea combined -- the attitude being it takes a government village, not entrepreneurs and small business, to fix the U.S. economy.
Never mind what Great Britain’s Winston Churchill said, that “redistributing wealth is like standing in a bucket trying to lift oneself up by the handle.”
Canada escaped the housing bust with big mortgage down payments, unlike the U.S. mortgage policy of “no job, no income, no problem” mortgages. The study’s authors also note Canada rejected mortgage interest deductibility and only “briefly embraced” subprime mortgages.
Meanwhile, Canada has moved to privatize parts of its systems for post office, air traffic control and railways.
Still, one thing has Canada looking more like slow, stodgy big spender Europe. Canada has a value added tax; America doesn’t.