Those who remain convinced that more government spending will produce a robust economic recovery ought to read the Weekly Standard’s Fred Barnes’s “Lessons from Canada” in the most recent issue of National Affairs. In the 1990s Canada’s Liberal party government reduced its national debt and revived its economy by, among other things, reducing federal employment by 45,000 jobs, 14% of the total. The ratio of spending cuts to tax increases was nearly 7-1. Overall Canada’s economy, which grew by less than 1% annually between 1989 and 1993, grew by an average of 3.4% between 1994 and 2006. Something to keep in mind.
