Should Canada discuss the US debt with its neighbour?

Machjo

Hall of Fame Member
Oct 19, 2004
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Considering the exploding US federal debt and its potential consequences for its neighbours, should the Canadian government not be bringint this issue up with its neighbour?

Of course I realise the risk of Canada appearing meddlesome in US internal affairs if it doesn't approach the issue with sensitivity. But I believe that talks behind closed doors (assuming this is not happening already) would be appropriate as a plan A. If that should fail to convince the US to curtail its spending, increase taxes, or take other counter-debt measures, then maybe going to the World Bank to discuss some kind of international agreement for nations to try to bring their national debts to within a percentage of their GDP (the US' is currently about 90% of tis GDP) might be an appropriate plan B. Failing that, then maybe taking up the matter at the UN General Assembly, raising the concern of nations having debt burdens beyond a percentage of their GDP affecting their neighbours too. That might be an appropriate plan C. And failing that, then Canada might need to consider measures to brace for a collapse of the US dollar. This would mean taking steps now to pay off our provincial and federal debts, keep inflation down, and keep interest rates down. The only way I can see this happening would be revenue increases, spending reductions, or a combination fo the two.

But if the US dollar suddenly cracks, we'd better hope that the Canadian economy be prepared to withstand the impact of the shockwave this would send around the world.
 

Machjo

Hall of Fame Member
Oct 19, 2004
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Have US policy-makers ever listened to anybody?

You do have a point. In that case, I think Canada would be wise to brace for impact. We should start paying off the debt now, whether it's by increasing revenue, reducing spending, or both. Seeing that a sudden devaluation of the US dollar could lead to high inflation and bank rate too, it might be wise for us to keep very tight tabs on our own inflation and interest rates now too.

Because if the US dollar starts to take a plundge, we'd better be prepared to brace for the impact.
 

Machjo

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Oct 19, 2004
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Another way to look at it is this:

What's the point of a military alliance without a commensurate economic alliance? What's the point of the US helping us militarily while hurting itself and us economically? Shouldn't any kind of alliance be a comprehensive alliance and not just a piecemeal alliance focussing on only a few narrow threats?
 

Niflmir

A modern nomad
Dec 18, 2006
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We need to call up Fox first. Maybe some other well respected American countries and have a heart to heart intervention.

"USA, you need to cut back on the debt, buddy."

"Yeah, it was all well and the good the first few trillions, but now its like you don't even think about it anymore."

"We're all very worried about you, guy."

Friends say no to friends on debt.
 
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Machjo

Hall of Fame Member
Oct 19, 2004
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We need to call up Fox first. Maybe some other well respected American countries and have a heart to heart intervention.

"USA, you need to cut back on the debt, buddy."

"Yeah, it was all well and the good the first few trillions, but now its like you don't even think about it anymore."

"We're all very worried about you, guy."

Friends say no to friends on debt.

Sounds like a 'Say no to drugs' ad:lol:

but it's not just the USA I'm worried about. Just las drugs hurt not only the user, but his family, frends, community, and nation too, so such a big US debt could hurt not only the USA, but Canada, Mexico, and other countries too.
 

ironsides

Executive Branch Member
Feb 13, 2009
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Actually we have a very strong economic alliance, we have a very economic alliance. Were both just have a little financial bump to get over. As far as N. America is concerned, we are the only two countries that seem to be holding things together. There is only one way to stop this debt. Dump the whole congress and vote in all new members, or at least younger ones. I do not believe that spending so much more money will help anyone of us. I told everyone not to count out Ford. I am making a whole $1.00 per share profit. Yahoo.
 

Machjo

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The US debt is about 19.4% of the US' GDP, and it started growing under Ragan, long before htis 'bump'.
 

Machjo

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Oct 19, 2004
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I don't see what Canada talking to the US coul ddo to get the problem under control.

The real solution for us to work hard to diversify our economics connections around the world.

You my be right there, but then that would involve changes to our education system and to our relations with other countries.
 

ironsides

Executive Branch Member
Feb 13, 2009
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Canada is too entwined with U.S. economics to go it on their own. I just cannot see Canada being able to untwine itself from us.
 

Machjo

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Oct 19, 2004
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Canada is too entwined with U.S. economics to go it on their own. I just cannot see Canada being able to untwine itself from us.

I agree. I'm thinking more not so much in terms of coming out of it unscathed, but rather with at least with the foundation intact so that we can rebuild after recovery. By the way, this would benefit the US too. After all, just as a week economy drags neighbouring countries down, so a strong economy pulls neighbouring countries up. Now of couse I have no illusions that Canada could pull the US economy out of recession on its own (our economy is too minuscule compared to yours), and without a doubt your economy impacts ours 10 times more than yours impacts ours, for good or bad. But regardless of ratio, ours still impacts yours to some degree, and so the best thing Canada could do to help both itself and the US woudl be to strengthen its economic foundation before the storm so when it does hit, the severity of the storm won't be quite as bad as otherwise.
 

Niflmir

A modern nomad
Dec 18, 2006
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For the moment I don't think there is much to worry about. If the EU or China starts becoming to prominent, then we might need to start thinking about undoing what Bush did to our borders and ways to streamline trade. Softwood lumber tariffs, USA protectionism on purchases with stimulation monies, not a good sign for the NA economy.

We are still far too sovereign and hostile towards one another.
 

Machjo

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Oct 19, 2004
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Protectionism hurts both sides in the long run. Any country that engages in it is just kicking itself in the foot.
 

ironsides

Executive Branch Member
Feb 13, 2009
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I agree. I'm thinking more not so much in terms of coming out of it unscathed, but rather with at least with the foundation intact so that we can rebuild after recovery. By the way, this would benefit the US too. After all, just as a week economy drags neighbouring countries down, so a strong economy pulls neighbouring countries up. Now of couse I have no illusions that Canada could pull the US economy out of recession on its own (our economy is too minuscule compared to yours), and without a doubt your economy impacts ours 10 times more than yours impacts ours, for good or bad. But regardless of ratio, ours still impacts yours to some degree, and so the best thing Canada could do to help both itself and the US woudl be to strengthen its economic foundation before the storm so when it does hit, the severity of the storm won't be quite as bad as otherwise.

I wouldn't count the U.S. economy out yet, we have recovered from recessions before. Were all going to come out of this soon, and of course your economy has a impact on ours, this is a world problem. I worry more about China and India collapsing than I do Canada and the U.S. (mainly because of their fast growth)
 

Machjo

Hall of Fame Member
Oct 19, 2004
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I wouldn't count the U.S. economy out yet, we have recovered from recessions before. Were all going to come out of this soon, and of course your economy has a impact on ours, this is a world problem. I worry more about China and India collapsing than I do Canada and the U.S. (mainly because of their fast growth)

Sorry, I wasn't thinking about the recession, but rather the US debt load.
 

ironsides

Executive Branch Member
Feb 13, 2009
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Sorry, I wasn't thinking about the recession, but rather the US debt load.

We will be paying off this debt load for years to come, unless we just declare bankruptcy and start all over again. :lol:
This recession seems to be what started all this, people losing jobs etc. and us printing more and more money to try and solve the problem.
 

Machjo

Hall of Fame Member
Oct 19, 2004
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This recession seems to be what started all this, people losing jobs etc.


Actually, the debt had been shrinking since WWII until Reagan came to power, after which he really started to increae it. Yet even he came across as a fiscal conservative compared to Bush II. It's been growing ever since Reagan except for a short period under Clinton when it had shrunk a little. The US debt problem is something related to but distinct from the current recession.

and us printing more and more money to try and solve the problem.

That could raise the threat of inflation directly, and of debt indirectly, but not necessarily. A government willing to accept inflatin can avoid debt that way in some cases, not that that's any better though.