Tuesday, November 4, 2008

The US Election

I am really amazed at how much people are paying attention to this election in the US.

For people in Canada the only thing that matters is if the new government in the US will continue to be protectionist, become more protectionist or the Americans will finally figure out free trade is a good thing.

As time goes by I have more faith that Barak Obama will not be the disaster that I thought he might be, but I remain very afraid the Democratic congress will take it out on the main US trading partner - Canada. Obama is not going to be able to restrain the anti-Canadian forces in the US house and Senate if there is a large Democrat majority. His government will be seek Canadian concessions on trade right away and concessions means less free trade and more benefit to the businesses in the US the government has picked as winners.

The US needs a president that it is socially liberal, economically liberal, and fiscally conservative. Obama is only going to get one of those.

If the US is to stop the current crisis, the government needs to stop borrowing money. Clinton managed to balance the US budget, Bush has recklessly and pointlessly driven the government finances into the ground. The US is going to have balance the budget at some point and that time is going to sooner than people think. When it comes, it is going to be painful.

Realistically the US is looking at a 10 year restructuring of government and the economy - like the UK saw in the 1980s and Canada in the 1990s. By 2018 the average Canadian will have a standard of living 30% to 40% higher than those in the US and in the west it will be 50% to 80% higher.
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