OT of an OT: Ethanol

[Renegade 13]

Hunpecked said:
Renegade 13: "True, but the state of an economy can not be measured by unemployment alone."

Um, yes, that's why I included GDP per capita and economic growth rate, which Renegade conveniently forgets to mention. BTW, it turns out the US unemployment rate has been consistently below Canada's since the 1980s. If the US economy is "in the crapper" then Canada's is...

Actually, when I was replying I simply forgot about the inclusion of CDP per capita and economic growth rate, it wasn't "convenient" at all. And, as we all know the saying "There are lies, damn lies, and statistics." Essentially, it matters who derived the statistics, what the sources of information were, and the methods used to analyse. But that's neither here nor there, since the statistics are about all we have as a basis for comparison.

"Canada has a trade deficit to Asia and Europe as well, but a huge surplus to the US ($100 Billion per year)"

Ah yes, the trade deficit boogeyman. Canada delivers goods, commodities, and services, and gets little green pieces of paper in return. Sounds like the US gets the better part of the deal here. BTW, if the US economy is "in the crapper," it seems strange that Canadians would accept these IOUs instead of insisting on tangible goods. Also BTW, if the Canadian economy is so dependent on exports to America, it seems that Canada, not the US, would suffer more from a trade war, contrary to Renegade's earlier assertion.

Actually, you should think about it in another way. Canada is better off exporting more, since we really don't need those resources, or else we obviously wouldn't be exporting them. On the other hand, the US obviously does need those very same resources, or else they wouldn't be buying them. Therefore, in a trade war, Canada has the advantage since there's more 'stuff' that the US needs that Canada has, and less stuff Canada needs that the US has. In other words, the US needs Canada more than Canada needs the US, giving us the advantage in a trade war. Then again, we shouldn't deceive ourselves into thinking either country would "win" a trade war. Both sides would lose, it's just a matter of to what extent. We're better off as trading allies, trading with each other rather than certain other places from overseas who may not ultimately have the best interests of either country at heart.

"Also if you take a look at the governmental deficits..."

While I have my own reservations about US government priorities, note that only a strong economy can support such levels of politically-motivated spending, i.e. the people who finance the debt obviously have confidence in the economic future of the US. Now if Renegade is of the view that American government is "in the crapper," he's welcome to his opinion. Confidence in the US economy, however, isn't a matter of opinion, it's a demonstrated fact.

I'm forced to disagree with you here. It's a very foolish economic policy to borrow endlessly; it'll end up biting you in the rear end. I also disagree that it takes a strong economy to support such huge deficits, since if the economy was truly strong, such borrowing wouldn't be necessary in the first place! It's not so much that the lenders have great confidence in the future economy of the country, it's that there such a huge collateral to secure it! For a personal loan banks want a vehicle or house for collateral, and as long as you don't want to borrow beyond the value of the collateral, they're happy to lend you money. After all, they're the ones who benefit via the interest. Now imagine if you had an entire country as collateral. You could easily borrow into the trillions, but it doesn't mean the economy is great. Also, perceived as being great does not necessarily translate well into reality, as SJ mentioned.

My intention in replying to Renegade's post was not to demonstrate any superiority of the American economy or the wisdom of American policy. I wanted merely to point out that the Canadian and American economies are quite comparable by size-independent measures, both strong, and neither can be characterized as "in the crapper" by any stretch of the imagination.

Here I agree with you. I was mistaken in my original post that the American economy was circling the drain, at least in certain aspects. This seems to be what you're trying to point out to me, and I agree. However, I do think I'd rather be in charge of the Canadian economy than the American. I think it has better prospects.