In a word, no. Dan Mitchell, a senior fellow at the free market focused Cato Institute deftly shoots holes in the argument made by Canadian writer Jonathan Kay in The Atlantic. Kay makes the case that if only the U.S. would raise its overall tax burden nearer to the average for OECD nations, the Land of the Free would have plenty of money to pour into upgrading its infrastructure. On his International Liberty blog, Mitchell takes apart the case made by Kay piece by piece. He makes the case quite clear, without even employing his trove of Laffer Curve examples.
Canada is now one of the world’s most economically free nations thanks to relatively sensible policies involving spending restraint, corporate tax reform, bank bailouts, regulatory budgeting, the tax treatment of saving, and privatization of air traffic control. Heck, Canada even has one of the lowest levels of welfare spending among developed nations.
So when I saw a column in the Atlantic, suggesting that America can learn from Canada, I was instantly intrigued.
But it turns out that the author, Jonathan Kay, was more interested in extolling the virtues of big government rather than boasting about his nation’s economic reforms.
He starts by grousing about sub-par infrastructure in America.
There hasn’t been a new major airport constructed in the United States since 1995. And the existing stock of terminals is badly in need of upgrades. Much of the surrounding road and rail infrastructure is in even worse shape (the trip from LaGuardia Airport to midtown Manhattan being particularly appalling). Washington, D.C.’s semi-functional subway system feels like a World’s Fair exhibit that someone forgot to close down. Detroit’s 90-year-old Ambassador Bridge—which carries close to $200 billion worth of goods across the Canada-U.S. border annually—has been operating beyond its engineering capacity for years.
I have little doubt that America has serious infrastructure problems, particularly in big cities (such as New York, Washington, and Detroit) where spending decisions are driven by a desire to line the pockets of unionized bureaucrats rather than to provide services to taxpayers.
But is the United States really some sort of third-world backwater compared to our northern cousins? A few years ago, I looked at data from the World Economic Forum’s Global Competitiveness Report to see how the United States was ranked for infrastructure and discovered America was in 12th place. Which was higher than Canada’s 15th-place ranking.
Read more here.