Things Canada has done well

This article ignores the benefits of being the biggest trading partner of the country running the largest trade deficit in the world, but it does make some decent policy points about Canada:
http://www.newsweek.com/id/183670

Canada has avoided a number of "populist," and ultimately detrimental, policies that have helped it over the last decade.

Firstly, US mortgages are "non-recourse", where the bank can't go after you forever if you declare bankruptcy and default on a mortgage. This parallels US bankruptcy law regarding entrepreneurship.

This is grossly oversimplified, but US entrepreneurs cannot be pursued by creditors for every asset they own if a start-up goes bankrupt, only for assets owned by the actual startup itself (it does require more than one person to be involved with the business, among many other conditions, if I'm not mistaken). For entrepreneurship, this is a wonderful policy. Entrepreneurship carries with it substantial risks, but a high rate of entrepreneurship is usually tremendously beneficial to a society (there are structural policy issues that can lead to a negative outcome of a high rate of entrepreneurship, but that's a Venezuela-type issue, not a US one). We don't mind people risking the money of others (banks directly, and to a lesser extent, all of us indirectly) if the overall net benefit to society is positive in expected value. Therefore, it's very sensible for society to make small business debt non-recourse. Wikipedia "nonrecourse debt" if you're curious.

Mortgage debt doesn't have this advantage. On the margin, people owning nicer houses than they otherwise would, or owning instead of renting, doesn't confer large societal benefits; any benefit from those people spending more to outfit the house is probably offset by the fact that those people are likely draining their savings to do so. Putting banks (and us) on the hook for a situation with no societal benefit is functionally a transfer payment to subprime mortgageholders that incentivizes bad behavior by these subprime buyers(buying houses they can't afford). It would be much more sensible for society if mortgages were recourse, not non-recourse (this would require some changes to tax law but the changes are manageable).


Another thing the article notes that Canada has done well is immigration. The article calls the United States immigration system "brain-dead." I prefer to think of it as protectionist (which I suppose can also be called brain-dead). In the interest of "keeping American jobs for Americans," immigration is tremendously difficult when coming to the United States. I have dozens of brilliant friends who are forced to leave the US within 12 months of graduating college because the United States won't grant them a visa. Generally, these are people who would contribute far more to America than they would take.

Now, I'm all for a policy where anybody who wants to come here can do so if they can get employment; the United States would not be in the position of strength it has enjoyed without the contribution of millions of Eastern and Western Europeans, Asians, Latin Americans and others who have immigrated into this country. However, I do understand the arguments that state that a massive influx of uneducated immigrants puts a greater strain on the healthcare and education systems. I haven't seen empirical data on the effect of uneducated immigrant influx, so if somebody knows of some I'd love to see it.

However, educated immigrants almost certainly are beneficial to US well-being and likely contribute more to education and healthcare than they take. They probably create more jobs than they "take", as well, because of high productivity. Excluding them is senseless and self-defeating. Recognizing that excluding jobholding, educated immigrants doesn't protect "American jobs' and opening immigration to larger numbers would help us immensely.

Canada also has budget surpluses, a solvent pension system and a more effective healthcare system, but it benefits from a lot of circumstances that the US can't take advantage of because of it's military, entrepreneurial and pharmaceutical prominence.