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Posts Tagged ‘imports’

Previously, I uncovered that the CIA is overstating Canada’s government spending by more than 200%, by inconsistently reporting all government spending for Canada, and only federal spending for the U.S., despite both having a federal system of government.

Looking through Canada’s numbers again, I noticed its massive exports hemorrhage from 2008 to 2009. This time, the CIA’s numbers are correct.

From Canada’s entry in The World Factbook:

Exports:
$323.4 billion (2009 est.)
country comparison to the world: 11
$459.1 billion (2008 est.)

Exports decreased by a whopping 30% from 2008 to 2009, despite the downturn not hitting Canada hard until September 2008, when, as one example, the Canadian dollar declined by 20% relative to the USD in less than a full month.

By comparison, U.S. exports “only” fell by 14% from 2008 to 2009, despite officially being in recession since December 2007.

The CIA states that export figures are stated in U.S. dollars based on the official exchange rate. Given an estimated GDP of $1.335 trillion for 2009, Canada’s exports only accounted for 24% of its GDP. Imports for 2009 were estimated to be $327.2 billion, resulting in net exports of -$3.8 billion.

In a forthcoming article, I’ll expand on my discussion from July 1 on “Crash! Are You Ready?” on why claims of a higher dollar being bad for exports are overly simplistic, and how it’s been completely counterproductive for Canada’s central bank and leading politicians to be slavishly devoted to keeping the Canadian dollar below par with the USD. In doing so, they argue for and support government intervention for 24% of the economy at the expense of the other 76%.

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From first-year economics, I remember a glaring omission by the textbook authors in their criticisms of free market interventions.

According to their models, they demonstrated how:

  • A minimum wage higher than the lowest market wage results in higher unemployment.
  • Quotas and duties on imports reduces overall global trade.
  • An increased government share of a country’s GDP results in less overall economic activity.

But they failed to criticize the biggest price control and intervention in the free market — a central bank. Ask yourself why that is.

Check your economic textbooks and let me know if they’re any different from the ones I’ve seen.

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