Writing about Canada’s economy was fairly straightforward for awhile.
The country was a fiscal disaster in the 1990s, leaving politicians little choice but to cut spending or face the wrath of the bond vigilantes. The Bank of Canada was under the impression that its job might be as simple as raising and lowering its benchmark interest rate to keep annual inflation at 2 per cent. The 1988 election had settled the debate over freer trade: the benefits easily outweighed the costs. Taxes were high, so once the budgets were balanced, there was no point arguing that they should stay there.
Continue reading at the Financial Post ...