I'm A Canadian.

I'm not smug, because I know we are certainly not immune to what is happening in the world around us. Any other Canadians out there can fill in any blanks that I haven't.

This article strikes me as more than a little vague in its' terms of reference. The given assumption seems to be that all economies are comparable.

Of particular concern is that we traditionally have a trade surplus against the U.S., and that over 70% of our trade takes place with the U.S. It would be sheer ignorance to blow off what is happening in the states.

But you should also be aware that we have a very conservative banking and housing sector, and a very different economy than the U.S. It's true that we (and I!) have lost a lot in the stock markets.

This is not coupled with as massive deleveraging as the U.S., because our banks are not allowed to have the kinds of leverage ratios that U.S. ones have. Our banks took some hits form ABCP they purchased off of U.S. banks in the last year, as well as some credit default swaps. But they have almost all been generating profits for the last year while U.S. ones have been going bankrupt.

The Canadian Government has been balancing its' budgets for a decade now, and is not ridden with debt and in need of inflating itself out of it. Completely unlike the U.S. government.

In the housing sector, we are not allowed to write off mortgage interest for income tax purposes. In the U.S., you can (as I understand it). This has a major effect from my point of view on how much leverage the average homeowner is willing to take on. I still have to pay tax on every cent I throw into my mortgage (if I buy a place!) Housing prices are simply not inflated and over-leveraged in most parts of the country. They can't come down as far s the U.S., becasue they aren't as high. We were also not allowed to engage in the kinds of loan practices I keep hearing about in the U.S., because home loans are tightly regulated by CMHC (Canada Mortgage and Housing Corporation).

Depending on whether any of our moron politicians can come up with a National energy plan (Trudeau was the last one who even thought about it, back in the '70's) We are not particularly faced by an energy crunch. We produce a lot more coal, oil, and natural gas than we consume.

Our economy tends to follow the U.S., by about 6 months.

So here's what our politicians are facing:

1)No real reason to have a low interest rate like the U.S. yet. Canada, unlike the U.S., is not facing a bankruptcy situation. They have simply, as usual, been trying to peg the Canadian dollar to a lower rate than the U.S. so that our exporting companies can benefit by producing for less and selling for more.

2) No real housing mortgage crisis. Housing has come down, and will come down, a bit in "hot" markets such as Calgary or Vancouver. But there is no, I repeat NO crisis in housing in Canada to date that I am aware of.

3) The 70% trade with the U.S. withering. The auto (and other product) manufacturing heartland in Ontario dying. The forestry industry, already in a bad situation, at a crisis level because Americans aren't buying. The list goes on... Our economy wasn't in crisis, but it will be over the next six months, simply because the U.S. is.

4) No bankruptcy issues per se, but banks that are caught up in the intricate web of international cradit markets, and that have some assets on their books that may be worth nothing. Our credit system is seized up because the world credit system is.

5) Traditional Keynesian counter-cyclical mentality which says that the leaders of the Liberal and New Democratic Party want to try to spend our way out of the problem. Actually, the New Democratic party is socialist and would spend us into bankruptcy regardless of the economic situation. The Bloc, on the other hand, just want to separate Quebec from the rest of Canada.

6) No trade imbalances. Although who knows what the future holds.

7) An economic situation that is going to hell in a handbasket, and no real fixes. Not until the U.S. fixes itself.

8) Unfortunately, a Prime Minister who made a moronic political mistake considering he has a minority government. Immediately after the election, he chose to cut funding for the other political parties and pissed them off to the point where they are pretending they could agree with each other well enough to form a coalition government. Essentially, we have no government at a time when we need one.

If the coalition is successful in ousting our current government, they won't last. While they are in power, nothing meaningful will be done. But a lot of damage could be done if a lot of spending takes place with no clear, consistent strategy. If the coalition is unsuccessful, the Conservatives will still be lame ducks unable to fulfil their plans (right or wrong). And (I probably speak for a lot of Canadians) a general public that is sick of elections and politics and apathetic towards another election.

As far as the criticism the government isn't reacting to the worldwide crisis, well, they didn't have as much to react to. Now they are starting to have something to react to. A lot of the rest is simply opportunistic rhetoric by the political parties who lost in the last election. Flaherty actually said that he would present the new budget a month ahead of schedule and that it would have measures included to address the current situation. It strikes me as irresponsible that the opposition is running around panicking like chickens with their heads cut off. I'm scared they'll do the same if they get power.

I honestly don't know if we'd be better off taking on tons of debt and inflating our way out of this along with the U.S. (as the coalition would do) Or trying to balance the books in a conservative fashion (as the Conservatives have been doing). Either way we're screwed as long as the U.S. is.