The downgrade

Jann Arden called them ‘pricks’. In return (she says) they threatened her. And so the latest social media ugliness unravels between the iconic Calgary-based musical artist and the folks who want Alberta to be a separate country or, even better, part of the USA.

Since the Carney victory a few scant weeks ago, the steamy little issue of secession has fired up again. Some people think that two million votes on a referendum (which will never happen) would justify making 41 million of us poorer. Many of them like MAGA, too. They love Pierre Poilievre. And Danielle Smith. Plus Preston Manning.

Alberta will never leave Confederation, of course. The Clarity Act makes that impossible. Besides, the vast majority of people in that province are proud of Canada and happy to be a part of it. Sometimes they elect weird, extreme leaders. But we all have our moments.

Anyway, here’s a suggestion for Jann as she fights the traitorous rolls: use facts.

Late last week the rating agency Moody’s downgraded America’s credit rating. This was a big deal, since it’s the last of the majors to admit the US is on a poor economic trajectory.

Said Moody’s: “This reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”

By the way, the agency had given America a perfect credit rating every year since 1917. So what happened now?

Lots. The States carries a federal debt load of $36.22 trillion, and Trump’s current budget bill will increase that pronto by $4.5 trillion. He wants to seriously cut corporate taxes, reduce personal taxation and increase defence spending while saying tariffs will help pay for it. But Moody’s and everyone else sees a chaotic, incoherent, haphazard trade strategy coming out of the White House which is helping to increase inflation, reduce consumer spending and hasten a global recession.

So Moody’s says things will deteriorate. Federal debt will equal 135% of GDP within a decade (it’s now at 126.4%). As the Biden years ended, that ratio was just 98%.

Now, it’s clear the US remains an economic powerhouse. Nine of the ten largest corporations in the world are based there. The rater admits that America, “retains exceptional credit strengths such as size, resilience and dynamism and the continued role of the US dollar as the global reserve currency”. Without a doubt your investment portfolio should maintain 30% exposure to American markets with a quarter of your assets denominated in US$.

But join them? Nah. Not a chance.

Let’s compare with Canada. Moody’s maintains a triple-A rating for this country, which is the highest possible and superior to that of Trumpland. Our outlook is called ‘stable’ and that of America has been degraded. We have the lowest-possible risk of default and no change is indicated in our credit rating, based on the current government and economic projections. The agency says it is confident in “Canada’s strong economy, well-developed institutions, and effective policy responses.” Our currency is also rated triple-A, “reflecting Canada’s strong policy effectiveness and open capital account.” Plus, we have one of the most stable banking sectors on the planet.

All facts, Jann. Here’s some more.

While the US debt-to-GDP ratio is 126%, ours is 106%. The American federal debt (in Canadian dollars) is $46 trillion. Ours is $1.2 trillion. The American economy (at $30 trillion) is 15 times larger than ours. But their federal debt loan is almost 30 times greater. About 28 million Americans have no health care coverage of any kind. That number here is about zero. If you’d like more stats, Ms Arden, check out this blog post.

Finally, remind the whackos buying ‘Alberta Republic’ ball caps what happened the last time a political movement came along focussed on macho cowboyism (when Pierre was 12). The Reform guys never achieved power but managed to cleave Conservative support, throw a bunch of elections and keep Liberals in office for another ten years. It all led to the extremist Poilievre party that just turned an historic 20-point lead into a defeat.

That’s the thing about pricks. They think with the wrong organ.

About the picture: “Here’s YoYo the Canadian Cocker Spaniel showing his specialty – food bowl diving,” writes John, in Ottawa. “If you squint at it, it kind of looks like he’s graphing global trust of the USA by month. Ok, maybe not, but dogs are smarter than we think…”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/05/18/the-downgrade/