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I wonder whether, given the role of the Provinces, it would be better to include sub national deficits rather than just the Federal deficits.

That is a good point Richard given the large deficits that have been run up by Ontario and New Brunswick and now Alberta and Newfoundland & Labrador. It would make our deficit to GDP ratio higher.

if you are going to include the provinces in Canada then you need to consolidate the states and municipalities in the US and the laender and large cities in Germany. Other federal countries should also be consolidated. Canada would still end up looking pretty good. No one invests on a country simply because of its low deficit but no one will invest in a country with poor infrastructure and deficient social capital. The latter is the legacy of institutional changes at various levels government brought in by politicians who believed their own rhetoric and doctrine rather than reasonable economic perspectives. The trouble with the chart is that it is a plot of state for those countries. The issue is the change in the deficit and the impact on growth.

I would think there are a variety of structural reasons why unemployment rates differ from country to country. Perhaps you should be looking at the change in rates rather than the levels.

That is a good point too Jim.

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