How about that Canadian dollar? It is sitting around the 90-cent U.S. mark and predicted to go to par with the U.S. dollar by 2007, something that hasn’t happened since about 1976. It is quite a way from the 64-cent dollar a couple of years ago. Good news for Americans holding Canadian dollars and for Canadians purchasing goods from the U.S. Bad news for Canadians holding U.S. dollars and for Americans travelling to Canada.

Part of the reason that our dollar is doing so well is that our economy is in pretty good shape even if in certain resource areas you wouldn’t notice that. But a bigger part may be the problems in the U.S. economy. It is not only the value of the Canadian dollar that is rising in relation to the U.S. one, but other world currencies as well.

This is neither surprising nor unexpected considering the mess that the regressive U.S. administration has got that country into. An insane regimen of tax cuts, corporate give-aways and heavy spending on foreign wars has put that country in a disastrous position, kind of like a chronic gambler who has gone into hock to his bookie for far more than he can ever hope to repay. Sooner or later somebody’s leg is going to get broken. The bad news for Canada is that the U.S. is our biggest market and when the goons come to square accounts with the Americans we will no doubt suffer collateral damage.

About the only insurance that Canada can take out to reduce its exposure in this area is to depend less on the U.S. market by developing a more diversified trading strategy. That is something not easy to do, kind of like giving up smoking or quitting a heroin addiction, and probably less likely in the near future with the current government which has much in common with the U.S. administration and is looking for even closer, more subservient ties to that country.

Last week the Conservative government released its first budget. Among other things it contained a reduction in the goods and services tax, assorted tax breaks for a variety of people, including corporate income reduction, and a $1,200 annual allowance for parents of children under six years old. Although there will be an increase in personal income tax, in all it looks like more spending and less taxing to cover the expenses. One wonders what the political term conservative even means anymore.

Canada’s Finance Minister, Jim Flaherty, has said that Canadians pay too much tax. He only has it partly right. Some Canadians pay too much tax and all Canadians pay the wrong kind of taxes. Taxation is not necessarily a bad thing, and when done right most of us benefit more than we pay.

Taxing those who accumulate excess wealth and putting that excess to work providing services such as security, healthcare, transportation, education and such to everyone for little or no extra charge is a great benefit to society. Putting the burden on those who are struggling to get by to start with while creating exemptions and benefits for those who are well off on the other hand is socially destructive.

For an example, one only need compare the healthcare available to the average Canadian and to the average person in the U.S. Most Americans would almost die to have the level of service that we have in our publicly supported system in Canada, all of the propaganda to the contrary aside. In fact many of them are dying because they do not have it.

One problem with the Conservative budget is that a piddling one percent reduction in the GST is featured. Here is an example of a wrong kind of tax. The GST and provincial sales taxes are regressive taxes that take from those who can ill afford to pay them as well as those who can. Rather than tamper with such bad taxes, real tax reform would eliminate them. Instead taxes should be raised from those who can afford them by increased income taxes in the upper brackets.

Of course, some will argue that taxing those who have a great abundance of wealth is bad for the economy. However, it can be pointed out that during the prosperous 1950s in the U.S. the top marginal tax rate was over 90-per cent, unlike the 30 to 40 per cent range it has been running the last two decades. One might better argue that the current low tax rates and high levels of spending are really what are going to prove to be bad for the economy.

The heart of politics is the distribution of wealth. Every government has this as its primary function and the differences between political philosophies can be best defined in how each sees that distribution.

Today we have what passes for a Conservative government. Traditionally we could expect a balance between expenses and income, but tradition seems to be dead.