Thursday, September 10, 2009

Today in Deficit Jim can't count: math is hard

Whoopsie: "Two-year $101B deficit 'worse than expected:' Flaherty."
The Conservatives admitted today that the federal government deficit would be worse — a total of $101 billion this year and next — than expected and that the government cannot say when it will balance the books again.

In a hastily-released fiscal update, Finance Minister Jim Flaherty said the severe economic recession means that, between now and 2014-15, Ottawa's budget shortfall will total more than $160 billion, the government said.
A "hastily-released fiscal update," you don't say. Whatever could they be seeking to switch the channel from? You guessed it, Mr. Harper's unscheduled detour back to Reformville.

So what's the latest in how far off Deficit Jim is in the damage for the Canadian taxpayer?
In the budget, Flaherty had predicted that the government would begin running budget surpluses again in 2013-14 but he now says there will be an $11.2 billion defict that year, followed by another deficit of $5.2 billion the following year.

He said the deficit this year will hit $55.9 billion, up from the $33.7 billion shortfall predicted in January. And next year's deficit will hit $45.3 billion, up from the January prediction of $30 billion.
That last paragraph's a doozy to behold.

The timidity of this government continues as they repeatedly play catch-up with their targets, low balling estimates then blowing the numbers out of the water later when the pressure to correct the numbers becomes too great. It's understandable that the economic times are unpredictable but Canadians expect the Finance Minister to be at least in the ballpark with reputable economists and the independent Parliamentary Budget Officer, for example. But that's not been Flaherty's track record. And throw in how he hauls the statement out today on a politically turbulent day.

The plan? Major spending cuts it appears that are going to be toxic despite his protestations today that all will be well:
Read Jim's lips. No tax hikes, no transfer payment cuts to the provinces and preserved support for seniors, child care and employment insurance programs. That leaves only one way out of this morass of a mess --- brutally unpopular spending cuts as government shrinks and programs are axed.

Politically, the details cannot be previewed. To even hint at the horrific cuts any future government will have to make in the name of correcting the books would ensure we'd never EVER vote for them.
Under any illusions of what would be at stake should Mr. Harper get that majority where he will teach his opponents a lesson?

It shouldn't be lost in all this how Mr. Harper and Flaherty brought us into deficit well before any of this economic turmoil occurred. With incredible record levels of spending, surpassing previous governments, combined with the reckless politically motivated GST cuts, they've earned criticism of their fiscal management skills.

Changing the channel in the worst way...