Making matters worse

The most immediate response to (Won't Admit To A) Deficit Jim's fiscal update has focused on the Cons' attempt to attack the opposition parties. But it's worth highlighting the fact that by cutting back in the middle of a recession, the rest of the update actually figures to make the existing downturn even worse:

As the rapidly worsening global recession pushes governments around the world to step up spending, Ottawa's first official response is to cut back...

By cutting government spending, limiting its transfers to the provinces and padding its revenues by charging commercial banks to partake in money-market measures, Mr. Flaherty said he will narrowly avoid a deficit.

But his moves are exactly the opposite of what many economists recommend in times of recession. Government spending should not be contracting when the economy could use a boost, they argue. In most other developed countries, governments are ramping up multibillion-dollar programs ranging from infrastructure spending to food stamps for the poor.

"On balance, it's quite the opposite of supporting growth," Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said of Mr. Flaherty's update. "Under the current circumstances, it's unusual, to say the least, given that almost every other major country in the world is moving to stimulate the economy."...

"I just can't imagine that this document will have any shelf life at all," said Steve Murphy, an economist at the University of Toronto's Rotman School of Management.

His own detailed forecast was central to the federal government's case for showing a surplus, but only because Ottawa took his numbers and changed them to assume government cost-cutting, Mr. Murphy said.

"My cynicism has reached new heights. What else can I say?"

Needless to say, Deficit Jim and Recession Stephen figure to have little company in thinking there's any merit in fudging numbers into the new year to see just how much worse things can get before any effort is made to boost Canada's economy. And the more Canadians realize that the Cons alone out of the world's governments are putting their own ideology over the steps which could actually start to reverse the economic damage, the happier they'll be to see a change in government - whether through a coalition or through another election.