Saturday, July 18, 2009

The reviews are in: Con Fantasy World Edition

James Travers:
Just last fall, fooling enough of the people, enough of the time was pretty easy. With an assist from political rivals, Stephen Harper kept economic reality at bay until after federal ballots were counted.

Now the Prime Minister is engaged in the much more difficult project of persuading history to repeat. He wants voters in the next election to believe the ballooning deficit, the one a recession-proof Canadian economy was so certain to evade, will fix itself.

Fantasy is the free lunch of politics. Eventually, this generation or another will have to pay the price of feasting at the groaning board of stimulus spending.
Realism wasn't central to Conservative strategy in the last election; it's apparently not what they have in mind for the next. Hoping voters will suspend their disbelief a second time, the ruling party is again dangling the prospect of a pain-free future.

Splendid if true, the Conservative chiaroscuro rings false.
But wait, there's more! Jeffrey Simpson:
Now the respected economist Dale Orr joins the Parliamentary Budget Officer and TD Economics showing the federal government's fiscal forecasts are off, way off.

So what? Almost nobody believes the government's fiscal forecasts anyway, and with good reason.
Make no mistake: When you incur steady deficits, you pay for them eventually. The political choice therefore is whether Canadians should start paying soon after the recession ends by raising taxes and/or cutting spending, or delay but pay a larger amount later.

The easy way out won't happen: that a resumption of normal economic growth will balance the budget by 2013-14. That had been the Conservatives' hope; that remains the government's spin. It is almost certainly wrong.
And as an added bonus, the Chronicle Herald editorial board:
Stephen Harper should have learned from December’s bumbled budget — which nearly brought down his government and had to be rewritten because it missed the gravity of the recession — that you don’t inspire confidence with numbers no one believes.

Yet here we go again. A warning from Parliamentary Budget Officer Kevin Page that the deficit won’t be cured by economic growth in the next five years, as the government’s January plan predicts, hit a stone wall of hostility and denial from Mr. Harper and Finance Minister Jim Flaherty.
This push-back is worrisome in a couple of ways. A set-in-concrete view of taxes and policy options is not an asset in managing an economic crisis marked by unpredictability and sudden shifts in business conditions and confidence. And it’s just intellectually lazy to say we know the deficit can be put on autopilot for some unknown period and will turn out all right.

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