A federal deficit, but a golden age for snowmobile grooming machines

Stephen Gordon reviews yesterday’s economic update.

The structural deficit introduced by the GST cut had to be addressed at some point. The 2011 budget would have been too early: the recovery was still fragile. In February, I was of the opinion that a small amount of fiscal contraction was appropriate for the 2012 budget: private-sector employment had recovered its pre-recession peak, and it was time to get federal government’s house in order in time for the next recession. And that’s what we got, although in the form of modest spending cuts (the 2012 budget had nothing on Paul Martin’s 1995 austerity program) and not a reversal of the GST reduction.

The main effect of slower-than-previously-expected growth is less income and expenditure, which means lower tax revenue. This would be bad news if Canada’s deficit and debt were at the levels they were 20 years ago, but—thanks to Paul Martin and Jean Chrétien—Jim Flaherty has a much thicker cushion to work with. Bond markets will not be upset by a slight delay in the path to a balanced budget, so there isn’t any pressing need for further fiscal tightening.

Erica Alini explains why you’re seeing different projections for this year’s deficit. Meanwhile, David Akin reviews what “important government spending” the Conservatives were focusing on yesterday.




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A federal deficit, but a golden age for snowmobile grooming machines

  1. “While we are committed to controlling government program spending by
    eliminating waste and inefficiencies, we have made a deliberate choice
    to protect what we consider to be important government spending.”

    Waste and inefficiencies, like failing in your fiduciary dutiy to impartially protect Canada’s waterways, Canada’s environment and fund the scientists and establishments that can and have carried out those duties admirably through both Conservative and Liberal govts [ NDP at provincial levels] for decades now – until this govt showed up. Many of those items are fine in and of them selves, although as the title suggests do we really need govt mps to show up cheques in hand for a snow grooming handout just because the old libs dined out on it? Any mayor, councillor or local rotary/lions/ski club prez could do the job as well.

    Truly Harper has become Chretien without the charm and an ignorant sneer for any science that clashes with his agenda and the possibility of founding a Conservative NGP.

  2. I found the NP editorial about J.Flaherty’s stimulus programmes in 2009, being described as a deficit-killing measure, very confusing. Good article about vegetables and MRIs and conscious states…at least some vegetables actually have perception and a level of consciousness.
    I’m learning about agent based models for use as an alternative to enhanced brain humans and AI programmes in the future. Need better documentation of rare present world events to learn how actors think. An MIT sketch augmentation paper asked designers their thoughts as they thought of product blueprints, which is rudimentary. So when CPC is forced to make stimulus programmes to avoid losing/tying an election to Dion, it isn’t helpful for posterity (who will prefer non-revolutionary administration of risks if possible) to not be able to model a recession accurately (the cdn Stimulus was to create enough jobs to preserve CPC gvmt through the next election). We had the only non-Green stimulus, which makes me wonder if the inneficient small town CPC mentality can’t kill two birds with one stone, or just wouldn’t. If there is a pandemic and a recession, I’d prefer Lib economists and the Liberal selection of science Ministers and ministers of Health.

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