Friday, January 23, 2009

Ottawa to bleed 64 billion over two years

The Conservatives have jettisoned the whole idea of balanced budgets for the next few years at least. After two years of hard times under the Conservatives if they last that long no doubt any majority if there is one will go to the Liberals. Unless Harper has a death wish I imagine the upcoming budget will have enough in it to mollify Liberals and result in the budget passing. Ignatieff has no relish for a coalition or a possible election at this time. However it may be difficult for the Conservatives to retain power after presiding during an economic downturn.
Hard right economics and constant criticising of government intervention seems to have gone into the dustbin of history at least for a while. It will be dusted off as soon as things rebound a bit and touted as an obvious truth again.

Ottawa to bleed $64-billion over two years
Globe and Mail Update
January 22, 2009 at 3:07 PM EST
OTTAWA — The Harper government will run deficits over the next two years totalling $64-billion, a top official announced yesterday, also acknowledging it will take up to five years to return to balanced budgets.
A senior official said the Tories expect to run a $34-billion deficit in the fiscal year starting April 1 and a $30-billion shortfall in the year after. “At that point we will see deficits diminish and we forecast a return to surplus within five years.”
The Conservatives appear to be releasing projected deficit figures ahead of time to ensure the focus shifts to the stimulus spending measures when they release their budget on Jan. 27.
Outside forecasters have beat the government to the punch in recent weeks in delivering the gloomy news about Ottawa's fiscal future.

Last week, parliamentary budget watchdog Kevin Page predicted in The Globe and Mail that the government would plunge into deficit for at least five years. On Wednesday, senior Canadian economist Dale Orr predicted it would take six years to return to balanced budgets.

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