Saturday, August 9, 2008

They Called It

Numerous leftist commentators stated that one of the goals of the Paul Martin/Jim Flaherty tax cuts was to eventually cripple the fiscal capacity of the Canadian state to impact positively on the economy. [Kinda sick how the great liberal progressive Paul Martin Jr.'s policies flow so seamlessly into the terrible, retrograde Tory Jim Flaherty's 'eh?]

"Tut-tut!' Said Flaherty. As the folks at PEF quote him in January 2008:

Finance Minister Jim Flaherty said Monday that there’s no substance to worries that the country will head back into a deficit situation if the economy slows. Flaherty was responding to a new report by the left-leaning Canadian Centre for Policy Alternatives (CCPA), which warned that the federal treasury could easily record a deficit if economic growth slows more than the government expects.

“If [the CCPA] had been paying attention they would have noticed that in the autumn we were anticipating some slowing in the Canadian economy, as a result of the quite significant slowing in the U.S. economy,” Flaherty told reporters at a Vancouver news conference. “For that reason, in the fall economic statement on Oct. 30, we made dramatic historic tax reductions — business tax reductions — in Canada,” he said.

“We will keep spending within the rate of growth of the economy, and quite frankly, I hope to do more than that,” he said. “I want to make sure we keep the budget in surplus.”

Here it is, July-August and:

The federal government has started the new fiscal year in a rare deficit position, announcing yesterday it was $517 million in the red after two months as tax cuts and a slowing economy sliced into revenues. Finance Minister Jim Flaherty said revenues fell $1.6 billion combined in April and May, 4.1 per cent less than the same period last year. Ottawa’s take from the goods and services tax fell $876 million, or 20.9 per cent, with the GST’s percentage point cut in January. Last year, Ottawa took in $2.8 billion more than it spent during the April-May period.

Marc Lee of PEF awaits his apology. You won't get it. After Flaherty gets done weeping tears of nostalgia (the current deficit reminds him of his destructive days under the Harris regime in Ontario), Flaherty will begin casting around for some extraordinary, totally unforeseen (except by the witchcraft of the CCPA) exigency to blame for his stupidity.

But, once again, ... as with so many other things, the left called it.


Stephen said...

Back in October of last year, Bob Rae wrote an op-ed for the Globe in which he warned that Stephen Harper would collude with Gilles Duceppe to hobble the federal government, using the throne speech to announce a plan to permanently weaken the "spending power of the federal government."

This threat to confederation and visionary nation-building was, according to Rae, one of Duceppe's "conditions for propping up the Harper government."

Now, less than a year later, we see the results of Bob Rae's own propping up of the Conservative government: a federal government lacking the full fiscal capacity to act in the best interests of its citizens.

What Rae warned might be carried out with the help of the BQ has instead been accomplished with the help of his own party, the Liberals.

thwap said...

Ugh. Bob Rae. How do I get to read your blog stephen?