Tuesday, April 14, 2009

Will Harper be honest with Canadians?

Apparently Michael Ignatieff is making news because, in response to a question today from a citizen about how we can deal with this escalating deficit, he admitted we may need to raise taxes to get the books balanced again.

A political faux pas, to be sure, in the sense that it's bad politics to give honest answers to Canadians when they ask tough questions of politicians. It's better to just lie, and tell them the Gum Drop Princess will just plant more candy canes. Which seems to be the Conservative economic policy, as far as I can tell.

Of course, the Conservative war room is all over this. They're going to need to re-cut their first negative ads. That doesn't change the fact though that Ignatieff is right. And it doesn't change the fact that the Harper Conservatives aren't being honest with Canadians about the deficit, and how we're going to get out of it.

But then, what else is new? Harper denied there would be a recession, right up until we were already hemorrhaging jobs. Instead, he talked about buying opportunities. He said me, run a deficit? Never! And then when the election was over, he abruptly changed his mind. Instead of bringing in stimulus in the fall, he played political chicken -- and nearly lost. And he continues to mislead Canadians about the true size and scope of this downturn.

So is it any wonder the Conservatives aren't being honest with us about the deficit?

We were heading for a structural deficit before the budget, and its getting worse. Once the economic tsunami has passed we won't be able to grow our way out of this hole. Private sector forecasters and the parliamentary budget officer agree Jim Flaherty's go-forward revenue projections are grossly optimistic. Harper isn't being honest with us about the challenges ahead. They're trying to hide the problem. But we will have to deal with it.

If we're going to get back into the black after this economic storm passes, then there will either need to be tax increases, program cuts, or some combination of the two. I give Ignatieff credit for saying the politically unpopular: we'll need more revenue, ie. taxes.

Harper owes Canadians some honesty here too. Where's his real, realistic plan for dealing with this deficit. If he says tax cuts are a no-go, what specific programs does he plan to cut to balance the books? How is he going to deal with the deficit? What's his magic plan?

The Conservatives can play the tax bogeyman all they want. They'll even scare the more gullible among us. The rest of us, though, want some answers. Taxes? Program slashing? What's the plan, Steve?

Actually, the answer is b) gutting program spending. It's long been their game plan: choke off government revenue, forcing a radical reduction in the size of government. The only way to undo it? Politically unpopular tax increases to preserve program spending. Of course, they won't tell you this now.

Why? People like program cuts in the abstract. But in the real world, they like those services and programs, and would punish Harper for planning to gut them. So he'll promise abortions for some, minature American flags for other, and hope we can't put two and two together.

But I'm betting Harper is planning on not being around when the bill comes due leaving it up to, once again, the Liberals do the heavy lifting, make the tough choices, and clean-up his mess. Just like we did with the last Conservative deficit.

FOR MORE: Far and Wide, Liberal Arts and Minds and Impolitical.

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1 comment:

ktr said...

Jeff, you are wrong on this one.

The conservative answer is neither A nor B: it is what they have always done. Tax credits and tax cuts in a sleek combination with fuzzy accounting will always balance the budget.

A tax credit for male gun owners makes sense, as some of them have felt the effect of this recession and lost their truck and wives.

And perhaps yet again he should reduce personal income tax rates from 15% down to 15.5% (as he did when he first took office in budget 2006).