Balancing the budget with the Harper Government panty auction

With a rather large deficit to tackle in a March 22nd budget that will be critical to the future of the Conservative government, people have been wondering just how Jim Flaherty intends to rein-in the bottom line while still finding billions for prisons, stealth fighters and corporate tax cuts.

Well, deep within the recesses of the Public Works department, the key to the secret Conservative deficit reduction plan has been revealed: they're auctioning off surplus panties.

Yes, that's right. With bidding starting at just $30, you could own 17 pairs of surplus government panties. They're all size medium and they're being sold as is. All sales are final. And, most disturbingly, they're described as "like new."

And as you can see from the pictures here, we're not talking government granny panties. No ma'am. These are sexy surplus government panties. One of them even says sexy, so there you go.

If you'd like to get your hands on the goods before bidding, they're available for inspection on Wednesday afternoons at the government panty warehouse in Ottawa.

So do your bit for the nation, and help Jim Flaherty get this deficit under control by buying these Government of Canada -- no, I'm sorry, by buying these Harper Government panties.

Recommend this Post on Progressive Bloggers

Quiet! Harper the economist is speaking!

Shhh!. Stephen Harper, economist extraordinaire, is speaking! Let's all listen:

Canadian Prime Minister Stephen Harper said today he will balance the federal government’s budget after the recession ends without reducing program spending or raising taxes.

Harper also said he will “never” cut money transfers to provinces, which are largely used to fund health care spending. He spoke to reporters in a televised press conference in Quebec City.

“At the end of this recession, we will go back to a balanced position and there is no need to cut program spending or increase taxes in order to accomplish that,” Harper said. “The Conservative government will never cut transfers to the provinces.”

So, if you're scoring at home, Harper is promising a budget deficit that his government vastly underestimated (and still does), a structural deficit that pre-dates the downturn, will be magically balanced without raising taxes, without cutting program spending, and without cutting transfer payments.

Either Harper, who is an economist don't you know, has some sort of economist budget balancing magic wand, or he's planning to get the hell outta dodge before the bills come due.

Recommend this Post on Progressive Bloggers

Where's the plan, Steve?

In the midst of a disastrous week for the Conservatives, Stephen Harper finally admitted what has been obvious to everyone with half a brain for months: the Flaherty budget projections of emerging from deficit within five years are fantasy and will not be met:

Prime Minister Stephen Harper has scrapped his government's controversial promise to stop running annual budget deficits in five years.

For the first time, Harper said today that keeping the government's pledge to balance Ottawa's books by 2013-14 will depend on how quickly Canada's economy recovers.

"We will allow the deficit to persist if necessary," Harper said.

At least he's not lying to us anymore on the deficit time line. But while, once again, he is tacitly admitting that he and his finance minister were very wrong (see $50B deficit) and Parliamentary Budget Officer Kevin Page was very right, he still wants us to know Page is dumb:

But yesterday, Mr. Harper disputed the suggestion that the government would need to slash spending or boost taxes to balance its budget when the economy recovers.

"We will not start raising taxes and cutting programs. That's a very dumb policy and, to the extent, frankly, that the parliamentary budget officer suggested it, it's a dumb position," he said.

Well, Harper is an economist, after all. I'm just a writer, but I have to say I find Harper's plan to balance the budget, which seems to boil down to "do nothing and hope for the best" to be irresponsible and doomed to failure. Maybe Harper just doesn't plan to be around when the bills come due?

But it has become increasingly clear that we won't be able to grow our way out of this hole. Through endemic Conservative economic mismanagement, we're now in a structural deficit, as Page has reported. Harper seems to dismiss this finding, but let's consider his and Page's track-records here: who you gonna believe?

There are only two ways to deal with a structural deficit: spending cuts or tax increases. Or some combination thereof. There is going to need to be sacrifices, and Canadians deserve the truth from their government, not the willful ignorance of Harper and Flaherty.

According to Ipsos Reid, Canadians are increasingly skeptical of the veracity of anything the Conservatives have to say on matters budgetary. Indeed, just 35 per cent of Canadians believed the Harper Conservatives would be able to meet their budget commitments. And that was before Friday's credibility-busting admission.

The poll also found 88 per cent of Canadians favoured spending cuts over tax increases, which is hardly surprising. Asked in isolation, that's always going to be the case. But ask someone to choose between actual services, such as health care, and taxes you're going to get a different answer.

Ipsos doesn't seem to do that, but they do ask which spending people would like to see cut first:

But if the Canadian government and others were to cut spending, the top three programs that should be on the chopping block are, according to survey respondents, foreign aid, salaries and benefits of government workers and military spending. Environmental protection, public transportation, education spending and health care were at the bottom of the list.

Fact is, you're not going to find substantial savings in government spending without getting into those areas favoured for protection by survey respondents. There's little savings to be found in foreign aid and government salaries, and military cuts would be difficult. Much of the recent spending there has been capital acquisitions anyways. But the point is, to have any meaning, a spending cuts-alone policy will hurt those areas Canadians don't want hurt.

Of course, it's a discussion Stephen Harper is unwilling to have with Canadians. Just cross our fingers, he says, close your eyes, keep spending, and never mind the perpetual deficits. It will all be fine. Trust him.

You're supposed to be an economist, Stephen. And you're supposed to be a leader. So level with us: where's the plan? Or are you just making it up as you go along?

Recommend this Post on Progressive Bloggers

Structural deficit, or how Harper and Flaherty squandered the sacrifices of the 1990s

Jim Flaherty: Worst finance minister, ever?

OK, a harsh statement to be sure. But I’m really starting to wonder about Jim Flaherty and Stephen “I’m an economist” Harper, and the evidence is adding-up.

Here’s just a few of the headlines the latest report from Parliamentary Budget Officer Kevin Page is generating:

Harper got it all wrong, budget watchdog says
Deficit still looming in 2014, financial watchdog says
Federal deficits to total $156 billion, job losses to mount: budget officer
Raise taxes or cut spending to end deficit: Report

It’s a report that, once again, showcases the utter incompetence of Flaherty and of this government when it comes to budgeting, fiscal forecasting and economic management, and drops one major bombshell: we are now in a structural deficit.

Why is that significant? Everyone (well, nearly) agrees that, in this downturn, a deficit is necessary to help the economy through one-time stimulus spending. This temporary spending will end with the recession, so that, along with economic growth as the economy recovers, we’ll return to surplus in short order without substantial cuts to core services.

A structural deficit, however, is one that is deeper than just short-term stimulus funding. A structural deficit cannot be overcome by the end of stimulus programs and economic growth alone. A structural deficit cannot only be tamed by either program cuts, tax increases, or some combination thereof. And that’s where we now are, thanks to the economic mismanagement of Harper and Flaherty:

In his latest fiscal projections, to be officially released Wednesday but parts of which were obtained by Canwest News Service, budget officer Kevin Page says the deficit will be nearly $156 billion over the next five years, much deeper than the $103.2 billion cumulative deficit that Finance Minister Jim Flaherty's department has predicted.

According to Liberal finance critic John McCallum, Page is forecasting a structural deficit of $17 billion, which means that even with economic growth, even with the end of stimulus, we’ll still be $17 billion in the hole.

It’s not just on the deficit that Page is calling-out Flaherty’s incompetence. It’s also on jobs:

According to sources, the budget officer predicts between 190,000 and 270,000 fewer Canadian jobs this year than estimated in the budget.

For next year, the discrepancy rises to between 200,000 and 500,000 fewer jobs, and even in the years 2011-2014 _ when the recession is expected to be a painful memory _ there are expected to be between 100,000 and 380,000 fewer Canadian jobs each year than the government assumes.

I really have to question if anyone, even Jim Flaherty and Stephen “Want to see my economics degree” Harper can really be this incompetent in their forecasting, of if they really do know better and have just been misleading Canadians. I think it’s some combination of the two.

Look at the track-record. During the last election campaign, the Conservatives repeatedly said if there was going to be a downturn, it’d have happened already. The only way we’ll go into deficit, they said, is if you elect the Liberals. They released a fiscal update in November that ignored the fiscal reality to instead play politics, and laughably insisted there’d be no deficit. When they released their budget in January their overly rosy revenue projections were panned by the experts, until months later Flaherty finally admitted his $50 billion mistake. And as Page’s new report makes clear, that was only the tip of the iceberg that is this government’s incompetence.

One has to wonder though if structural deficits aren’t really part of this government’s plan. What better way to shrink the size of government no matter who is in power (their supposed ideological goal) than sharply choking-off its revenue? That’s what their GST cut was really about: choking off revenue to tie the hands of future governments around program spending.

Whether it was by design or by incompetence though, the structural deficit is now reality. So it’s time for the Harper Conservatives to start being honest with Canadians and tell us how they plan to get us out of this deficit.

Will they raise taxes? If so, which ones, and by how much? Or if, as they insist, they’d never raise taxes ever ever, what program spending will they cut? Where are they going to find at least $17 billion in savings? Which programs, exactly, do you plan to dump over the side?

Or, once again, do they plan to just skulk off into the night and leave the Liberals to clean-up their mess? Whether it’s the federal Conservatives of the early 1990s or the Mike Harris/Jim Flaherty Ontario Conservatives of the early 00s, that does seem to be their pattern.

Recommend this Post on Progressive Bloggers

(Video) Tony Clement on deck to defend the government

It seems the Conservatives have designed Tony Clement as their go-to talking head to take the bulk of the media interviews yesterday and today about the election speculation and the four questions Michael Ignatieff wants answered by Stephen Harper ahead of Friday's confidence vote/s.

This video is Clement's interview yesterday evening on CTV's PowerPlay program. I thought Tom Clark gave him a pretty through grilling on why the government can't just cough-up the numbers that Canadians have a right to know anyways, and questioning the validity of Clement and the government's claims they can still get the country out of deficit in five years.

Clement looked like a dear in the headlights at times, although all in all I thought he did reasonably well with a bad script, managed to keep his composure, and offered what may at a brief glance seem like a reasonable explanation. On a closer look though, not so much.

The deficit has ballooned since the January budget to over $50 billion, yet the government is still sticking to its five-year out of deficit plan. With a much bigger than forecast deficit it doesn't make sense, right? Clement says it does, because revenues are going to be EVEN HIGHER than forecast in the budget, therefore increased revenues cancel out the increased deficit and the five-year plan is maintained.

Except I find that very hard to believe. Clement says private sector economists are now revising their revenue projections upward. Which ones? Because I recall private sector economists saying Jim Flaherty's budget revenue projections were grossly optimistic. Now we're to believe they've actually vastly underestimated revenues, despite massively underestimating the deficit?

The economists at TD Bank, for one, still say the government's numbers are way off. On next year's deficit, for example, TD says Flaherty is underestimating the deficit by $15 billion. That's a $15 billion hole in the Conservative 5-year plan they haven't explained away yet. Over the next five years, TD projects a deficit DOUBLE what Flaherty forecast in the budget. And Tony Clement wants us to seriously believe revenues are going to increase so much they'll easily cover off that? It doesn't pass the smell test, Tony.

And then there's the Parliamentary Budget Officer, Kevin Page, who has a far better record so far that Flaherty on these matters. Page says the only way to get there in five years is to cut spending, raise taxes, or both. Flaherty says pishaw.

Clement does, at least, say sure, we'll release our numbers. I'm sure they'll make for creative reading.

Recommend this Post on Progressive Bloggers

Video: You don't fool me, Stephen Harper

Recommend this Post on Progressive Bloggers

Video: It's a serious matter

A look back at the day in Ottawa yesterday in just over two minutes. And for the record, not one "seriously" was repeated in the making of this video. Each clip is a new and independent use of the talking-point. And for those Conservative commenters trying to dismiss the atomic docu-scandal as no big deal, clearly the government at least considers it a serious matter...



This is bigger, however, than the scape-goating of some poor staffer. It's bigger, even, than the embattled Lisa Raitt. As Michael Ignatieff said in QP yesterday, it's about the competence of this government. And increasingly, the Stephen Harper government is proving itself incapable of governing responsibly.

Despite knowing there were serious safety concerns at Chalk River for at least 18 months, and really much longer, the government has done nothing but develop talking-points to blame the Liberals while failing to develop a back-up plan for isotope production. It refused to see the economic downturn coming, then promised no deficit, then used a fical update to attack its political opponents instead of addressing the economy, then dramatically underestimated the size of the deficit to the point of absurdity by delivering the biggest deficit in Canadian history. It ignores a growing chorus of provincial leaders and a majority of MPs that want to fix EI. And now TD economists say its plan to get out of deficit is a joke, and we're in for years more of pain than Harper and Jim Flaherty are willing to admit.

It is a serious matter. When will we have competent government indeed?

Recommend this Post on Progressive Bloggers

(Video) The biggest deficit in Canadian history? Priceless

Spent a little time with my video editing software over the weekend, and with apologies to the folks at MasterCard, I bring you these two videos on the "priceless" Conservative deficit.

I'm envisioning a series with two new facts at the top of each spot, so if you have any ideas for future spots please let me know.

And enjoy.

Recommend this Post on Progressive Bloggers

Jim Flaherty is sinking man, but does he know how to swim?

If things were functioning correctly back at the homestead I may get some video up later tonight, but for now the transcript will have to suffice. But Bob Rae made Jim "biggest deficit in Canadian history" Flaherty look rather foolish in question period today.

Bob asked a rather simple question: 37 days ago Flaherty was saying the fiscal situation was on track, but this week he announced a record-setting deficit of $50 billion, minimum. So what the heck happened in those 37 days?

Jim’s comebacks amounted to mocking Bob’s record as Ontario premier and asking if he hates auto workers or not. Oh, and pleading it’s not his fault there’s a deficit so leave him alone.

If this is the best Jimbo can do he must really be at the end of his rope.

Bob Rae: Thank you, Mr. Speaker. Mr. Speaker, 37 days ago, the Minister of Finance knew that the forest industry was in trouble. He knew that E.I. was up. He knew that the auto industry was in the tank. 37 days ago, Mr. Speaker, the minister said at that time, “I'm staying with our budget projection. We're on track.” I'd like to ask the minister a very simple question which he has still not answered. How could he have made such a terrible statement a mere 37 days ago with respect to the financial situation in Canada?

Jim Flaherty: Well, I pay attention to the questions from one of the leading Canadian experts in deficits. And having brought Ontario through that period from 1990 to 1995, so that by 1995, the people of Ontario were paying $1 million an hour in interest only on the debt accumulated during that time. Creating a permanent structural deficit in the second largest government in this country. Here's what the member for Toronto Centre says -- again another hypocritical position. He says if we had a deficit now at the federal level, is that going to be the personal fault of the government. I don't think so. And I don't think that's an intelligent position. And no reasonable person should –

The speaker: The Honourable member for Toronto-Centre.

Bob Rae: Thank you Mr. Speaker. Mr. Speaker, I'm an amateur in this regard. The minister -- ( interjections ) the ministers got the phd -- ( interjections )

The speaker: Order. Order. We can't -- you have to have some order. I have to be able to hear the honourable member for Toronto-Centre. He has the floor. Order.

Bob Rae: -- Minister has become the expert. The minister's become the expert. He's going to win the Nobel Prize with respect to the financial situation. I simply want to ask the minister -- ( interjections )

The speaker: Order. ( Interjections ) Order. ( Interjections ) Order. Yes, there will be more. But we have to have some order so we can hear it. The honourable member for Toronto-Centre has the floor. We'll have some order. Even if it's addressing a Nobel Prize winner. ( Laughter ) ( interjections )

Bob Rae: Thank you, Mr. Speaker. If the Conservative Party takes pride in receiving the Nobel Prize on deficits and debts, that's fine. Mr. Speaker, we know that the Prime Minister spent the last 37 days holed up in his basement watching tapes. I simply want to ask the minister -- I simply want to ask the minister, what has happened in the last 37 days to so drastically change the numbers which he's coming to this house with, Mr. Speaker? That's a simple question.

Jim Flaherty: You know, as much -- humor. This is a serious time. Unemployment is worse than anticipated. The recession is deeper and broader than was anticipated by anyone -- this is a serious time and a serious subject. We have the auto negotiations with respect to Chrysler and general motors, and I'd be interested to know the member's position on that. Is he against supporting the auto industry in Ontario?

UPDATE: Make that a $57 billion deficit.

Recommend this Post on Progressive Bloggers

Some people saw this coming...

I can think of about 50 billion reasons why this Liberal campaign ad from 2004 seems oddly prescient, in light of recent events.

And no, we're not allowed to make this up...

Recommend this Post on Progressive Bloggers

(Video) GritGirl returns: Harper's Conservatives Runaway Deficit

GritGirl is back, and it only took a $50 billion deficit:

Recommend this Post on Progressive Bloggers

Video: The government got it so wrong

Quite the day in Ottawa yesterday. Stephen Harper declares "we need to raise taxes" during question period, and to distract from the PM's verbal slip (which I'll continue to blast out of context because the Conservatives deserve a taste of their own medicine for a change) Jim Flaherty announces this year's deficit will be some $50 billion, the biggest budget deficit in the history of Canada.

Recommend this Post on Progressive Bloggers