Just seven weeks ago, Flaherty delivered the budget and his deficit projections. Today, a "real" economist delivers a scathing report, which suggests the deficit for the next two years will be a staggering 30% beyond what Flaherty presented. Granted, this is just one forecast, but given this is the same economist who said we were in recession when Harper was saying the worst was probably behind us and Flaherty was in denial, I know who I'm inclined to believe:
The worsening recession will drive Ottawa $18-billion deeper into deficit over the next two years, a leading economist is predicting - an increase beyond existing government forecasts that appears set to push annual budget shortfalls into record territory.
The Toronto-Dominion Bank's calculations - using their updated economic forecasts - would see Canada's federal debt swell by $81.5-billion over the next two years instead of by $63.5-billion as the Harper government forecasted seven weeks ago.
"This illustrates the risks that are inherent in the economy right now," Toronto-Dominion Bank chief economist Don Drummond said.
Canadians are ready to except deficit spending during a recession, in many respects the government receives a free pass. However, when just mere weeks after your budget- which represented a major revision from your fiscal update, which represented a major revision from your election rhetoric- we start to see further evidence of bad forecasting and "rosy" forecasts, that "pass" from the public becomes massive baggage.
What we are seeing here, a distinct pattern, wherein the Conservatives look completely out of touch, continually unable to read the landscape and plan accordingly. You can't keep blaming the changing economic indicators, particularly when the contradictions come so quickly. How can Kevin Page get it right, and not Jim Flaherty? How can Don Drummond see worsening conditions, while Harper thinks it's time to brag? It's one thing to weather a storm, quite another to continually get it wrong, at every single turn.
It's a long time before the deficit projections come home to roost, and we all know how good Flaherty is at covering up the bad news bottomline, but this really speaks to credibility. Tell the average Canadian, a family of four now owes $2500 more than they did just seven weeks ago, not including the interest, and you might start to see more angst. If, we start to see more forecasts, and Carney's climbdown this weekend is further evidence, then this particularly disconnect between the Conservatives and reality, might just be the final nail, from which they'll never recover.