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.
13 comments:
As long as Ignatieff's also ready to effectively explain
(a) why it's not the Liberals fault, since they demanded the stimulus and
(b) what the Liberals would have done differently.
On (b)... I don't think "not cut the GST" is a good answer, even though I think it's the right one.
Sorry Jesse, doesn't work that way. Cons are in government, not the Libs, and those aren't OUR projections. I just love how Ignatieff has to explain Conservative inability to read the tea leaves.
In my opinion, it shouldn't work that way, but it probably will.
I haven't seen a lot of "oh, well, they're the government, so let's let the opposition slide" movement anywhere.
And, I brought this up because I seem to recall that "well, what would you have done differently " was a question that tripped Dion up in the English debate last time 'round.
So even if you're right, and the Liberals can just ride "the government screwed it all up" to victory, I can't see how it's a bad idea to be prepared to explain the alternative.
"In my opinion, it shouldn't work that way, but it probably will."
Jesse, it's never worked that way before, the government is responsible. All we have to do is show how the Conservatives failed to accurately read the situation (there are now dozens of ridiculous comments, easily contrasted with same day realities). If you are claiming to be a good economic manager, if your trump card is your supposed expertise, then you're in big trouble if you can't ADD, and you can't read the situation.
If history is the guide, the Liberals need to keep pointing out the inconsistencies, hammer on the numbers and keep our own agenda fairly vague until the campaign. We don't do anything that takes the focus off the Cons management of the economy.
So you're advocating a strategy of avoiding putting forward a positive alternative entirely?
Again, I'm not saying it won't work; I'm saying I think it leaves open the possibility that someone notices, and it causes trouble.
If I may correct myself above, it wasn't the English debate; it was that CTV clip which leaked out where Dion looked completely lost, and the question was "what would you do differently".
If your position is that Ignatieff should just say "not juice the numbers", and refuse to explain, if pressed, how he would have fixed the economy, then I understand where you're coming from (keep the message rolling, don't get sucked into an actual debate over policy)... but it makes me nervous.
"So you're advocating a strategy of avoiding putting forward a positive alternative entirely?"
Not entirely, I think you need to see some contrast now (things like EI reform). However, it's probably wise to hold off on big policy announcements until we're ready for an election. I don't really see the benefit in showing the Conservatives our full hand now, when we're in no position to implement anything, when we can release it during an election- that way our opponents don't have months to plan their counters.
It's funny, because last year I argued we needed policy out straight away, but that was a response to Dion's predicament. With Ignatieff doing fine, broad strokes are enough at the moment, and he can show leadership by setting a general tone, rather than making it about him. Look credible, and stay out of the way while these guys implode. I think they've really blown it now, all these miscalculations are going to catch up with them.
Maybe we've been talking past each other. I'm worried about what the "here's what I would do" answer is for the election, not now.
For now, I don't think you score a lot of "plus" points either way; it's about showing people Harper's shocking "minus"es.
"I don't think "not cut the GST" is a good answer, even though I think it's the right one."
If it's the right answer (and it is), why is it not a good answer?
"it was that CTV clip which leaked out where Dion looked completely lost, and the question was "what would you do differently"."
Actually, the question was some gobbly-gook that mixed tenses and never made clear whether he was being asked what he would do differently now (which was a stupid question since he was campaigning on what he would do now), or what he would have done differently at some point in the past.
But I digress...
Steve's point is that Harper and Flaherty are mischarachterizing our economic condition. If they are not lying they are very poor economists. He is correct in stating that Iggy does not have to put forward a plan now.
More to the point, the fact that Dion bowed to pressure and put out his policy killed him. Sure, the policy (which was a good one), also killed him, but putting it out ahead of an election call was a huge misstep.
Right now the liberals have the advantage of being able to sit back and criticize. It is the same advantage the conservatives enjoyed for years. Soon they will hopefully have that advantage back.
All I'm trying to suggest is that you have to be ready for that question. I think that the two questions I raised initially are exactly how the Conservatives will first think to attack, and they seem to do a pretty good job of getting the media to ask their questions for them.
If the answer is "it's not up to me to answer that", that's an answer. And I am willing to concede that may, before the campaign, be the best answer.
As for the GST... I don't think it should have been lowered, mostly because it was a regressive change. But I think starting off a campaign by saying taxes shouldn't have been cut may not be the best move. And I know it's not the best move unless you're ready to commit to fighting for it, and ready to commit to explaining to Canadians so they remember and understand what you're really saying. Because the knee-jerk Conservative reaction is going to be to lie and say Ignatieff wants to raise peoples taxes in a recession. Thus, just like in the preceding, you have to be ready to handle the followup question.
gayle
I agree in principle, but I wonder how the carbon tax would have played, had we introduced it during the election? Obviously, in retrospect, it couldn't have been worse, but I did understand the logic in using the summer to "sell". Was it better to have no time to explain, knowing the counters were less developed, or was it better to drop it in advance because of the complexity? I guess we'll never know.
"Was it better to have no time to explain, knowing the counters were less developed, or was it better to drop it in advance because of the complexity?"
Who was dropping it may have something to do with it? Dion was a policy wonk, but weak in political performance. He was going to live and die on the carbon tax as his policy platform and was going to hammer Harper with it like a 2x4.
Iggy is the complete opposite. Exceptional in performance but vague in policy. Having no policy before an election smacks of opportunism. You don't need a Green Shift nor a Chretien Red Book, but something like five priorities like Harper has proposed before the 2006 campaign. Like a cap-and-trade, revival of Kelowna etc. Also a tax increase on the highest income earners, to pay down Harper's debt.
Even though I should probably just cut my losses, I'm going to note that the Democrats are attacking their opponents as we speak for refusing to put forward an alternative.
http://www.youtube.com/watch?v=j5_Wur3JFcg
Mushroom
Yes, but Harper released that just prior to the election didn't he? I expect the same when we get closer.
I agree on the messenger, it was hard because Dion lacked credibility to make it fly. I also think we were very slow in reacting to the initial attacks, very low key and unprepared it seemed. In many respects that concept was really a "hail mary" pass, and that was part of the problem. We'll never know, but it's too bad a solid idea, with real transformative qualities, is now a dirty word.
Jesse
Not sure that fits, given which party was in charge, which party brought the mess in the first place.
One thing that I've found interesting in the last few days is the role reversal. People in the Obama adminstration now using the "fundamentals are sound" rhetoric to argue for future growth, which is strangely similar to McCain, who was roundly mocked as out of touch. I suppose a new party in charge is afforded different latitude, but...
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