
I know it has been said numerous times by numerous people but I'll say it again: Somebody, anybody, please get Peter Mansbridge a chair. Watching him run around the set as he anchored today's budget coverage on CBC was exhausting for the viewer. There are days when I wish watching TV wasn't so much work. Sigh... anyway. (we joke, we jest, but on the inside, we cry) Moving on....
Some things to consider before diving into my little analysts of the budget. I am no economist. That's not an admission of complete ignorance when it comes to these matters. I do know that Canada is currently in a $56 Billion deficit. This is the largest such financial hole we've ever been in. While the economic downfall took hold when the housing bubble in the US went kaboom, we can't ignore that we are in an major time of change. We're undergoing a huge shift in how business works and the internet is the major reason for this. With that in mind let's take a look at what finance minister Jim Flaherty (Aka Fred Flintstone) put forth during his speech:
The bottom line of the budget appears to be that deficit can be eliminated in 5-6 years. How is this going to happen? Taxes are not going up. The bulk of the savings will come from freezing and even reigning in spending. It appears to be that Flaherty is banking on a private sector rebound to help make-up the bulk of the losses. Stimulus spending will come to an end in 2011 and that is supposed to cut the deficit by a large amount on its own. This is a timid budget that's putting too much faith in a private sector recovery. While most so-called 'economists' say that this is a fairly likely to happen, I think they are making a huge oversight. They are overlooking the cause of a large amount of whatever recovery that Canada has see thus far. We're heading for a housing bubble.
While job numbers are fairly terrible in Canada, consumers have been taking advantage of a low interest rate and have been buying over-priced mortgages on houses that they can't really afford. We've seen this before south of the border. The fallout from a housing crash could cripple this country and bring us down to our knees. The Bank of Canada is going to have to raise interest rates at some point. This could lead to a messy situation.
I think the real problem here is the state of mind of the Canadian people. This budget screams out "Election". Apparently, according to Liberal leader Michael Ignatieff, Canadians don't want an election. This is an insane idea and the Conservatives are taking advantage of it. We currently have a minority government. We are in this situation because the 'average Canadian' doesn't have any idea of what's happening with their politicians and can't come to a consensus on who should run this country. When a minority government puts out a budget that all the opposition parties don't want to support, then we must have an election. That's what should happen, and while the Liberals don't support the budget, they are not going to vote against it in order to avoid an election. This is not how our democracy works.
Canadians have to wake up and start paying attention. While they are soothed by the constant cry of "we're doing better than any other country in the world" they have to understand that only means we have a longer way to fall. The Conservative plan of cuts to public service and to limit the roll of government is risky business. Canadians are going to see things slowly dry up. The Conservatives are going to bleed this country until we are nothing. The private sector has such a tight control over Harper's outlook that we're left with a budget that says "well things are bound to get better, we hope". The private sector is supposedly going to lead us to glory but public services are going to have to be cut to help them along. Take into account that the 'free market' has not only been the cause of all this economic turmoil, but it continues to fail to take into account how the internet will affect their futures.
Sure, the rest of the G7 might look at Canada in envy, but I maintain that we are on surprisingly shaky ground. We're sitting on the edge of a cliff. The budget doesn't push us over the edge, but it doesn't do anything to pull us back from the precipice. We might not be quite at the point of free-fall, but I can't help but believe we are on the verge of some dark times.
I'll leave you with a sobering
news article from over a year ago. Let's not make the same mistakes.