Might Balance Budget by 2015
Jim Flaherty (Canadian Federal Finance Minister, and the man who spins the Financial Blarney for the Feds) started the Financial Waffling section of the Government End of Year reports, when he said that the plan to have a Balanced Federal Budget for 2015 May or May not succeed. He then went on to say that they may even be able to balance the budget earlier, but they are not sure.
Would you like blueberry syrup on that waffle?
If I had to go to a bank or bankruptcy agent and had such a wishy-washy plan I’d be laughed right out the door, but let us be fair, Canada’s economy is in a very unsure setting right now. There are more jobs, but those were part-time jobs, interest rates are low however inflation is starting to rise, and the Government can’t easily introduce any new big tax for fear of toppling the whole house of cards.
All the talk of government cut backs is fine, but the only way that governments have managed to balance their budgets is by increasing their income (or by off loading costs to other government levels). If Canadians remain unemployed, or with lower incomes, the major source of income for the government (i.e. taxes) will remain at lower levels.
Government cuts are fine and dandy, and many claims can be made, however, cuts in spending are usually on the backs of those who can’t afford to lose services, and are very unpopular generally, so any alleged austerity measures I think are simply smoke and mirrors to mask the fact that the Government needs more income!
Remember it was not that long ago that Canada was actually paying it’s debt down, and was running surpluses, so it just shows how fragile government income levels are, and that all governments can find ways to over-spend quickly, if they are in a surplus situation (my opinion is that it was a combination of both that destroyed all surpluses).
Maybe the government can start buying lottery tickets?
My other guess (opinion) is this is another piece of financial slight of hand by the Finance Minister to then deliver a balanced budget earlier and give himself whiplash by patting himself on the back so vociferously. If Canadian jobs can recover, and inflation can stay down for a while longer (thus keeping interest rates down), Canada may be able to balance their books soon, but given how sick the U.S. economy is currently, that may be only a pipe dream.