So Jim Flaherty has had to retreat from his aggressive debt payment plans, due to the Canadian economy being sluggish (OK downright comatose). The goal of a balanced budget by 2014 is now not possible in Minister Flaherty’s point of view, Â and he now thinks that 2015 may be a more achievable goal.
Financial pundits are lampooning this statement, and of course the Political Wags are all having a field day claiming the Tories are not keeping their promises (as the Tories would do if the Liberals were in power, and the reverse was true).
The Canadian Economy is in a shambles? The Government’s programs are driving the country into the ground? Canada is teetering on an economic precipice? None of that is likely (although who knows these days), it is the entire global economy that is causing markets worldwide to be ludicrously unstable, and thus causing all economies to be in a right mucked up state (that is an actual economic term that John Kenneth Galbraith used to use).
All this instability is causing companies to cut back on spending, and folks are starting to lose jobs (again), which of course is cutting the government’s income base (unemployed people pay a lot less (if not no) taxes, the major income base for the governments). Less folks working, less income, less income, fewer programs, without spending cuts, deficit financing must come into place, and we are back where we were in 2008. Yes, a hugely over simplified explanation, but it does sum it up (in my opinion).
I actually respect Mr. Flaherty for being honest enough to say that the Government was being too aggressive in their goals and they must rethink and change their plans (like we all should do, should problems arise, we must sometime change our plans to reflect the new reality we live in). Am I disappointed that the Government can’t get back to a balanced budget, yes, but there is really not much to be done about it (other than shutting down a lot of government programs, which sounds like a great idea, until you see who might be affected (or is it effected) by these cuts).
Is Mr. Flaherty to blame here? I don’t think so, but what do you think?