“Canadians know nonsense when they hear it.”

Today on Adler Online, guest host Roy Green (true Conservative Blue pundit extraordinaire) tried to nail down ol’ Flim-Flam Flaherty on his stunning failure to accurately predict Canada’s budget deficit as recently as 4 months ago.

Green - But how do you miss the deficit numbers by as much as you did in such a short period of time?

Flaherty - Oh it’s not... But... But it’s not a significant change.

You got that right. Being off the mark by about 50% is “not a significant change”. Flaherty then proceeds to explain, one more time, just how we are in so much better shape than the US, the UK, Japan, never really answering the question (no surprise there).

So Green tries again.

Green - But Minister … that $50 billion still represents a huge change from what you projected in January. So where I’m going with this is how do you now stick with that $30 billion number for next year?

Flaherty - A large part of it Roy is the auto settlements. I have a pretty good idea what the General Motors arrangement is going to cost. It’s significantly more than was anticipated, so this is a one time, one year payment. It’s not a continuing deficit and it accounts for a good part of the increase in the deficit that I referred to yesterday.

Still no answer except that now we know that apparently the GM deal is going to cost way more than anticipated. Nothing to indicate he has clue one about next year’s fiscal situation, so Green tries one last time.

Green - Minister, what do you say to the Liberals and their finance critic John McCallum’s challenges that you’ve lost all credibility? What do you say to Mr. McCallum?

Flaherty - Well I look for credibility and all I see on the other side is hypocrisy quite frankly. We asked them for their ideas for the budget, they had none. Literally none. Not one idea for the budget. And the only idea that they’ve come up with the budget according to Mr. Ignatieff is that he has a plan to raise taxes. That’s their only idea. None of the opposition parties are saying to the government, please spend less. What they are in fact are saying is spend more, but don’t increase the deficit, which is nonsense. And Canadians know nonsense when they hear it. (emphasis mine)

No answer to the question, but finally something honest from Flaherty’s own lips. “Canadians know nonsense when they hear it.”  Let us hope that Canadians remember this nonsense when it comes time to vote in the next election and turf this ex-ambulance-chaser-cum-financial-wizard. He is an embarrassment. 

Reality bites!

Is this the perfect budget? No, probably not. But the problem is that no one – NO ONE – can define the perfect budget for these times. This budget, much as I hate to admit it, stands just as good a chance of success in helping Canadians and Canada’s economy as any other – whether it’s put together by the Liberals, the NDP, the Bloc or the Green Party. And let’s be honest here, any alternative budget by any other party would only be remarkable in its similarity to Flaherty’s latest effort. (After all, the right wing media and blogosphere isn’t screaming about Budget 2009 because it’s too “Conservative”.)

And as for all the whinging, wailing and gnashing of teeth in the progressive blogosphere, the Liberal Party is well aware that its constituency extends far beyond the realm of the politically polarized who occupy these pages. The general Canadian population will see this budget as a pragmatic response to difficult times and expect their MPs (all MPs) to get on board and make this work. To simply vote non-confidence on principle and thereby trigger an election (for it surely would) would be viewed as crass political opportunism to be subsequently, and severely, punished at the polls.

So I have to agree with Ignatieff on this one. To bring the government down over this and leave Canada’s economy in this current holding pattern for several more months while we go through an election would simply be irresponsible, both to those Canadians who desperately need some help now, and to Liberal fortunes which would be seriously damaged (again) by forcing an election at this time.

It sucks, but deal with it.

Damning with faint praise

As reported here (Report on Business), Dale Orr of IHS Global Insight Canada says Jim Flaherty "is certainly the best person in the Conservative cabinet to be the finance minister."

But wait, before we hang up that particular banner, what does the rest of the article say?

"Mr. Flaherty and the Conservatives should have taken better precautions against a deficit, noting they cut some rainy-day cushions and drove program spending up 13.8 per cent in their first two years."

"...he went too far in partisan attacks on Ontario's Liberal government and suggested Canada's most populous province was the "last place to invest" for business."

"...hard to find an economist who supports the Conservatives' decision to forgo $11-billion of annual revenue and cut the goods and services tax by two points..."

"It will also be the first time Ottawa has slid into the red from a surplus since 1970-1971."

"saw him fumble the relationship with Bay Street over a bid to end the tax deductibility of interest from foreign expansions, and underperform in selling a controversial equalization deal to Nova Scotia and Newfoundland."

"...he was removed from steering roles on two key agenda-setting cabinet committees."

And he's the "best person in the Conservative cabinet" to get us through this mess? We are in deep trouble my friends.

The Party

I was re-watching Peter Sellers' The Party last night (one of my favourite Peter Sellers flicks)and it occured to me that the opening bugle scene is a perfect metaphor for the health of my pension fund over the past 10 years or so. First it struggled through the the tech meltdown in 2000. Just when it was starting to recover from that, 9/11 hit. Got through that, painfully. Then it was nuked by Flim-Flam Flaherty's Income Trust backtracking. Nearly recovered from that just in time for the sub-prime fiasco. And now the market meltdown with its daily swings - usually 10% down but only 5% up. Being a good little investor I still follow my broker's guidance to hang in there, but the repeated blows are taking a heavy toll and I'm beginning to feel a little a lot like Sellers' character in that opening scene.

Regardless, The Party is a classic and, all metaphors aside, good escape for 90 minutes or so from all the goings on in the real world where, unfortunately, you can't just jump up and wash out the fake blood stains.

The $25 Billion Not-a-Bailout Bailout

This is a simple question and I pose it because I really don't know the answer.

Where, exactly, is the $25 billion coming from that Flaherty is going to use to buy these mortgages? That's not exactly petty cash, and I don't imagine the Cons account balance at the TD Bank has that many zeroes attached to it, so where is it coming from? Are they simply going to print more money? Borrow it (increasing the national debt)? Go into deficit by tapping into operating expenses?

Somehow, somewhere, Flaherty is coming up with $25 billion and I'd like to know how they are going to do it. Perhaps I can use the same technique to replenish my RRSP after the thrashing it took in the past few weeks.