25 July 2008

Harper Government Delivers $517 Million Deficit

Is anyone surprised at this, that the Harper government created a $517 million deficit in April and May?

I can see the strategy now, just as happened in the Mulroney days.

The "fiscally conservative" Cons reduce taxes, especially for Conservative-friendly populations, then spend the tax dollars they have left - and more, thus digging a hole - to buy more votes. By which time, they've created a deficit, added to the national debt and Canadians realize that they need the Liberals back in to fix the damage.

Then, once the Liberals are back in power the Cons, alongside the Bloq and NDP (the Cons' friends whether or not they're in power), rail against the Government's stringency and demand more spending on typically non-Conservative friendly populations.

In other words, creating a deficit and running up the debt is, contrary to all logic at least for the short-term, Conservative strategy. In the long term, it can work and stands a better chance of delivering them a majority - that is, unless Canadians wake up to what they're doing.

Over the same time period last year, the government ran a $2.8 billion surplus.

The federal finance department said Friday that during this April and May revenues declined by $1.6 billion, or 4.1 per cent...

GST revenues dropped by $1 billion, or 20.9 per cent, partly as a result of the one percentage point reduction in the GST rate, which was effective Jan. 1, 2008 [while] spending on programs rose by $2.1 billion, or seven per cent...

"The monthly profile of growth in spending will initially be quite high but by mid-year will moderate considerably, consistent with the 3.4 per cent annual growth projected in budget 2008," said the finance department forecast.

Regarding that projection, isn't that a bit overblown?

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