So it turns out that yesterday the numbers delivered to us regarding the Government of Canada's spending were in true Chretien-esque underdelivered fashion. It's not going to be a $40B deficit -- it's going to be a $50B deficit. Why?
[A] triple whammy of extra costs, including auto-sector bailouts, rising Employment Insurance claims and a drop-off in tax revenue.
Hmmm, a drop-off in tax revenue...drop off in tax revenue. Oh that's right, against the sound advice of numerous economists and the Liberals, the Conservatives felt it would be a wise idea to drop the GST by 2%. In their unceasing quest to do optical politics that look nice but actually cause great harm, the Tories cut Ottawa's revenue stream by billions of dollars so that a double-double at Tim Horton's would cost 3 pennies less. A few months ago, when it was projected that the Conservatives would only lead us into $80B of red ink over 5 years, it was calculated that their ill-advised tax cut actually took away pretty close to that exact amount. Obviously things have changed--for the worse--in the past few months, but all of a sudden those extra pennies look mighty useful come budget time don't they?
And it looks as though people are getting the idea in their heads that the Tories' credibility deficit is the only thing that exceeds the fiscal deficit: