A Long Way from Plan B

The best one can say about today’s Economic and Fiscal Update is that it signals some very slight flexibility amid changing circumstances.

The Minister said “We will not be bound by ideology when it comes to making decisions to keep our economy strong and protect Canadians, their financial security and their jobs. We have responded to critical situations with flexibility and pragmatism, and we will continue to do so as situations dictate”.

Plan A – balancing the books by 2014-15 through deep spending cuts – has to be rethought now that growth forecasts for 2011 and 2012 in the last Budget  have been cut by 0.7% of GDP each year

Faced with lower than forecast revenues due to a slowing economy, Flaherty has pushed off by one year his target year for eliminating the deficit. But he still remains committed to the $4 Billion in annual spending cuts to reach that target by 2015-16.

Plan A (slightly revised) carries with it the implication of virtually no new government initiatives in the next Budget to support employment, despite a forecast that the national unemployment rate will average 7.2% in 2012 (and that seems very much on the optimistic side.)

In short,  we are a long, long way from the Plan B we need to deal with the new phase of the crisis.

 

2 comments

  • Okay somebody that blogs in this sight has got to say something today about Steve Gordons article in the economy lab today. Okay, i know i have been hard in him before, but today’s article is ranked at the top of being the worst policy advice i huave ever heard in my life. I am starting to woner, is stephen pushing an anti- intellectual movement? Just amazing what the globe allows published. Again, somebody needs to Sit that guy down and give him a shake. Wow just amazing garbage that comes out of that guy.

  • Wow i cannot believe i just read that article. I think my bigger question is, what is going on with economics these days? You wanna talk about being ahistorically centered. Attention shoppers, we are not a true science, we are a socially constructed, wanna be, culturally gentrified “knowledge” real estate. Bought and paid for by the rich and powerful. Between austerity measures for our ills, and now we all need to dig resources rather than value add, this field is in a real danger of falling off the radar as being relevamt.

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