Wednesday, October 1, 2008

 

CRUCIAL DEBATE? THAT'S DEBATABLE!

Make no mistake this Federal election is pretty much over for the Liberal Party of Canada. When the ashes of the October 14th polling have cooled, all that will be left to determine is whether that grand old party remains the Official Opposition.

The media has made much of what it says is a "political high-wire" act for much of this week. The reality is most of the political sniping has been meant to create not much more than a dramatic backdrop for the four wannabee champions of the Canadian electorate and leaders of the anti-Conservative, anti-Harper forces; to wit: Mr. Dion, Mr. Layton, Mr. Duceppe and Ms May.

Mind you we wouldn't be into this election but for the fact that Mr. Harper's party in the two-and-half years since it was elected, minority or not, managed to squander a $12-billion annual surplus left in the government's coffers. Although perhaps at first glance popular, measures such the 2-point drop in the GST amount to a "hill o' beans" for the average consumer...but a drop of about $20-billion a year in Government revenues. How foolish! There: Is an example in fact a of "political high-wire" act. Balancing an Economist's education, and wanting to be Prime-Minister.

IT'S IN THE ECONOMY STUPID: Mr. Harper may still profess John McCain's mantra that the "fundamentals of the (Canadian) economy are sound". But, it was the gathering storm clouds of the American "sub-prime mortgage" melt-down more than a year ago that set into motion the Federal Election we are now more than midway through.

Through last winter and early spring when Mr. Harper's efforts to goad the opposition into forcing an election failed...and in the gathering evidence of America's financial collapse, the Prime Minister was forced to bail on his own election reforms and force an early election, despite his repeated claims that he would govern to the end of the mandate, in November 2009.

As Paul Berton comments in today's "Sun" newspapers, the catastrophe at hand is that although..."ordinary Canadians don't have the economic background of Harper, or the alleged brain trust of Bush and McCain...we aren't stupid. We know the biggest 'fundamental' of the Canadian economy is the American shopper."

We are in the middle of an election because Canada's economy is in deep trouble which worsens by the hour. Berton says..."household debt is high, manufacturing has been decimated, many jobs have been lost and others are threatened, and we know even booming Alberta, especially the oil sands, is vulnerable to drowning in the waves emanating from Wall Street."

The United States is in a deep recession and it's economy isn't likely to show any decent signs of recovery perhaps for as much as a year or beyond. Canada teeters and is about to be pushed-over into its own recession. In about 30 months of governing the Conservatives have managed to lay the cupboard bare of any comforting surplus. The ground work for what's coming next is already being laid-out, hours before the country's leaders mount the stage of Ottawa's National Arts Centre for the hostile environment of the French (tonight) and English (tomorrow) debates.

On the trail leading to this week's debates, Mr. Harper's opponents have accused him of mismanaging the economy. I fear now that to reverse the course, the country will once again be plunged into deficit financing. In fact the chief economist at the Royal Bank, Craig Wright, wonders what's wrong with a deficit? He says avoiding a deficit at all costs could do more harm to the economy than good. Others apparently agree...and the cycle of deficit financing is set to resume.

Politicians who operate in a bubble are destined to repeat the mistakes of the past. Canada's largest ever deficits and its mushrooming national debt reached their apogee at the helm of the Mulroney Conservatives 15 years ago. Let's hope we are not heading down that road once again. The costs are simply too high!

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