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The probability of deficit

While the finance minister from the party that has not left office with a budget surplus in over a century accuses the Liberal party of wanting a deficit, I have to ask: has Minister Flaherty got us back in the hole? There is some evidence to suggest that this may already be the case.

In October, the treasury posted a $2.7 billion deficit, down from a $500 million surplus the previous October, which means Flaherty has already given us a real, actual deficit, just not an annual one.

The month of November showed a meager $100 million surplus. Take out the $6 billion a year, or a $500 million/month revenue loss from cutting the GST another point this past January 1st, and you have a recipe for a serious and ongoing deficit.

For the party that has not on its own given us a budget surplus since before the First World War, saying that the Liberals would put us in deficit while the Conservatives have already given us one in October, and are on track to give us one that they would not likely admit to in tonight's budget, is more than a little bit rich. Especially given Jim Flaherty's track record of giving us a deficit of over $5 billion in Ontario.

The federal government may already be cooking the books. There is some suggestion that the federal government is selling Crown office space and leasing it back, feeding the sale money back into our federal numbers. Liquidating federal assets is one way of going into deficit without borrowing any money.

The likelihood that we are back in deficit is, in my estimation, extremely high.

Posted at 10:24 on February 26, 2008

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