What's behind the HST?

Since 2005 Ottawa has increased program spending at twice the rate of inflation. Even before the wheels came off the economy last fall, federal spending had hit the highest point ever, under Stephen Harper. Despite pledging in the last election he would not allow an annual deficit, it’s now going to be at least $50 billion (a record), and will take years to reduce.

The Parliamentary budget officer estimates at least $200 billion will be added to the national debt. That debt is financed mostly by bonds. When the government is forced to flood the marketplace with new bond issues, it competes for capital, and forces mortgage rates up. That interest on $600 billion debt is tax money, transferred from your income to the pocket of investors. It doesn’t buy a single new MRI machine, fund a school or fill a senior’s prescription.

Thanks Garth Turner.

So much for no deficit, eh Stevie?

After campaigning last fall on a 'no deficit' platform, the Harper government announces something quite different.

The federal deficit will soar to more than $50 billion this fiscal year, setting a dubious record far eclipsing the bad old deficit days of the early 1990s.
Finance Minister Jim Flaherty announced Tuesday that the government's shortfall will be more than $16 billion higher in 2009-2010 than he forecast in January's budget.
"We will run a substantial short-term deficit this year which I would estimate at more than $50 billion," Flaherty said.

Read the story here.

Harper's options for continued residence at 24 Sussex.

Interesting times in Canadian federal politics. Unless something dramatic occurs over the next 5 or 6 days - and drama is a distinct possibility - Canada will have it's first coalition government in over 50 years and Stephane Dion will become Prime Minister.

Read the details of Harper's 10 options to avoid this.

Have we learned nothing from our neighbour's experience?

Canada's Minster of Finance is in the mood to privatize, in order to stave off a deficit or recession. Read here.

Hard times if these forecasts play out.

America, and Americans face a stark decision - and a choice that must be made now. Not next month at the polls, not next week. Today.

We now sit literally days away, with a high probability, of a credit market "dislocation" that will change American finance and decimate the stock market. That is, worse - far worse - than what has happened thus far.

Try on for size 2-3,000 points down on the Dow from here. 25% more than has been lost thus far, more-or-less "all at once." The probability of this event is now in excess of 70% - within the next few days to two weeks.

Read the engaging piece here, in its entirety.

More grim news from financial sectors.

If you want a feel good story, do not read this. The closing lines are:

If you did not know it before, you do now. The entire US banking system is insolvent.

Visit here for the how & why.