Tuesday, January 13, 2015

Counting On Oil

Falling oil prices should stimulate the world's faltering economy. But they won't do the Harper government a lot of good. That's because the Harperites have nailed their political flag to eliminating the deficit. And that has become more difficult than they anticipated. Scott Clark and Peter DeVries write:

In other words, cheaper oil will have a net positive effect on real economic growth in the oil-consuming provinces and on their budget balances — but it will have the reverse effect in the oil-producing provinces and in Mr. Oliver’s department.

That growth forecast of 3.7 per cent for nominal GDP already included a downward adjustment for lower oil prices and an additional ‘risk adjustment’ factor — which, according to Finance, together lowered budgetary revenues by $5.5 billion in 2015-16. The drop in oil prices has burned up all of this fiscal ‘slack’ in the deficit forecast. In other words, the collapse of a single commodity has completely undermined the government’s commitment to a balanced budget in 2015-16.

Count on it: Nominal GDP growth of only 2.5 per cent for 2015 means, in the absence of any offsetting cuts or other policy actions, a deficit in 2015-16.

We won't know what the real numbers are until after the election. So you can also count on Mr. Harper selling the same old snake oil. But, remember, he didn't see the Great Recession coming, either.

The Prime Minister has always been a one trick pony. He has always counted on oil to bring Canada prosperity. And, after nine years, it's painfully obvious that he can't count very well.


mogs moglio said...

Harper can not only not count but he cannot add or subtract.

He does not know how to follow the 'letter' of the law because he refuses.

I love it Owen that his ill planed agenda is blowing up in his face.

What now more "terrorists storming parliament" to boost his sagging ratings?

Owen Gray said...

He intends to play the fear card, Mogs. You can count on it.

Steve said...

I do not uderstand why the so called oppostition is not at least shaping the battlefield on this issue.

Harper pursed a energy superpower 18th century economy. The result was a high dollar that killed manufacturing leaving our economy with all its eggs in a tar sand basket. The problem is you can not switch on and off manufacturing like you can oil.

Now the chickens come home to roost and Harper is exposed. Shine more light on this fearless leaders.

Owen Gray said...

Harper has made a classic error, Steve. Good economies are diversified economies.

His blunder has been colossal.

Rural said...

Having just now started researching the o7 / 08 period for my Harper History series I came across this quote from our economic genius "Oct. 10, 2008: This country will not go into recession next year and will lead the G7 countries."
What more needs to be said?

Owen Gray said...

There it is, Rural. He has been so preposterously and consistently wrong. The country needs to be reminded of how wrong Harper has been.

Toby said...

Owen Gray said..., "The country needs to be reminded of how wrong Harper has been."

Exactly. So, how do we do that? Efforts such as yours and mine and so many who post here seem to fall on deaf ears. The opposition would rather squabble amongst themselves and the masses are too busy with trivia.

Owen Gray said...

Unfortunately, that's quite true, Toby. It will take a coalition to defeat Harper. That coalition has to be both political and civic.

Unless citizens push the opposition parties to send Harper packing, he will be around for another four years.

Kirby Evans said...

If only people understood the fairly simple fact that Conservatives (and the rich in general) don't really want overall prosperity in our society but only enough prosperity to make them rich and able to wield power over the rest of society, then these things will make sense. It is not that Harper ever wanted the Canadian economy to be wealthy from oil (or any other source) per se. What he wants is a government with very little revenue and an economy with very narrow possibilities. This way the governments of the future can't increase social spending and the vast majority of wealth and power will stay in very few hands.

Owen Gray said...

Quite true, Kirby. Harper was born too late.

He'd much prefer a feudal system, where power was concentrated in the hands of an oligarchy, the vast majority of the population were serfs -- and there was no such thing as Magna Charta.

Anonymous said...

The opposition have done nothing about Harper and that means, there is evil afoot.

Harper lied when he said, he was requested to play a role in this war with ISIS. Obama said, he did no such thing. Harper was such an abysmal failure in Wales. Harper pushed his way into this war, to try and redeem himself.

Harper is a very behind our backs sort of person. His FIPA deal with China, was so secret? He met China in Russia to set up his dastardly deed with China.

I wondered what Harper would do behind our backs, this x-mas break? Harper is every bit as hateful as, the dictators of the 30's and 40's So, we need to watch our backs.

Owen Gray said...

Indeed, Anon. We need to watch our backs.