Our position in this election is we're not going to run deficits Stephen Harper, October 7 2008

During the recent federal election I posted a detailed analysis of federal government finances comparing this fiscal year to all years prior this decade. In addition to discovering that the federal government already had been running an operational deficit of between 13 and 23 billion dollars, and that such a deficit was virtually unheard of during this decade, I also observed Harper and Flaherty dancing around the issue as the election ground on:

Stephen Harper has repeatedly claimed his management is one of prudence, that his government is running a surplus, and on Tuesday he specifically said his government would not run a deficit (Reuters, Oct. 7 2008), after having danced around that issue of late (Calgary Herald, Oct. 6 2008).

Now the election is over, the hidden agenda, or hidden deficit, has come out of its cave:

• Harper mulls running deficit to stimulate economy, as G20 summit ends (Sheldon Alberts, Canwest News, November 15 2008)
• Expect deficit, Tories warn (The Gazette, Canwest News, November 19 2008)
• Flaherty to Stay as Canada Finance Minister, Hints at Deficit (Bloomberg, October 29, 2008)

Today Parliament's independent Budget Officer cites certain Conservative government policies as fundamental causes underlying the impending federal deficit Harper and Flaherty now say is inevitable, even though just a few short weeks ago during the election they claimed would never, ever, happen.

• Tories blamed for coming deficits: GST cut, spending driving Canada into red, Budget officer Kevin Page warns (David Akin, Canwest News, November 20 2008)
• Ottawa's '09 deficit may hit $14B (Les Whittington, The Star)
• Policies, not crisis seen causing Canada deficit (Louise Egan, Reuters, November 20, 2008)

We could be looking at a bugetary deficit of as much as 14 billion dollars. Kevin Page, Parliamentary Budget Officer, November 20, 2008

The report straight from the horse's mouth: Economic and Fiscal Assessment (Parliamentary Budget Office, Ottawa, Canada, November 20, 2008 - www.parl.gc.ca/pbo-dpb)

As the Harper government has been known to "disappear" documents, and parliamentary officers, it doesn't like, I've attached the above noted assessment to this post for future research purposes.

That Wall Street has gone down because of this is justice. They built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience. Steve Eisman

On a day when the Toronto Stock Exchange TSX Index hits a four year low, and the U.S. market's S&p 500 index hits a five year low, might I recommend this fascinating and approachable (if occasionally technical) article as one of the best insider stories on the root causes of the meltdown that I've come across to date - from Condé Nast's Portfolio.com:

The End, by Michael Lewis, November 11 2008

The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches, and sell off the pieces?

At some point, I gave up waiting for the end. There was no scandal or reversal, I assumed, that could sink the system.

Then came Meredith Whitney with news.