WTF? Economics

If the Conservative Party of Canada could only get its story straight:

Stephen Harper has delivered his bleakest forecast yet for the Canadian economy, warning yesterday the future is increasingly hard to read and conceding the possibility of a depression.

“The truth is, I’ve never seen such uncertainty in terms of looking forward to the future,” the Prime Minister told CTV News in Halifax.

“I’m very worried about the Canadian economy.”

When asked whether a depression might be possible, he answered:

“It could be, but I think we’ve learned enough about depression; we’ve learned enough from the 1930s to avoid some of the mistakes that caused a recession in 1929 to become a depression in the 1930s.”

A recession is often defined as two consecutive quarters of shrinking economic output.

The definition of a depression is less established, but is considered to be a prolonged recession where output declines by more than 10 per cent.

Mr. Harper also confirmed in the interview that his January budget will push Canada into a deficit and include billions of dollars in spending, which he hopes to combine with provincial spending to boost the Canadian economy.

“Obviously, we’re going to have to run a deficit,” he said. “We’re talking about spending billions of dollars that was not planned.”

Mr. Harper’s darker forecast was yet another shift in tone for the government on the economic story. Last Friday, for example, his ministers appeared to deliver contradictory messages on the speed with which the government should be reacting to the crisis.

Hours before Industry Minister Tony Clement called a hasty Toronto news conference to buck up the Ontario auto industry, the message emerging from Finance Minister Jim Flaherty was a plea to be patient with the Harper government as it planned a stimulus package.

“This is not a sprint,” Mr. Flaherty told an audience in Saint John, preaching the virtues of “thoughtful consideration” before acting with stimulus.

Later that day, however, Mr. Clement, signalled that Ottawa was indeed moving quickly to help out auto makers, announcing the general outlines of a package that could lead to $3.4-billion in Canadian aid.

“The seriousness of the situation dictates that we be here this evening,” Mr. Clement said of his last-minute appearance.

See the rest at the Globe & Mail

It is a sprint that’s required.  See posts below.

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