PM Harper defends deficit with intelligence and confidence

Last night on Global TV's Focus Ontario was a one-on-one interview with Prime Minister Stephen Harper discussing the imminent budget, as well as deficit spending and the coalition. The interviewer, Sean Mallen, was very balanced in asking his questions, which though some were difficult, I felt needed to be asked.

In his responses, Harper indicated that the budget will address immediate economic concerns in Canada, mainly though shovel-ready infrastructure projects, in conjunction with provincial and municipal governments. As well, some permanent - but modest - tax cuts will be brought forward. Other limited investments will be put in place to help stimulate certain industries, as certain media reports had already leaked.

The limited nature of most of these initiatives is what supports the notion of a "temporary deficit" Harper emphasized. While some of these investments can be extended through Parliament votes if judged necessary, most of these will expire within one or two years. With this positioning, Harper can confidently say that the government's balance sheets will return to black after this time.

Harper did not seem worried about deficit spending, which leaks have reported will ramp up to $64 billion over the next two fiscal years. When confronted to previous statements made as leader of the Canadian Alliance, radically opposing deficit spending, Harper explained that at the time of his protest the Canadian economy was strong and that nothing explained or warranted these deficits.

Today, he argues, since confidence has been shattered across the board it is an appropriate time, one of the only times when deficit spending has its place. Harper explains that while investors hold off from making trades in the market and individuals save more rather than spend, the general slowdown makes a lot of money sit still, unused. By having the government borrow this money at low interest rates, and injecting it into the economy rather than have it remain frozen, we can see the economic cycle pick up speed and return to normal sooner.

Harper notes that this commitment to "economic stimulus" and subsequent deficit spending is an engagement made to the international community following a recent G20 meeting on the economy. There, world leaders committed to taking all actions necessary to prop up their respective economies.

My general observation on this interview is that Harper sounded great, and looked very comfortable explaining the situation. His approach was meant to clarify the situation, not dodge any of the facts, standing up for his decisions. I felt proud watching him speak.

Following the interview, host Sean Mallen sat with two reporters, Global National's Peter Harris and the National Post's Don Martin. While Mallen and Harris demonstrated analytical insight but remained neutral, needless to say that Martin was completely out of line with some of his comments.

He notably said that Harper laid "awake a night trying to find ways to kill Liberals," and was general unforgiving of Harper and the deficit. He seemed frustrated, even displeased, perhaps because the Prime Minister had shown such grace and smarts in responding to the interview. Peter Harris pointed out that Harper had said all the right things.

I can't say I am surprised by Martin's words, though it is always shocking to hear such antagonistic reproaches when the overall tone of the broadcast was so neutral.

UPDATE: Here is a link to the interview.