Cold as ice

The proposed Liberal - NDP coalition isn't so much dead for now as it is on ice.

Michael Ignatieff appears serious about putting Stephen Harper on probation and wanting to see results from the so-called "stimulus" package in yesterday's budget. But it's still disappointing for me, as a Liberal, to give Harper even another week to prove himself worthy as Prime Minister. Harper is not worthy period, and Ignatieff needs to realize that.

The option of a constructive vote of no confidence (CVNC) -- that is, no confidence with a viable alternative government immediately available to take over -- must remain as an option and should be exercised as soon as possible if Harper won't talk deal. It's not that common in British parliamentary tradition but it does exist in countries with Parliaments instead of a Congress.

In fact, at least three EU members -- Germany, Hungary and Spain -- require an alternative government be ready to go before a CVNC is allowed. The most famous recent example was in 1982 when Socialist Helmut Schmidt was dumped for Christian Democrat Helmut Kohl after Hans Dietrich Genscher, who led the centrist Free Democrats, dropped one coalition for another. The main issue was the economy and Schmidt's mishandling of the recession.

Harper, in his minority situation, has turned a golden egg into one you can just crack and put in the microwave. There's no better time than now to get rid of him or to exercise the CVNC -- give him longer than a month or so, and when a simple no-confidence vote comes, the GG will call for a snap election which could be just as indecisive as the last one. We need that like a shot in the head.

The fact is, as has been the case around the world, so-called right wing governments aren't responsible when it comes to finances. They blow budget surpluses when times are good then start to bail water when times get rough. It's been centrist and leftist governments that have shown prudence, even if their priorities haven't always been the best ones. (Sponsorgate still rankles for me, just so you know.)

Our debt to GDP ratio is substantially less than it was in 1995, when Paul Martin started to tighten the belt and put some semblance of discipline. With reasonable growth prospects as things start to turn around -- and I am not nearly as pessimistic as some forecasters -- we can keep growth in debt below growth in the economy so in fact our interest burden continues dropping.

But the whole idea behind running surpluses, and having surpluses as big as possible (or at least containing deficits to below GDP growth), is to pay down debt to prepare for a rainy day situation. From each tax dollar, about 14 cents goes towards interest on the debt (at one point in the early 1990s it was about 33 cents). Not bad, but it would have been better if we only had to pay 10 cents and better still if it was less than that (meaning the end of foreign borrowings).

In the States, the interest bite was about 20 cents -- in 2006, before things started to slide. They're up to around 25 or 26 right now. And as they slide further, people will flee the dollar (which will impact our currency as well since we're so reliant on the US for exports) and flock to the Euro -- and despite its problems the Eurozone as a collectivity is actually better prepared for this crisis than the US was.

No wonder both the Liberals and Conservatives stocked up on Euros here as a buffer -- who can blame them? Or why we're now pursuing a comprehensive trade agreement with the EU even in these tough times.

We were getting close to freeing ourselves from the evils of sovereign wealth funds once and for all. Now, we're trapped again. Forget the anemic changes to EI rules, or the ongoing screwjob on equalization and transfer payments. Being further indebted to terrorists and communist governments that support genocide, is enough reason for Iggy to pull the plug, in my humble opinion.

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