Economist Stephen Gordon: Battle to slay the budget deficit continues to stall
The steep decline in the 12-month moving sum that was produced by the recession finally turned around in early 2010, but the rebound lasted only a few months. The deficit has been stalled in the $35-billion a year range for the past 8-10 months.
The graph also makes it clear that the trend to deficit began in early 2008, several months before the recession began. The federal government’s decision to cut the GST would have produced a deficit even if the economy had remained stable.