Friday, March 13, 2009

BC Budget assumptions: nice try

Three weeks ago the BC Budget was released. The basis for the revenue and cost projections for the budget was an average 6.2% unemployment rate in 2009, falling to 6.0% in 2010.

I previously posted on this topic here. For the assumptions in the budget, see this pdf page 87.

How are we doing so far? Well, three weeks after their projection, unemployment has now hit 6.7%--up 0.6% from January. I'll put up the graphs later, but it appears to be going hyperbolic. [UPDATE: here it is! I think my 10% by 2010 prediction is looking likely.]
In short, the $495 million dollar deficit projection has now been blown out of the water.

I'm not clairvoyant here. I just observed that housing starts were going to plummet leading to construction employment to go back to pre-bubble levels. If you do the math, you can see what will hapen to employment. But, I'm sure all we'll hear from the usual economic commentators and our government leaders is another chorus of 'hoocoodanode'.

Enough with the koolaid and the rose coloured glasses! Can we please all open up a can of reality soda and get on with what has to be done?


Vanonymous said...

Shhh. Don't tell anyone until AFTER the election.

Anonymous said...

Hi all,

Here's an interesting one for you.

An analysis of the current economic crisis we are all unfortunately facing but looked at from a slightly different perspective.

This analysis looks at past banking crises and how they have effected various aspects of the economy.

It is titled The Banking Crisis - Where are we now? (follow the link should you be interested) and has particularly interesting points about how the previous banking crises has effected assets including property prices.

Hope you enjoy.

M- said...

"Shhh. Don't tell anyone until AFTER the election."

Heh, wouldn't want the NDP to come into power and ruin our economy, or anything!

mohican said...

Did anyone ever believe the numbers? It is a pre-election budget after all!

jesse said...

Yeah and the Canucks have a shot at winning the Cup. Never let the data come in the way of mental self-preservation.