McGuinty on side with reality too

Last week in this spot, we praised Prime Minister Stephen Harper, his Conservative colleagues and their Liberal opposition for accurately reading economic conditions in this country.

And we're happy to see that Premier Dalton McGuinty is on something of the same wave length.

The premier was quoted on the front page of last Wednesday's Toronto Star as warning Ontarians there are dire times ahead.

We enjoy reading such predictions as much as any of you: Not at all. But we also have to accept the reality of our situation, as economies all over the world go into the tank.

And we are optimistic that the situation is going to correct itself in due course, with some form of economic recovery in the future.

When will that be? Obviously we can't say. Like everyone else, we hope it will be sooner rather than later.

We agree it's hard to be optimistic, considering the reports we received Friday that some 129,000 jobs were lost in Canada in January, combined with news this was the largest decline in the employment picture in 30 years. On the other hand, the markets responded to such bad news by surging ahead Friday. The S&P/TSX composite index closed almost 150 points ahead, closing out a fairly positive week. It's possible that could be a sign that the worst is over, although we can't discount the chance that we are indulging in wishful thinking.

No matter, there is pain out there right now, and there is likely to be more until we see real and definite improvement.

Hence, we believe, the premier's warnings of last week.

The Star story last Wednesday talked of budget deficits, and did not rule out the possibility of the return of what was once commonly referred to as "Rae Days." We should point out that local MPPs stated they understood Finance Minister Dwight Duncan has all but ruled them out, although any mind can change, including one that's in authority. And that's not to say there was anything particularly wrong with Rae Days. People in the public sector had some of their hours cut back in the recession of the early '90s, and their pay cheques were reduced accordingly. Some of these people didn't like that, but we contend they would have liked it a whole lot less had their pay cheques been eliminated entirely, as was the case for a lot of private sector workers in those days (these days too).

The possibility of the provincial government running a deficit is not a lot of fun to consider either. A government deficit, after all, is nothing more than a tax that we're all going to have to pay eventually. But the positive part of that is with a deficit, we get the chance to pay the extra tax in better times, when it's easier to afford.

These economic times call for realism. We believe the federal government has embraced that notion. It looks like the provincial government is about to as well. We'll know for sure when Duncan brings down his next budget (no word yet on when that will be).

And it looks like maybe the markets realize that governments have accepted reality. That may turn out to be the best news of all.