Harper calls U.S. deficit "dangerous"

Mon Jun 15, 2009 5:03pm EDT
 
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OTTAWA (Reuters) - Prime Minister Stephen Harper called the U.S. deficit "dangerous" on Monday and said it would eventually require tax increases -- a path he said his Conservative government would avoid.

Harper was responding in Parliament on Monday to a question from the opposition Liberals on the need for more transparency in stimulus spending and a suggestion that Harper copy the Obama administration and publish spending details online.

Harper replied: "The Liberal Party cites the United States as their fiscal model ... In the United States the deficit is running at four times the size of our deficit. It is a dangerous, long-term structural deficit that existed even before the recession began, one that will require tax increases eventually."

"That's not a direction we want to go," he said.

The U.S. Treasury declined to comment on Harper's remarks.

A recession in Canada, the worst since the early 1990s, has forced Harper to break with a decade-long string of budget surpluses. This has exposed him to complaints of economic mismanagement by the opposition parties, which hold a majority of seats in Parliament. After a previous Liberal government painstakingly fought back budget shortfalls in the 1990s, deficits have become political taboo in the country.

Harper said last Thursday his government is set to post a record high deficit of C$50.2 billion this year but promised to balance the books again in 2013-14. Harper has repeatedly said Canada's deficit is short-term and not structural.

The White House forecast last month the U.S. deficit for fiscal 2009 would swell to $1.84 trillion, more than four times the then-record $455 billion deficit for fiscal 2008.

U.S. President Barack Obama has been eager to assure investors that the country has the ability to pay down its debts and will not live beyond its means forever.

(Reporting by Louise Egan; Editing by Frank McGurty)

 
<p>Prime Minister Stephen Harper speaks during a news conference in Ottawa June 15, 2009. REUTERS/Chris Wattie</p>