TAKE TWO: A chastened Harper government laid out the broad strokes of its economic recovery program in the Throne Speech
that reopened Parliament. Just weeks after saying Canada would escape a
recession, the government dramatically changed its tone by declaring
that swift action was needed to stave off disaster and promised help
for the poor, the unemployed and struggling industries while also
avoiding "a return to permanent deficits."

 

Last year's parliamentary crisis was precipitated by contentious "poison pills" such as cutting public funding of opposition parties being slipped into the government's fiscal update. Perhaps having learned its lesson, the formerly combative Conservative minority stressed a "spirit of open and non-partisan co-operation." Liberal Leader Michael Ignatieff hinted that he was supportive of the new tone, although he accused the Conservatives of having a split personality.

 

Aside from the budget details revealed in the speech from the throne, the government's steady trickle of information continued with an announcement from Transport Minister John Baird that the Tories will pour $7 billion into infrastructure spending across the country. Officials also said the government would be offering modest tax cuts directed at the middle class in an attempt to kick start consumer spending.

 

HOW DO YOU REALLY FEEL?: Prime Minister Harper, who helped found the Reform party and its message of small government, is a trained economist whose Masters thesis poured cold water on classic Keynesian spending policies that encourage government deficits to combat recession. Now at the head of a government prepared to put Canada's finances back in the red, some observers are alleging that Harper does not truly believe in deficit spending, but is instead using the budget as a "survival document" to prolong the life of Parliament.

 

For their part, many economists supported the government's stimulus plans by saying there is no single solution to the current economic situation, and that the best approach to take is by sprinkling deficit dollars between job-intensive infrastructure programs and tax relief.

Perhaps driven to a sharp turnaround by economic despair, 58 per cent of Canadians said they supported the government's decision to run a deficit -- a 10-point increase over those who supported it when a similar poll was taken a week earlier.

YEAR OF THE OX: Millions of Chinese gave a hearty farewell to a tumultuous 2008 marked by a massive earthquake, the Olympics and the economic crisis. However, in a sombre Lunar New Year greeting, China's finance minister said that external and internal forces would make it very difficult to balance the budget while achieving steady and rapid economic growth.

DIPLOMACY BEGINS: U.S. President Barack Obama dispatched his special envoy, former Sen. George Mitchell, to the Middle East in a bid to solidify the ceasefire between Israel and Hamas. Mitchell, who Obama said "speaks for us," has a track record of patience and persistence during long negotiations and played a key role in brokering Northern Ireland's Good Friday peace accord of 1998.

Although Gaza is quiet for now, the repercussions of Israel's offensive in the area continue to reverberate across the world. An uproar was sparked in Britain -- where sympathy for Palestinians typically runs high -- that pitted the BBC and SkyNews against protesters and legislators who are furious that the broadcasters are refusing to air a charity appeal to help Palestinian victims. Former U.S. president Jimmy Carter also weighed in on the controversial topic again, claiming that Israel faced "catastrophe" if it didn't actively pursue peace and establish and independent Palestinian state.

Benjamin Netanyahu, the front-runner in next month's Israeli elections, may prove an obstacle to American diplomacy in the region. In a newspaper interview, the opposition leader -- an opponent of the U.S.-backed peace talks -- said he would allow the contentious Jewish settlements in the West Bank to expand.