Wednesday's Nova Scotia budget saw NDP Premier Darrell Dexter take a fiscally prudent course of raising the HST and cutting civil servants and public pensions.
Obviously, the HST move is challenging for his NDP compatriots across the country, who have been waxing fat off populist concern about the HST's broader footing and the endless demands for increased social service spending.
But what is more challenging for politicians across the country is the fiscal tradeoffs illustrated in the budget.
Nova Scotia is running a deficit, and raising taxes, and cutting government. None of the three are popular. All are happening because the Dexter NDP is smart, and they see that by making tough choices now, they could be in a position to demonstrate improvement by the next election.
The Nova Scotia budget also helps to illustrate the world wide governance challenge between high voter expectations and the dismal reality of budget making in a downturn.
The British election currently underway is all about the tough tradeoffs required. It will be interesting to see which bogeyman Britons fear more: the deficits Tory leader David Cameron blames on Labour PM Gordon Brown, or the unemployment Brown warns Cameron will trigger through his " age of austerity."
Both leaders are resigned to the tough business of governing; neither is talking about easy tax relief, for example. That's because they are both trying to be taken seriously, as befits those who wish to fill the shoes of Churchill, Gladstone and Pitt.
Other jurisdictions are not so lucky.
California remains the textbook example of irrational governance, thanks to their direct democracy laws that allow ballot initiatives to bind the hands of politicians in contradictory and impossible ways.
The latest scheme to avoid these tough tradeoffs between deficit, tax and cut is a plan to legalize and tax marijuana.
A debate on drug policy should take place in a health context, not a fiscal one. But given California's referendum legislation, the only way to square the circle between bans on new taxes, service cuts and deficits is to make radical moves. And this might be the only fiscally positive referendum that could pass California's fickle electorate.
While governments and voters can try to avoid the realities of budget making, opposition parties are the most vulnerable to ignoring the tough trade-offs.
Michael Ignatieff's credibility with voters increased when he announced his plan to delay corporate tax cuts. Finally, the federal Liberals have a way to pay for their plans, and a major point of differentiation with the Conservatives. Heretofore, the Liberals were unable to clearly show how their economic plan differed from Stephen Harper's.
In contrast, the major Ontario opposition party continues to promise all things to all people.
It's one thing for Tim Hudak's PCs to promise effortless tax relief to voters. It's popular to sound the alarm about rising deficits. It sounds nice to say things like "Instead of uncontrolled spending, we will invest in healthcare first."
What is flat out impossible is to pretend that these three things fit together. You can't get to deficit elimination and more health spending from tax cuts in a down economy. One of them has to give. Either you blow your deficit target, or you give up on tax relief, or you slash government and hike unemployment at the worst possible time.
Tim Hudak hasn't put forward a credible plan, because he can't and probably neither can anyone else in his shoes.
Every opposition party faces the same challenge: offering a different approach from the government, while ensuring it is credible.
In good times, this is tough. In tough times, it is near impossible, because economic conditions dramatically constrain the choices available to a handful of ugly options.
Mr. Ignatieff is aping Dalton McGuinty's approach, itself borrowed from Iowa governor Tom Vilsak: back off corporate tax cuts and use the revenue to protect and improve public services.
In contrast, Mr. Hudak appears to be cloning every turn of the Common Sense Revolution circa 1995.
However, the CSR is a poor template for how to proceed at this time. In 1995, the outgoing NDP government had left tax rates significantly higher than neighbouring jurisdictions, particularly on income tax. In contrast, thanks to last year's tax reform, Ontario income taxes are some of the lowest in Canada. Any boom for the tax cut bucks would be poorly returned in growth. (Don't get me started on the dubious economic gains of cutting consumption taxes.)
What is more, the CSR was launched into a highly favourable economic wind four years after a recession ended. The boom of the mid-90s created options and choices for governments. Some, like the Chretien government cut spending first to trim deficits, then later cut taxes to expand the economy. Others, such as Harris in Ontario, bundled modest spending restraint and tax cuts at the same time, and rode the global recovery out of deficit.
Neither of them did what Darrell Dexter's NDP is now doing, not because they were smarter, or of a different stripe, but because they didn't have to face the remorseless challenges that government's are facing right now. Recessions constrain government's abilities to make policy choices; simple as that. And that makes life hard for opposition parties, who by definition need to put bright-line political choices into the window.
Which brings Tim Hudak back onto the horns of the dilemma: risk credibility by offering a pie-in-the-sky plan from a bygone era, or live within a world of constrained choices and essentially leave the Grits' economic policy unchallenged.
For the Hudak PCs, it's a no-brainer: push the Harris plan from 1994, even if it may not bear scrutiny in the world of 2010. What Dexter and Co. have laid bare to all the world yesterday, is that reality has a way of catching up with wrongheaded plans, and sooner or later all of us, even democratic socialists, have to face the music.