For the first time ever, Tehran has attacked Israel from Iranian soil.

Firing hundreds of projectiles across the skies of the Middle East into Israeli airspace, including dozens of ballistic missiles and hundreds of unmanned kamikaze drones, Tehran’s genocidal regime has pushed the region to the brink of all-out war.

Yet, despite the fact Iran has repeatedly issued threats of wiping Israel off the map, many analysts, scholars, and politicians seem taken aback by Iran’s brazen attack. This feigned surprise isn’t fooling anyone. The West’s willfully blind approach to Iran not only enabled this assault on Israel, it also led to the barbaric terrorist attacks in Israel on October 7. If these atrocities and belligerent acts of aggression aren’t enough to wake us up to the dangers of Iran then what will?

For over forty years, Iran has spent every ounce of its social, political, economic, and military capital on exporting its radical ideology, harvesting terrorism, and obtaining the nuclear bomb—all with two primary objectives in mind: eroding American influence and destroying Israel.

Since at least the 1960s, when Iran’s first Supreme Leader Ayatollah Ruhollah Khomeini began nudging his country towards an obsession with antisemitic, anti-Israel, and anti-American thinking, Iran’s ruling elite has sought to mobilize regional support around the idea of Tehran as a transformative force committed to Muslim liberation across the globe. 

As one analyst wrote in 2019, “Khomeini’s revolution was supposed to span the Muslim world. He viewed all Muslims in the Middle East as subjugated masses to be liberated. Arab monarchs and secular leaders were to be displaced by Islamist parties that shared his view that religion should inform politics.” Underpinning this vision, of course, was and is Iran’s view that the Islamic world’s primary oppressors and enemies are America and Israel—or, as Khomeini described them, Big Satan and Little Satan.

This way of thinking, which has informed Iranian decision-making since Khomeini took control of Iran in 1979, has not only endured, it has accelerated as Tehran has gradually moved from talking tough to taking lives. From funding Islamic terrorist organizations such as Hamas, Hezbollah, and the Palestinian Islamic Jihad, to pushing towards nuclear breakout, Iran has become one of the most deadly and destabilizing regimes in the world. In fact, without Iranian weapons, financial support, training, and aggressive propaganda campaigns, everything from the Second Lebanon War to October 7 would have never happened.

Unfortunately, for a variety of reasons, Western nations have, by and large, turned a blind eye to Iran’s deadly fundamentalist ideology and the regime’s appalling activities—activities that have led to the loss of untold thousands of lives throughout the Middle East and beyond. 

This is not to suggest our collective approach to Iran—or lack thereof—is motivated by nefarious intentions. Rather, it is likely due to a combination of factors, including existing beliefs that Israel is more powerful than it really is, a deep-seated view, conscious or unconscious, that Jerusalem is to blame for regional hostilities, and an issue that has plagued Western decisionmakers for ages: ignoring or belittling what our enemies tell us.

From Adolf Hitler’s antisemitic diatribes which he issued for years before the Holocaust, to Osama bin Laden’s jihadi declaration against America half a decade before 9/11, to Putin’s rhetoric on Ukraine, our adversaries tell us time and time again what they plan to do—and then they do it. Nearly twenty years ago, former Iranian President Mahmoud Ahmadinejad said “The occupying regime of Jerusalem must be disappeared from the page of time.” Yet, in the time since, virtually no attempts have been made to curb Iranian aggression towards Israel. Ultimately, it would appear that most in the West either aren’t listening to Iran or they aren’t taking Tehran’s words seriously. 

In the same way, we would never suggest Russia is Ukraine’s problem to address alone, we cannot expect Israel to confront and contain Iranian acts of war in isolation. Further, the fact Israel, alongside many of its allies, was able to prevent the majority of Iran’s missiles from raining down on its citizens does not diminish the severity of what has happened.

All told, Iran’s attack on Israel is not simply an attack on the Jewish state. At its core, it is an attack on liberalism, on democracy, and on all that we stand for. The Iranian regime has made their intentions known for virtually half a century. If we don’t start listening now—if we abandon Israel—we will pay a very dear price later.

Thank heavens it’s almost over! Canada has a cottage industry of folks employed in the business of developing, forecasting, assessing, and evaluating government budgets. It’s quite unlike many other parts of the world particularly given how seasonal the trade is with activity usually lighting up when the first major province releases a budget—often British Columbia in February—and culminates in budgets from the federal government and the biggest provinces. The season is almost at an end, for now.

Canada’s federal government releases its annual budget on Tuesday. Much of what it will contain has already been spilled. Long gone is the era when budgets would be all new on budget day, followed by business leaders attending evening and morning-after presentations and meetings by economists as well as accounting and consulting firms. For years now, governments have used budgets as rolling P/R stunts. Imagine a company that releases its financials in bits and pieces over weeks in advance as routine habit.

It’s no secret that it will be a big spending budget that will probably hit relatively upper-income earners and corporations with higher taxes while never targeting a balanced budget. Key in terms of whether the latter matters or not is whether the assumption of a beautiful economy for years to come through the decade’s end comes to fruition given the rise of structural deficits that could be substantially magnified by a wider primary deficit in a weaker scenario. Ottawa is sending it out faster than it comes in on the assumption that the skies stay sunny forever; this assumption through the 1970s and 1980s ultimately led to a crisis.

Canadian governments are not lightweights when it comes to debt. Many cite net debt-to-GDP ratios that are healthier, but do so on the implied assumption that the financial assets in sinking funds, sovereign wealth funds, pensions, etc. are accessible. 

But for now, the manageable deficits are one thing. The impact on the economy from heavy spending is another. The federal government’s program spending has skyrocketed by about one-third compared to the fiscal year just before the pandemic and is slated to be 60 percent bigger than pre-pandemic levels by FY 2028–29. If not for such spending by the Feds and provinces, the Bank of Canada would not have had to hike its policy rate by as much as it has and might have already been in a position to begin easing.

Expect a strong focus on housing. The government created a problem with severe housing shortages through the serial application of demand-side stimulus and wildly excessive immigration and is now trying to fix that with sundry incentives to build more housing. Its target of 3.9 million additional homes to be built by 2031 is laughable. Canada would have to sustainably ramp up annual housing starts to much more than double what has ever been achieved in any prior year and despite labour shortages.

The housing plan they have announced has some constructive elements, such as training for the skilled trades, but its targets are a pure and simple photo-op. The targets also assume there will be demand for the type of housing they are trying to encourage—cheap units on public lands, factory-built homes, and homes like the ones built in mass fashion for returning soldiers after the Second World War that have since driven a booming business in tear downs and rebuilds.

Alongside such fanciful supply-side ambitions are curious efforts to further stimulate demand despite already widespread housing shortages. I wrote about the plans to ease mortgage financing here.

As for taxes? That depends upon how you define the middle class and how you adjust this definition for different types of families, different regions, and varying individual circumstances. We’re told the middle class will be left unscathed but are unclear about how the Feds will define this. At risk is hiking taxes on the folks who drive much of the growth, and further vilification of successful industries and, by the government’s definition, anyone outside of the middle class doesn’t work hard…

We will be assessing the implications of the Budget for the Bank of Canada in light of its recent communications (recap here) and the fact it has yet to incorporate anything on the budget in its forecasts. How ratings agencies respond may be a risk.

Finally, it would be extraordinarily naïve to assume that whatever is announced on Tuesday will be the end of the government’s plans. Canada faces an election by no later than October 2025. Governments that are doing as badly in the polls as the Trudeau-Singh-Freeland administration is performing don’t typically turn fiscally prudent. Bear that in mind in terms of the prospect for further fiscal easing that complicates the outlook for the BoC and that entails drawing implications for debt management and issuance plans beyond what is laid out this week.

This excerpt was originally published at Scotiabank.com.