Faced with an economic and fiscal situation where he is squeezed from all sides - with rising interest rates, jittery financial markets and climbing debt - [Paul] Martin didn't have many choices.

* Its acceptance of an unemployment rate that remains too high, at 9.5 per cent this year and 9.4 per cent next year.

The ratio of federal government spending on programs, from old-age pensions to defence, will fall to 13.1 per cent of our Gross Domestic Product in 1996-97. This will be the lowest ratio since 1950-51, and well below the 16.2 per cent of GDP for the 1994-95 fiscal year that ends March 31.