Are These Guys Sound Economic Managers?

The 2011 Budget contained growth projections that were typically heroic. For the last few years Treasury growth projections have been nowhere near actual growth figures. We all know that these projections are based on little more than hope, and yet the government bases its reputation of sound economic management on the assertion that under National a full recovery is just around the corner. This fantasy is reinforced by growth projections that are at best optimistic, and at worst fantastical.

Now, only a few months after Budget 2011, the Reserve Bank is forecasting lower growth than expected. Should we be surprised at this downward trend? Hardly. We should instead expect to see more of it in the months following the election.

And then when the growth targets are not met (if National is still in power after the election) Bill English will blame unforeseen circumstances, market forces etc, even though it was obvious in May that the 4% growth projection for 2012 would never be met.

But the business world and media will continue to praise National's sound economic stewardship, even though everyone can see how ludicrous their projections are.