Some have described the 2011 budget as cautious and safe. Cautious, yes. Safe – maybe politically, but not in terms of removing economic risks. And no one to my knowledge described it as strategic – constituting a coherent, medium-term plan for restoring balanced growth.
Arguably the two main economic problems facing the country are the structural imbalances and the slump in productivity growth, both of which the government inherited from its predecessor. Both originate with the enormous increase in government spending and regulation, and the anti-growth policies more generally, of the last decade.
The imbalances take the form of stagnation of output ....
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