Risks of Banking on Growth

“Growth is always the best way out of a fiscal hole. But governments only have indirect and uncertain control over how fast the economy grows… There’s a ‘serenity prayer’ aspect to fiscal responsibility: It’s a case of changing the things you know you can change, and accepting that while this may not always be the optimal path to prosperity, it’s often the safest one to take. (If you budget for 2 percent growth, you’ll be in excellent shape if growth turns out to be 3.5 percent instead. If you budget for 3.5 percent growth and don’t get it, you’ll be in serious difficulties).”