Deja vu is a discomforting, frustrating feeling. It's difficult to put your finger exactly on what's wrong and what's new from a repeat.

But, on Thursday, sitting in the Budget lockup listening to Bill English, I realised I was hearing essentially the same thing for the fourth year in a row. I was hearing a politician repeating the same forecasts about a rebound in economic growth solving the Government's problems.

Yet, for the past four years, growth hasn't solved the Government's problems because there hasn't been enough of it.

Treasury has forecast that GDP growth would bounce back to a "normal level" of 3 to 4 per cent and would make the Budget deficit and borrowing go away. Yet every year since 2008 it hasn't.


Then a sickening feeling hit me and I think it's beginning to seep into the bones of consumers, businesses and, ultimately, voters. It's different this time.

Maybe our economy and the global economy will never get back to "normal". Maybe economic growth will stay slower for far longer in the same way that interest rates are staying lower for far longer.

That's the conclusion of United States economists Carmen Reinhart and Kenneth Rogoff, authors of the widely acclaimed This Time is Different, in a fresh paper looking at economic growth and debt figures since the early 1800s.

They found that growth in countries with public debt over 90 per cent of GDP tended to be about 1 per cent lower than normal for an average of 23 years - yes, 23 years.

The implication is profoundly sobering. Most European countries, Japan and the US have public debt levels well above that 90 per cent threshold.

Add in company, household and bank debt and that debt load on the developed economy is crushing.

This goes some way to explaining why the global economy has time and again failed to bounce back.

Something is broken, and it still hasn't really sunk through into the economic models and thinking of bureaucrats and politicians in the developed world, who are still forecasting that their economies will bounce back to pre-2008 averages.


These policymakers are like the Energiser bunnies. They keep bouncing up and down on the spot, hoping to move, but just go around in circles.

Accepting that growth will be lower for decades rather than just a few quarters is scary. It means assets have to be revalued vastly lower.

It means assumptions about paying for pensions and healthcare have to be completely reworked.

I wonder how long it will be before the Energiser bunnies at our Treasury stop bouncing and the politicians stop repeating the same prescriptions while expecting a different result.