Jeff Frankel has written an article for Project Syndicate about the consequences of being constantly and unrealistically optimistic when it comes to fiscal forecasts and budgeting.
"In almost all industrialized countries, official forecasts have an upward bias, which is stronger at longer time horizons. On average, the gap between the projected budget balance and the realized balance among a set of 33 countries is 0.2% of GDP at the one-year horizon, 0.8 % at the two-year horizon, and 1.5 % at the three-year horizon.
So, how can governments’ tendency to satisfy fiscal targets by wishful thinking be overcome?”
Read more here on Project Syndicate to find out what Frankel thinks.