Muttering darkly about cash cows and foreigners, Cosatu general secretary Zwelinzima Vavi vowed not to compromise. That critic of South Africa’s financial policies is not satisfied with the R5.75 billion subsidy hurriedly carved out of the 2011/12 Budget to blunt the impact of toll fees on consumers. And he vowed Cosatu would press ahead with its planned strike next month with perhaps another in April.

Cosatu has consistently attacked former finance minister Trevor Manuel and his successor Pravin Gordhan for the policies that have kept the economy afloat in a global financial tsunami. If Vavi had been finance minister since the ANC came to power, South Africa would be Greece.

That country has been teetering on the edge of bankruptcy for two years, because of policies Vavi espouses: borrow today and tomorrow will take care of itself.

The Keynesian multiplier model, popular 50 to 60 years ago, works in certain circumstances. It is based on the work of John Maynard Keynes. It showed that money spent by the government in the economy creates a ripple effect, multiplying and stimulating growth which, in turn, generates income. In this scenario it is okay for the government to run whatever size deficit and borrow what it needs because the government will rake in enough in revenue to repay the debt.

But, when this idea was first floated, government debt levels were not at current levels. In the US, for instance, government debt was only about 20 to 30 percent of gross domestic product (GDP). Now the US debt load is over 100 percent of GDP. That means the economy has to grow a lot faster to repay the debt than it would have in the 1930s.

Moreover, the formula no longer seems to work. Like anabolic steroids it starts to do more harm than good. George Glynos, the managing director of ETM, points out that the Group of Seven major advanced economies have deficits of around 7 percent of GDP. But Europe is in recession, the UK will be lucky to achieve 0.3 percent or 0.4 percent growth this year and the US, though looking a little better, is unlikely get much above 1 percent, according to Glynos. All this after massive cash injections into those economies since 2008.

In the current context the multiplier effect has passed the point of no return.

But the faithful can’t conceive of a world in which manna doesn’t fall from heaven because politicians promise it.

So, though last week’s Budget brought a round of applause from most quarters, Cosatu was not among those clapping.

Ironically, Gordhan’s financial blueprint for the next three years has been attacked from different directions. One school of critics is angered by its failure of ambition. The minister forecast growth of only 2.7 percent this year, rising to 3 percent, 3.8 percent and 4.3 percent in the following years. These figures fall far short of the 7 percent growth needed to meet the target of Economic Development Minister Ebrahim Patel’s New Growth Path – creating 500 000 jobs a year.

But there are also critics who say the growth forecasts are unrealistic, given the global context. Glynos cites the massive debt levels of many countries abroad. It is difficult for a country to achieve strong growth while diverting resources to debt. If large parts of the world are crippled by debt the global economy isn’t going to do well.

To cope with the situation, those countries’ central banks are churning out money and their economies are floating on a sea of debased currencies. And there are consequences for South Africa.