How long can government just keep spending?

[Dave A]

I'm trying to puzzle this one out.

South Africa's fiscal gap could widen further after finance ministry figures showed government expenditure had soared while tax collections were much lower compared to last year.

The data released by the National Treasury on Monday showed tax collections for the first eight months of the 2009/10 fiscal year were R26-billion lower than the same period in the previous year.

Finance Minister Pravin Gordhan has said tax revenue for the 2009/10 fiscal year would probably undershoot the target by about R70-billion.
full story from M&G here

So tax revenues are down - significantly. Realistically this should be no surprise. Meanwhile expenditure has headed in the opposite direction.

In October, the Treasury forecast a record budget deficit of 7,6% of gross domestic product in the 2009/10 fiscal year but analysts say it could be higher.

The National Treasury figures also showed expenditure in the [period] climbed to R489,5-billion compared with R403,2-billion in the previous fiscal year as the government sought to counter the recession with increased spending.

That's 20% up in the expenditure column! Not exactly small change.

Spending more to "counter the recession" sounds grand, but how much of it is really extra gravy train spend (vs actual developmental stuff that will produce a meaningful return down the line)?

Looking ahead, perhaps tax revenue will increase slightly year-on-year in the coming year. But what is government going to do about expenditure? Just keep on spending like there's no tomorrow?