"It's the economy, stupid."

That famous phrase, uttered by advisor James Carville in 1992 to then presidential hopeful Bill Clinton, has resonated across the globe.

It doesn't matter how successful a leader is at foreign policy, infrastructure, social policy or education. If the economy tanks, and voters end up worse off, you'll soon be an ex-politician.

It makes little difference to an electorate that your government may have done better than all the others, or that it had to contend with a crisis.

The hip pocket is paramount.

So for the past quarter of a century, it has been de rigueur for prime ministers, presidents and treasurers globally not only to boast their economic credentials but to give off the illusion that they actually run the show.

The problem is, there are so many levers being pulled in so many different directions by outside forces few even knew existed, that politicians and their economic mandarins are like cork boats caught up in a raging storm.

Wayne Swan may have been declared the world's best treasurer by his global peers because Australia was one of the few nations that avoided recession during the financial crisis, but it was China's boom that swept Australia along on a tide of prosperity.

Swan's cash splash through the worst of the crisis - when our banks were temporarily paralysed - was a textbook response.

In the end, however, arch nemesis Joe Hockey exploited the debt blow-out and the descent into deficit to paint Wayne as an economic dunderhead.

But what goes around ...

Treasurer Joe Hockey has unveiled the Mid-Year Economic and Fiscal Outlook (MYEFO), an update from the May budget - you know, the one that has yet to get through the Senate.

And despite all the promises of fiscal repair, of ridding the nation of "Labor's debt and deficit disaster", things have deteriorated sharply since Tony Abbott and Joe took the wheel.

Our national output is declining, unemployment is climbing and consumer confidence is shot.

The tyro Treasurer had all the right intentions when he assumed the role - cutting spending and lifting income to bring the budget back to surplus in three years.

But the targeted cuts and increased taxes hit the young, the lower paid and weaker sections of society harder than older, wealthier and better-established. At least that's the way it has been perceived by voters and, when you are in politics, that's all that counts.

That, however, is only half the problem.

Those outside levers once again have taken control. Where thermal coal once was delivering $US120 a tonne and coking coal almost three times that, prices have thudded to earth. Thermal coal now is struggling to stay above $US60 a tonne.

It's the same story for iron ore. The price of our biggest export earner has halved this year alone - edging below $US70 - and is way below the estimates in the May budget that many thought were too pessimistic.

And that's punched a massive hole in the nation's finances.

According to economics consultancy Macroeconomics, the collapse in resources prices will strip about $10 billion a year from export income every year until 2017.

Add the budget savings measures now stalled in the Senate, and that revenue shortfall blows out to $21 billion a year.

The optimism from the budget that had us returning to surplus in 2017 has evaporated.

It looks like we'll be running budget deficits for another decade, leaving Joe stuck between a boulder and a brick wall.

Many hope the Treasurer will outline a strategy for plugging the budget hole. But his options are limited.

Wages growth is the lowest on record. With inflation, wages are going backwards so he can't rely on income tax receipts creeping up to automatically cover the shortfall.

But his big problem is company tax.

Those lower commodity prices have hacked into our nominal GDP growth. It has been on the slide for the past three years from 9 per cent in 2010/11 to 2.5 per cent in 2012/13.

It has only declined further. That means weaker corporate earnings and less company tax payments.

On top of that, the deluge of offshore cash flooding into new mine construction that has driven the economy for a decade is rapidly drying up.

Two years ago, capital spending on major resource projects was a touch under $70 billion. Within two more years, it is forecast to be around $10 billion.

Some election promises have hurt too.

Take the carbon tax. Instead of $6.5 billion a year flowing in, the Government will spend $2.55 billion over three years on its on Direct Action policy.

And don't forget the $9 billion the Treasurer handed over to the Reserve Bank.

Joe's dilemma? The cash is evaporating. But the economy's so fragile, aggressively hunting down other income sources could do more harm than good.

About the only thing that may ease the pain is a tumbling dollar that could help revive other parts of the economy, like our struggling manufacturers.

Even so, Australians will not be as wealthy as before. And we will emerge from a once-in-a-century resources boom with precious little to show for it.