What a difference a month makes.

When I left on a camping holiday at the beginning of February the place was still in a state close to euphoria. John Howard was finally flushed, Kevin Rudd was in the Lodge, Kyoto was ratified, WorkChoices was dead, the troops were coming home from Iraq and the great catharsis of an apology to the stolen generation was imminent. Bliss was it in that hour to be alive.

But just 30 days later, all is gloom and doom. Inflation is rampant and the current account deficit out of control. We are facing infrastructure blockages, skill shortages and a possible wages breakout. Just around the corner looms a horror budget which will condemn the old and the handicapped to a life of poverty and misery. Woe, woe is us.

Well, frankly it was never quite that good and it certainly isn’t quite that bad. What has happened is just what most sensible commentators warned of many moons ago: the chickens so lovingly incubated by Howard and his government have developed into giant vultures which are now busily crapping all over the economy.

The policy of continuous election which consisted of steady stream of tax cuts, welfare payments and handouts to consumers across the board has led, inevitably, to unaffordable housing, runaway demand, an unsustainable stream of imports and an underlying inflation bubble which must be suppressed before it bursts; all this apart from the great missed opportunities for reform of infrastructure, education, health, the tax system and all the other ills which continue to beset the lucky country.

This is obviously bad news, but it is in the interests of the new government to make it sound worse than it really is. If Rudd together with his inner groups of Wayne Swan, Julia Gillard and Lindsay Tanner can claim the situation they inherited on November 24 was truly calamitous, it will make the nasty medicine they need to administer if not more palatable, at least more acceptable.

And let’s face it, some of the things which are going to disappear in the May budget should never have existed in the first place. Irregular annual bonuses to carers and to the aged were always a cruel hoax: if carers and the aged deserve a better deal – and there is certainly a good argument to say that they do – then increases should be built into their fortnightly payments and guaranteed by law; to offer them occasional Christmas presents when their votes are needed is patronising, insulting and bad economics.

The problem is that when such windfalls become part of the system people tend to budget for them and even spend them in advance; it would be kinder (and certainly more politically beneficial) to leave this year’s lot in place but make it clear that from now on the system will be reformed. However, the Ruddites have obviously decided there is a need to dramatise the need for cuts across the board, so we are now being softened up for the punishments we have earned for leaving the Howard mob in power for far too long.

But although those directly affected won’t like them very much, the punishments are not going to be overly painful. Swan and Tanner are looking for cuts of about $5 billion on top of those already announced. This sounds like an awful lot of hoot, but after the boom of the last few years it amounts to only a couple of percent of the budget as a whole.

Moreover the waste and extravagance (not to mention the self-indulgence) of the Howard mob mean that many of the cuts will be not only necessary but popular: few will mourn a drastic reduction in the number of spin doctors, pollsters, personal trainers, astrologers and other hangers-on which used to infest ministerial offices.

And of course, there are the coming tax cuts to administer salve to whatever economic wounds we do sustain. And the other good news is that the Reserve Bank has signalled that the wave of interest rate increases may finally be taking effect, and therefore be coming to an end.

No, it is not all doom and gloom; but we have been warned. The cynical materialism, the Panglossian smugness of the Howard years came at a price. It’s all about putting that message across, because if we don’t get it now, it could be the fire next time.

And speaking of messages, there was our no-longer Dear, once-was Leader raving away to a bunch of discredited American neo-cons about how he had left his country stronger, prouder and more prosperous than he had found it, just as he did on election night and just as he presumably will until the men in white coats with the big butterfly nets come to take him the retirement home with the padded walls and the waterproof sheets.

His claims to economic management have been dismissed as fraud by Treasury Chief Ken Henry, his policies denied by former allies in the Business Council, almost every item of his platform discarded by his hapless political successors. The Howard years are already being seen not merely as wasted (Howard’s own term for the regime of Malcolm Fraser in which he prospered as treasurer) but as a time of breathtaking incompetence and near criminal neglect.

And his legacy? The GST. That’s something to put in his Irving Kristol salad bowl.