It's The Economy, Stupid

Hockey sounds like nothing so much as George W. Bush in the early 00's.

Voodoo economics is the name of the game right throughout the western [at least] world. Hokey[sic] is just spouting the corporate world's line that austerity is good, and that prosperity is just arounfd the corner, if only we give more to the rentier parasites and keep cuts to the income of the 99%.

Reality is different. We NEED BUDGET DEFICITS otherwise we take from the non government sector and that's austerity, leading to loss of jobs and GDP. The government has to spend money into the non government sector, to keep up with economic growth and have fuller employment and more GDP. That's why we see priogress today. We have a budget deficit. If Hokey[sic] got his way into surplus we would soon descend into recession.  The economy is motoring along precisely because the reality is not what he preaches. He can take no credit!

Harper in Canada, and Cameron in the UK  are in the same boat as Abbott and Co. Labor also is the same, except for the stimulus in 2009, which was what was exactly needed!

Plan A part 1

Whip a quick $9 billion into the Reserve Bank even if they don't want it and blame Labor for a terrible horrible budget deficit crisis that is an emergency and use the fear generated as an excuse to cull social services and hit the poor in the first budget and to cover up all the pre-election lies. ...

That plan failed.

The public were too smart.

Plan A part 2

Assume that just cos we are the COALition and the natural leaders all will be well and there will not be a blowout in the deficit, jobs will nagically grow fron out of the woodwork climate change will go away and we will be praised for our cruel xenophobia.

That plan failed, reality intervened - unemployment is a record levels for a decade and the abuse is actually getting attention [thanks NM]

Plan A part the third

OK get the media to go quiet on the budget deficit emergency and switch to standard operating procedure for the COALition, namely tax cuts for our deserving rich mates and shove the tax burden where it belongs- onto the poor via GST increase.

Plan A, all its parts, have failed or/and are failing.

There is no plan B.

"Reality is different. We NEED BUDGET DEFICITS otherwise we take from the non government sector and that's austerity, leading to loss of jobs and GDP. The government has to spend money into the non government sector, to keep up with economic growth and have fuller employment and more GDP. That's why we see priogress today. We have a budget deficit. If Hokey[sic] got his way into surplus we would soon descend into recession.  The economy is motoring along precisely because the reality is not what he preaches. He can take no credit!"

^^ What EJHR just said. 

I am so sick of all this surplus rubbish. It's smoke and mirrors. 

@ejhr

You are on the right track. We (usually but not always) need budget deficits to soak up un and under employment. In most circumstances attempts to get to surplus will only lead to lower employment and probably, recession.

The Federal government is never fiscally constrained and does not need to fund its spending from taxes. It spends simply by book entries. Taxes act to control demand, to discourage or encourage certain activities, but never to fund spending. The federal government is the issuer of the currency and its capabilities are not comparable to other entities such as households, sub-national governments and businesses which must fund themselves from wages, taxed and/or debt in order to spend.

Deficits do NOT matter, the aim should be to run the economy at a level that soaks up the most of the 800,000 unemployed- a national disaster we seem to accept.

There is NO debt and deficit disaster. Only an under-performing economic disaster. 

PS: no "printing money" is involved and inflation will only become a problem should the federal government try to spend beyond the productive capacity of the economy. We are running well below capacity (high unemployment) so doubt we need to worry about inflation untlil full employment is reached.

http://www.nextnewdeal.net/deficit-nine-myths-we-cant-afford

(Mods, you have a comment spammer - sigemuk.  Might want to talk to them about paying for advertising space, and sparing the rest of us the sight of the Mad Monk in his speedos).  

It's increasingly clear this government has no idea whatsoever when it comes to taxation.  They're reluctant to increase taxes on the upper end of town, or chase down avoided tax from corporations and family trusts.  They're trying to get the states to push for an increase to the GST by pleading poverty (we can't afford to spend money on health or education, that's a state thing, so the states need to ask for more GST).  They're trying to look tough on the GST by decreasing the overseas purchase GST-free amount to $0 (even though it's looking likely to cost them over $2 billion to pull in $600 million in GST - so we're going to be spending more than $3 to recover $1).  They don't want to look at altering capital gains tax, or reducing the tax breaks for super for the well-to-do, or anything like that, because that might just hurt their (rapidly diminishing) base.  Now they're talking of another "discussion" with the Australian people to look at what can be done about the tax system (didn't we just finish spending money on one of those, notwithstanding the Henry report a few years back?).  The only conclusion I can draw from all of this is that they're going to keep on holding reviews until they get one which gives them the answers they want.

I think the thing which annoys me most about it all is that the Liberals keep telling us they're the party of small business, and the party which understands money management.  So what are they on, and is it available on the PBS?  I could use some.

Well said, @ejhr and @HarryV.

Nothing guarantees a recession like a string of surpluses. If more people understood that 'government debt' is just another term for 'private savings', we could have a sensible conversation about this stuff.

Instead we get this rubbish about 'sensible path to surplus' as if it's the very paragon of economic virtue, and it most certainly is not.

Target unemployment and underemployment and the rest will take care of itself.

Capitalism is a system of crisis. The one percenters will limp comfortably along for as long as we let them. The debate about how best to manage a system wedded to inequality and planet destruction best start with how to get rid of it. Otherwise, just hope that in the next crisis, if not this one, the market does not dispense with you as well. Or raise your taxes.

Thanks Allan. I'd actually recommend https://modernmoney.wordpress.com as the best place to start. It reprises a lot of Bill's material, but is a little more accessible for the beginner.

I liken this fixation with budget surpluses and monetary policy (interest rates etc) rather than full employment as being like a footy coach using the number of inside-50s or scrum wins to measure their success. Yes, they're probably useful numbers, but they don't tell you whether you're winning or not.

I think I've said it best here at the Edinburgh Fringe for the past 3 seasons. Australia is Fucked. Until 9.40 PM at Cowgatehead in Up2 Extra till Aug 29. Extra show on Aug 29 at 2.30 PM at Cowgatehead in Up L. Next stop Ireland & England. Spreading the word as best I can. "Don't be like Australia. It's Fucked". See kieranbutler.com for songs and more info.

"We're cruel, we're racist, we're genocial. And very soon we're gonna be an economic basketcase." - Tony Abbott, being remarkably honest at a piss up you weren't invited to.

As simple as it sounds, the whole aim of this scurrilous Gov is to cut tax for the Rich while wacking it up on the poor and ordinary working Australians(the Rich just hope Joe can keep to the script) mostly in the form of raising the GST.
We are being groomed to be an impoverished, cheap, desperate workforce for the rich corporations while our Social Services are starved of funds or closed down.
We will hav to pay for everything and the premiums will never go down!
This bunch must be thrown out and we will hav to b careful of who we put in their place.
Unfortunately we don't have a man like Jeremy Corbyn untouched by the Malignant hand of Rupert Murdoch.
New Labour in UK was dominated by Murdoch because of the skeletons he knew in their personal cupboards which is why they are fighting their own Social candidate within their own party!

One can well ask where does the Australian  Government stand on deficit.

Thus Australia’s Gross National Debt  is about $500 billion but this can notionally  be removed by default, national bankruptcy, printing money or being forgiven.

However there is an inescapable Carbon Debt for all countries arsing from accumulated  greenhouse gas (GHG) pollution that will  inescapably  have to be paid by future generations (thus, for example,  if we don’t spend hundreds of billions on a sea wall, Melbourne’s 200 kilometre  string of bayside suburbs will be flooded by storm surges in the coming century).

Based on a damage-related Carbon Price of US$200 per tonne CO2-e (see (see Dr Chris Hope, “How high should climate change taxes be?”, Working Paper Series, Judge Business School, University of Cambridge, 9.2011: http://www.jbs.cam.ac.uk/fileadmin/user_upload/research/workingpapers/wp1109.pdf  ),   the World has a Carbon Debt of $540 trillion that is increasing by $20 trillion each year, and Australia has a Carbon Debt of $11 trillion that is increasing at  $600 billion per year with an  annual per capita increase in Carbon Debt of $60,000 for under-30 year old Australians (see “Carbon Debt Carbon Credit”: https://sites.google.com/site/carbondebtcarboncredit/ ) .

The Young aren’t revolting yet, but at some point in time the truth will get out through the Mainstream Media Wall of Silence, the penny will drop and they will demand their pound of flesh from the climate criminal older generations who have betrayed them.

Since accumulated wealth in our Carbon Economy is based on GHG pollution and 50% of wealth is owned by the One Percenters,  the Young will get the Olders to meet the accumulated Carbon Debt via a Wealth Tax (see Gideon Polya, “4 % Annual Global Wealth Tax To Stop The 17 Million Deaths Annually”, Countercurrents, 27 June, 2014: http://www.countercurrents.org/polya270614.htm ) ) and they will insist that increasing Carbon Debt is minimized through application of a proper Carbon Price.

Unfortunately the penny hasn’t dropped yet and in Australia Lib-Lab (COALition and Labor Right) governments are still flagrantly stealing the one common atmosphere and ocean of all people as a sewer for GHG pollution and burdening the Young with an annual per capita increase in Carbon Debt of US$60,000. And they are also are complicit in the annual deaths of 10,000 Australians and 100,000 others worldwide from Australia-generated carbon fuel burning pollutants (see  “Stop air pollution deaths”: https://sites.google.com/site/300orgsite/stop-air-pollution-deaths and World Health Organization (WHO), “7 million premature deaths annually linked to air pollution”: http://www.who.int/mediacentre/news/releases/2014/air-pollution/en/ ).

The Young and those who care for them will utterly reject the thieving, mendacious, mass murdering  and climate criminal Lib-Lab (COALition and Labor Right) climate terrorists, vote 1 Green and put the COALition last.

Dr Polya,

I second ret's remarks. The national debt should not be called a debt. It's an asset of the private sector, and never has to be "paid back".

Unfortunately, the Greens leadership doesn't understand this and continue their embrace of  deeply flawed neo-liberal ideology , thereby handing their adversaries the ammunition to discredit their policies: "where's the money coming from?"

     Don't blame Australia. Bill Shorten and his merry men deserve all the credit. To cap it all, he's still hanging around, just to ensure that Tony gets a second term!