Gary,
one minute Howard and Costello say that they are the greatest economic managers ever; the next minute they are spending as if there is no tomorrow. Doesn't their spending the (pork barrel and tax cuts) increase our spending (consumption) and so increase inflationary pressure?

Doesn't that then increase the likelihood of the RBA increasing interest rates in November to clamp down on inflation? Shouldn't the economist's finger be pointed at the Coalition?

Nan,
They are spending the boom not putting it away for the time when the boom finishes. I reckon they think the boom will never finish.

Nan, such questioning is like asking if God exists.

John and Peter, like the disciples of old, should be revered not questioned!

The dog will be shaggin' Howards leg next round maybe

I think Hulk Howard needs to change the game to WWF to win this one. Great series of cartoons by Bill Leak.

That noise we're all hearing is the sound of another coalition myth exploding.

Keating spent years trying to explain this stuff to the public - we're going global guys, but you'll be ok as long as you don't accumulate too much personal debt, because that'll hurt if global stuff goes haywire. Your government is no longer master of the economic universe.

Too complex apparently. Relaxed and comfortable sounded much nicer.

Nan,
Didn't Costello say he was opposed to the way that Howard spend up big to get back into power?

Lyn,
take the myths away and we stand naked looking at the terror in the heart of things. That's a pretty fearful situation to be in.

So who or what is going to protect is. We need something to clothe the terror; to make it bearable. The terror at the centre of an unregulated global market is like a giant wrecking ball.

Roundabouts and roller coasters Gary. Some people enjoy the terror, others cover their eyes and pray for it all to stop.

Nan,
I see that the Reserve Bank in its Quarterly Statement warns of inflationary pressure in an economy running at full stretch points:

Weighing up all these considerations, the Board judged that a somewhat more restrictive monetary policy setting was required in order to contain inflation in the medium term. Given all the recent information, inflation appears likely to be somewhat higher than earlier expected. Taking into account the effects of the August policy decision, along with other factors including the dampening effect from the appreciation of the Australian dollar, underlying inflation is forecast to be around 3 per cent over the year to December 2007. Ongoing pressures are currently forecast to keep both underlying and CPI inflation near the top of the target range during 2008.

The RBA does not directly address the increased pressure on inflation from government electoral spending.

But it does point to the possiblity of a further increase in interest rates. Costello was on the defensive as he tried to hose down worries of another interest rate rise this year, saying inflation is already at the high point of the economic cycle.