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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Canberra watch « Previous | |Next »
November 29, 2008

There is such a fetish about budget deficits in Canberra. It is seen as the hall mark of economic mismanagement and irresponsibility. The politics is that Labor equals budget deficit because they cannot run the economy. And as this politics goes, a deficit is not seen as a way to prevent he economy from sliding into recession.


It is hard to build a case against the way the Rudd government has responded to the economic downturn on budget deficits are bad. What is the next step? That the Rudd Government is going a spending spree? That doesn't cut much ice when the general economic consensus is that there is a need to boost demand through government spending on infrastructure and aggregate demand.

What sits underneath this deficit is bad view is the neo-classical view that economic systems tend naturally towards equilbrium when markets cleared and all resources are fully allocated; and that regulation is distrusted and needs to be minimised.

| Posted by Gary Sauer-Thompson at 4:30 AM | | Comments (4)


Was going to comment on Tim Colebatche's article in Age until saw the cartoon.
The classical liberal view of course represents a different philosophical base located between the poles of Hobbes and Locke; very post-lapsarian swiging to Panglossian.
Is eagerly embraced by people like those who write for the Murdoch press and Turnbull who are insulated from the mistakes and greed that lead to market failure and the greif it causes for so many. Their personal selling out of society, which they smugly attribute to be their own pragmatism and cleverness, allows them to blithely continue; "business as usual", while the majority cop it sweet through repossessions and unemployment locally and famine throughout the Third World.
Such is "civilisation".

I Believe the government should spend to stimulate the economy. My developer buddy told me the economy was goin down since 2005. At this time whats the point of a surplus if the economy is goin down. The govenment should borrow money to stimulate the economy. Interest rates have been cut drastically but its not enough. people are still leverage in debt.

About the only thing Costello had going as a reason to get re-elected last year was that he'd paid off 'Labor's $96 billion black hole'. He and Howard spent 11 years harping on Labor as the party that runs deficits and deficits are baaaaaddd. Their successors can hardly change the message now.

Fortunately I don't think too many people are paying attention at the moment to what Turnbull's mob says about anything.

And wasn't so much of the past decade about switching debt from public to individuals. The debt is still there, just in a different form.
Schools, medical etc suffered
government spending cuts, often to fit some arbitrary one size fits all, regardless of any relationship between spending amount and relative efficiency per unit.
Like we build a car but leave out the spark plugs, to fit a budget rather than remember what it is that is being built in the first place. Some sullen-faced control freak wants "discipline", so a "dividend" (bribe) can be paid to the victimhood/entitlement mortgage belt at the next election.
And this same idiot mortgage belt, whilst being skinned alive into debt, to send its kids to private schools and pay for private health cover, due to service cuts, thinks the government of the day is Santa Claus!