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

budget surplus fetish « Previous | |Next »
April 5, 2012

Will the Gillard government stick to its guns, make some tough decisions, deliver cuts, defy reduced tax revenues and accede to the neo-liberal budget surplus mode of governance? A budget surplus is deemed to be good fiscal policy and is akin to austere (and rather fundamentalist) household budgeting even though , federal tax revenue since the global financial crisis has fallen by the equivalent of 4 percentage points of gross domestic product [about $60 billion a year].


Apparently a budget surplus is a political imperative not a economic one. Debt must be paid off and budgets balanced. If not, then the Gillard Government can be accused of government of profligacy. Look what happened to Greece and Ireland. So argue the fiscal conservatives with respect to the ALP's economic management.

Since the prevailing view in the electorate that the ALP"s Coalition opponents are superior economic managers, the notion of economic management is a fundamental political issue confronting the ALP.

Labor has allowed itself to be locked into the current economic orthodoxy on a permanent basis thereby consigning itself to a very narrow range of economic and social policy choices. In the context of falling government revenue budget surplus means cost cutting. Since the $32 billion military budget remains as sacrosanct as the budget surplus, neo-liberal idea of budget surplus means cuts to schools, universities and hospitals.

| Posted by Gary Sauer-Thompson at 9:15 PM | | Comments (5)


Society self-brainwashing itself.
Pointing out the idiocy of one size fits all and cut your nose off to spite your face, was what got Quiggin sacked from the Fin Review.
But what's left?
Management of decline, "governance" and "performance" of government, dislocated from reality and reinforced through the conditions within secret trade treaties and the allied tyranny of corrupt or skewed ratings agencies.
In other words, lie there, get shafted and pretend it could be worse.
Don't run a modest deficit on the basis of the need to acquire some logically-assessed game changing new infrastructure, or even adequately maintain older education and public broadcasting etc, that provide a long term dividend.
Just beggar your self for rent seekers, ignore the warnings of your own brains and common-sense, and substantially blind yourself for the benefit of your enemies.

I doubt that Labor could get halfway to a surplus without being hated by the electorate enough to throw them out.

the standard neo-liberal economic mantra is that budget surpluses are great for the economy and a sign that things are going well. Budget surpluses mean reduced government spending. That provides space for the private sector to grow apparently and for the Reserve Bank to reduce interest rates.

Will that result in economic growth in Tasmania, SA , Victoria and NSW where economic growth is low?

"Budget surpluses (reduced government spending) provides space for the private sector to grow apparently and for the Reserve Bank to reduce interest rates."

The question is: 'Will the stimulus from the RA's monetary policy (lower interest rates) fill the gap in the economy left by the withdrawal of government spending (budget surplus) in health, welfare and education?

And, will the push for a budget surplus weaken the economy in the non-resource states even further?

Politicians have painted themselves into a corner around the topic of a budget surplus. Their ability to achieve a surplus or balance the budget should be taken as a measure of fiscal responsibility.

Somehow the budget being in deficit means a runaway public debt problem.