February 16, 2013
The Coalition's economic policy is one of enthusiasm for austerity that includes severe cuts to social programs and the safety net. They are deficit hawks, even though austerity in response to the current global recession is a lose-lose proposition, as it reduces already inadequate private and public sector demand and economic growth. It is the economic analog to bleeding a patient and making them sicker.
Austerity, eliminate the budget deficit and a balanced budget public services to the poor to pay for the roll back of the mining tax and carbon pricing. The rhetoric is one of we’re running out of money; and that if we can’t keep running huge deficits, and increasing our national debt forever, because eventually, our creditors will just cease lending us money.
We cannot tax “the job and wealth creators” very much (eg., Big Mining and the fossil fuel industry) because they’ll go on strike and won’t create any jobs because the government has killed their incentive. So we have to reduce our borrowing, because we cant have any tax increases on “the job creators”.
A fiscally responsible government, therefore, has to lower taxes on “the job creators” even more, and cut spending substantially on programs that provide benefits for the poor and the middle class, so we can live within our means,” and remove the burden of excessive public debt on our grandchildren.
That's why we need to bleed the patient for the sake of prosperity.
There'll be smoke and there'll be mirrors because some states in the federation will be increasingly characterized by low public investment, worker abuse, environmental degradation, educational backwardness, high rates of unwanted pregnancy, poor health, and so on. The smoke and mirrors will in the form of how sharp cuts in taxes and government spending can generate jobs, wean citizens off public aid and spur economic growth.
Making most people poorer is the way to become rich is the smoke and mirrors.