Wednesday, May 29, 2013

Politician - your use-by date has expired

Professor Bill Mitchell is a prolific writer and always has some valuable insight about what is going on behind the scenes - I have pinched the following quote from this post.

"In Australia, the Treasury tell the government to engage in fiscal austerity, which kills growth and forces the central bank to then lower interest rates to salvage the situation".

"But the relative effectiveness of the two arms of policy are different (fiscal policy is more effective) and so growth still suffers. The government strategy has the logical conclusion – that RBA rates go to zero and the economy enters recession – and then their tax base collapses (even more than now) and they fail to achieve their surplus anyway. Meanwhile hundreds of thousands of people have lost their jobs".

How could this be good for the nation?

The reason why the Labor government is doing it is to keep some bragging rights when next they are in opposition.  Plus they think they will trap the current opposition - which is likely to be our government - when the nation enters recession in 2014.

They think that Messrs Abbott, Hockey and Robb will be so locked into their crazy ideology that they won't be able to respond adequately - (and they're not the only ones).  And if they did respond then they would have to abandon the cult of austerity that now defines them.  An interesting dilemma and quite a clever political strategy - except we the people have become the pawns.

When the political contest resumes after the coming election, Labor will loudly declare - that they were the "lowest spending government since blah" and that "interest rates were lower under their watch - and other blah and faux bullshit".

And the worst thing is that many of us will believe it to be a good thing - because we want to believe it.  Never mind the thousands of unemployed.

Seriously, "How is it good for the nation for the government of the day to slash government spending - in pursuit of a magical surplus - thus forcing the RBA to lower interest rates to keep the place growing" - all to salvage some bragging rights and to trap the opposition?  And to try to appeal to the vast numbers of stupid people who have bought into the "government debt is bad" myth?

When did this become the main game, Virginia?

If our polity has become so bad that our government has to revert to myths, games and other bullshit - all to *appear* to be good economic managers - then it is time we ditched it and found an alternative.

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