Sunday 27th of September 2020

a trickle ain't a river...


“The biggest deficit since World War II” was the important phrase repeatedly linked to Josh Frydenberg’s economic update on Thursday.

What’s been missed is why it is important.

No, it’s not the size. It’s the reminder that we’ve had worse before and came out of it without bone-crushing austerity or imposing a massive tax burden.

We grew out of our World War II debt and deficit, a vibrant young nation bouncing back from wartime austerity, investing in its future, enjoying much higher immigration and natural population growth than we’ve become used to, luxuriating in strong real wages growth.

Reserve Bank deputy governor Guy Debelle explained earlier this monththat as long as GDP growth was greater than the interest rate the government pays, the debt is fiscally sustainable.

As Euan Black explains, the interest rate the government is paying to borrow is very low indeed and our debt, even with these fat deficits, is not very high on a global scale.

Throwing in a healthy amount of inflation eats away at the debt as well.


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the ghosts from the past trickles...

The Spanish philosopher George Santayana is credited with the saying: “Those who cannot remember the past are condemned to repeat it.”

And that has a lot of people – including many serious economists, the Labor Opposition and trade union leaders – very worried that Treasurer Josh Frydenberg is about to demonstrate the wisdom of Santayana’s insight.

Out of the blue at last Friday’s National Press Club appearance Mr  Frydenberg nominated two champions of neoliberal economics from the 1980s as his “inspiration”.

Britain’s “Iron Lady” Margaret Thatcher still makes conservatives dewy eyed as they recall her tax cutting, union busting, deregulation and privatisation years as Prime Minister.

It’s a job she held for more than 11 years before her party decided that she had outlived her usefulness and despatched her in a party room coup.

Mrs Thatcher’s friend and ally implementing the “trickle down” economic dogma of the time was US President Ronald Reagan.

Mr Reagan’s fervour was such that his first Director of the Office of Management and Budget, David Stockman, quit when the President delivered massive top-end tax cuts but gave up the fight to get  the spending cuts needed to pay for them through the Congress.

The trickle down didn’t happen. The Budget was left massively in the red and there was no pandemic to blame for it.

Both leaders set a framework of widening social inequality that fed enormous resentment, sowing the seeds for the disruptions of Brexit in the UK and the election of Donald Trump in America.

Mrs Thatcher is a curious leader to call on for inspiration at a time when Prime Minister Scott Morrison has a message of Australians “all being in this together” as the nation confronts the coronavirus crisis.

Mrs Thatcher famously said there was no such thing as “society” – rather it was up to “individual men and women” to work out their own problems and achieve their own prosperity.


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Frydenberg was barely out of nappies when the Reagan/Thatcher economic wild disasters happened... It was followed by the Clinton economic disaster who gave free reins to the derivative market, while all along going to little wars followed by Bush and Obama's warring actions ¸— all under false pretences... Presently Susan Rice — one of the warmongers working for Obama (as well as La Madam Clinton) — is jockeying to become Vice-President to a fading Joe Biden... 

One wonders if one is better served by a bumbling idiot than by a pair of determined hypocritical Democrat warmongers... Strangely, the present Covidical situation and the rotten weather (warmer than average though) in Sydney and along the eastern coast of Australia, seem to make the savage era of thermatic Thatcherism like a Sunday picnic...

Economically, Thatcher's actions were a bit like her war for the Falklands... She established rules such as an exclusion zone for the Argentinian warships which "they respected" (though they could/would sink any UK warships outside the inclusion zone), for her to order the sinking of the General Belgrano as a demonstration of "good will"... The Argentinian aircraft carrier (25 de Mayo, also outside the inclusion zone), aware of the deceit, went back to port, zigzagging in "shallow waters" along the coast, as to avoid being sunk by a couple of British subs.

Meanwhile Reagan was burning cash as if there was no tomorrow and there was none apart from the catastrophes such as the GFC and the likes we're facing now... 

parents from hell...



masking up...

masking up


Read from top. See also: the toon is relative...