Where the cure is not only worse than the disease it is the disease

Front page story in The Oz today: Shorten unveils tax and spend ‘cure’.

Bill Shorten will claim the most significant reforms to Medicare since it was created by Bob Hawke in 1984, with a $2.3 billion expansion of bulk billing to cut out-of-pocket expenses and provide free services for cancer patients.

Outlining a big-spending ­agenda, the Opposition Leader also promised to restore $1bn in TAFE funding to meet critical skills shortages while revealing he would match the Coalition’s tax cuts for 10 million people and ­provide bigger tax refunds for a further 3.6 million workers earning less than $48,000 a year.

The government seized on Mr Shorten’s budget reply speech last night, claiming Labor could not be trusted to deliver on its promise because of a record of financial and economic mismanagement.

Whatever Labor promises, they will do, and then some. They will steal from everyone to the maximum extent, and then wonder why real wages and household incomes are falling. This is what I wrote back in 2009 about Kevin Rudd, as he launched Labor’s last venture in tax and spend.

It is quite astonishing to come across the economic and political philosophy of a prime minister and find that a self-described economic conservative turns out to be anything but. After years of seeing the phenomenal success of market-based economies in comparison with all other varieties of economic organisation, and having watched the fall of the Berlin Wall not all that long ago, there is a frightening recognition that amongst some people, nothing much at all has been learned. The same ideas that have populated and driven the Left for the past two hundred years just seem to come out of the woodwork at the first sign of an economy in trouble.

It was a long article from Quadrant – where the photo above is from. It should be a reminder of the mentality that lies behind whatever the ALP might like to pretend on the surface.

Near on forgotten as well are the Costello years of budget surpluses and ZERO debt. Labor thereafter drove us into our present predicament since they have never understood how an economy works, only how to squeeze whatever they can from out of the productive to finance idiocies like school halls, pink batts and the NBN.

ECONOMIC INCOHERENCE ALERT: There I was, minding my own business, quietly eating my lunch while reading the paper, when what should I come upon was this: Negative bond yields revive fears of secular stagnation. From The Financial Times in London reprinted by our own AFR.

All of the world’s largest economies now face problems with slower growth. The lesson of post-crisis economic management is that only large-scale fiscal stimulus will provide an effective remedy.

It is astonishing how economically ignorant our present generation is. Having watched the stimulus provided around the world after the GFC create only additional harm, these morons continue to plough the same furrow since they know nothing else, and cannot learn from what is right before their eyes.

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16 Responses to Where the cure is not only worse than the disease it is the disease

  1. stackja

    Gough promised change.
    And Australia got change.
    BS promises change.
    Can Australia survive it.

  2. Rusty of Qld

    Until the Stupid Fucking Labour Lite Liberal Party grow some balls,develop a backbone get a brain and get in the ring and FIGHT it’s only going to get worse. God help our grandchildren.

  3. Confused Old Misfit

    Labour and all aspirant socialist political organizations, see only one road to Power and the maintenance of their place once achieved:
    Rob the earners through taxation, and then, using the earners money, bribe them mercilessly, at every possible opportunity in order to stay in Power.

  4. Petros

    Yes but did the Libs use that opportunity to reduce taxes, fund major infrastructure projects, reduce the public servants, or strengthen our military? We got the baby bonus, thereby reinforcing the handout mentality.

  5. Paulo Nigrum Anatis

    Your discourse might take on a little more credibility if you acknowledged the small fact that Rudd copped the worst financial crisis in a century – the GFC. We cynically expect politicians to rationalise their inevitable broken promises with the cliched “changed circumstances”; but in Rudd’s case it was the real McCoy, and largely nullified his intended platform.

    Spending may look reckless now, but at the time economic pundits were shrieking for it; and it was the significant reason at the time that Australia was the only nation not to go into recession. Whereas there is still some traction to the argument that Howard and Costello squandered the surplus on unnecessary middle class welfare that amounted to nothing more honourable than undisguised pork barrelling.

    I am no fan of the ALP and I truly believe that if elected, Shortness will prove the worst PM since Billy McMahon. The man’s a snake. However if your’e going to make a valid point, get the context right please.

  6. Dr Fred Lenin

    Shocked by the picture of that absolute wanker Rudd in full military gear ,bit like a heavily armed poodle ,,wouldn’t he frighten the life out of an aggressor . He couldnt fight his way out of a wet paper bag ,still he could bore them to death with incomprehensible words , Ruddifying the English language till they shot themselves for relief . Technology amazing the krudster in uniform. Sheesh.!
    Another thought a section of the Canberra Regiment ,krudd,turnbull,swannie , pyne ,bishop SHY, giliard, scomo ,freydo with corporal lambie in command ,now that is bloody frightening ,terrifying !

  7. Your discourse might take on a little more credibility if you acknowledged the small fact that Rudd copped the worst financial crisis in a century – the GFC.

    1892-1893 recession and bank crisis (resulting from the panic of 1893 and 1880s land boom)
    Federation drought and recession (1896-1902)
    Great depression (1929-1937, but Australia recovered earlier with austerity)
    1970s sclerosis
    1983 recession
    1990-1991 recession
    GFC (2007/08)

    You know, what you said about Rudd is not remotely true.

    Nor did his policy achieve anything other than to incur public debt and destroy purchasing power.

  8. Roger

    Spending may look reckless now, but at the time economic pundits were shrieking for it; and it was the significant reason at the time that Australia was the only nation not to go into recession.

    The significant reason why we came out of the GFC relatively unscathed was the booming terms of trade for our commodity exports, principally to China.

    Rudd’s stimulus was unnecessary and we’ve been paying for it ever since, as the sugar hit of $900 government hand outs only diverted wealth from the productive sector of the economy to the unproductive, although I understand Gerry Harvey did quite well out of it.

  9. Elderly White Man From Skipton

    When becoming excited about Costello surpluses and zero debt etc one might recall: GST+middle class welfare. A bonus recall: whatever happened to the State tax tradeoff (GST=no payroll taxes etc)?

    Maybe we need tax laws that are based on outcomes. If measured results are not improving, first we cut MPs salaries and pensions. Then we cut program budgets. If that fails, we go to rolling three year budgets with zero base. We’d need a special case for defence, I grant. But that would be fun. I’d pay money to set the performance goals for academic economists.

  10. Bruce

    Stackja:

    “Gough promised change.
    And Australia got change.”

    More like: “Australia got short -changed”.

    Are we about to be “SHORTEN-changed”, big time?

  11. I’d pay money to set the performance goals for academic economists.

    Calm down son.

    Yanis Varoufakis is not an economist’s bootlace.

  12. Rohan

    …although I understand Gerry Harvey did quite well out of it.

    And then he bitched and moaned about the unfair playing level afterwards, because our balance of trade was strong hence the $ was strong troughout the crisis. People realised they could import stuff without having to pay GST and 75 middlemen, so were no longer buying Harvey’s over priced wares.

  13. Anthony

    1892-1893 recession and bank crisis (resulting from the panic of 1893 and 1880s land boom)
    Federation drought and recession (1896-1902)
    Great depression (1929-1937, but Australia recovered earlier with austerity)
    1970s sclerosis
    1983 recession
    1990-1991 recession
    GFC (2007/08)

    Don’t forget late 1990s Asian Financial Crisis and the post-September 11, 2001 downturn. IIRC correctly, Costello had one or two deficit budgets, but the point is it was a surplus over the longer term.

  14. Beachcomber

    Don’t forget late 1990s Asian Financial Crisis ………

    Costello and Howard probably didn’t know what to do at they time so didn’t do anything much. As a result, Australia came out of that crisis relatively unscathed and moved on to a period of economic prosperity.

    If only there had been the same restraint with the GFC. If only the government had done NOTHING. But the self-inflated egos of Rudd, Henry et. al. required them to posture and preen themselves as the ‘economic saviours’. So they put us on the big government road of tax and debt; on the road to Venezuela.

  15. Tim Neilson

    Dr Fred Lenin
    #2980050, posted on April 5, 2019 at 11:48 am

    As the Duke of Wellington said about a new batch of recruits: “I don’t know what effect these men will have on the enemy but by God they terrify me”.

  16. Iampeter

    It is quite astonishing to come across the economic and political philosophy of a prime minister and find that a self-described economic conservative turns out to be anything but.

    Isn’t that something you should be writing about every single conservative?
    Certainly something you should be writing about yourself.
    I mean, you think Labor is economical incoherent, but yourself advocate regulating trade and immigration?
    The cure is worse than the disease? Who are you describing other than yourself?

    You have no alternative ideas to the left on anything, just much more confusion. I can’t imagine why you’re blogging about this stuff.

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