Government – the Infantiliser

One of the biggest problems of big and ever bigger government is that infantilses people.  It creates the belief that all problems can be fixed by government when actually most problems are actually caused by government.  Take this contribution from this morning’s AFR from Alan Mitchell:

Put the technocrats in charge of fiscal stimulus

Sure Alan.  Why stop at fiscal policy?  Why not just get rid of all elected officials and elections and just leave government in the hands of the technocrats?  After all, unelected technocratic governments have always worked out well.

What a stupid, stupid, stupid idea.  Mitchell argues:

Yet, with the Reserve Bank’s conventional ammunition running low and the budget’s operating surplus forecast to nudge 1 per cent of GDP in the next two years, fiscal policy is better placed than monetary policy to support economic growth.

Shame that it was slopping monetary policy and sloppy fiscal policy that got Australia into this mess in the first place.

The problem with the Keynesian clap trap espoused by so called “experts” is that its predicated on giving power and authority to said experts and also because it is premised on the notion that it is consumption rather than production that drives an economy.

Yes yes TAFKAS knows that GDP – Gross Domestic Product – is a poor measure of economic performance.  But even so, it is still Gross Domestic Product not Gross Domestic Consumption.

As TAFKAS has tried to explain to his children, who seem to understand better, people don’t eat so as to work; they work so as to eat.  They produce so that they can consume.  They don’t consume so that they can produce.  Let TAFKAS express it in Katesian language and quote Say’s Law which says:

supply creates its own demand.

But Mitchell continues:

The days when the politicians could leave the economy’s management entirely to the RBA are past, which means fiscal policy reform should be back on the agenda.

So just because governments have been so stupid to leave “the economy’s management entirely to the RBA” in the first place that does not mean they should continue and even expand such lunacy.

If the government wants to help the economy, how about rather than borrowing and spending, perhaps they consider some productivity enhancing policies?  How about a productivity policy?  How about an industrial relations policy?  How about a deregulation policy?  How about a government contraction policy?  How about some tax cuts.  How about some public sector efficiency and effectiveness measures.  How about some reforms to politician expenses.  Several policy areas that should be considered before taxing current and future tax payers back to the stone age?

It is not enough that the 3 levels of government consume more than 36% of GDP and employ 2 million workers.  No lets get some more public servants to spend some more and hire some more public servants.

Thus Mitchell quotes and idea re-floated by HSBC’s chief economist in Australia and New Zealand, Paul Bloxham who himself re-floats an idea from Alan Blinder, a prominent US economist.

Guess what.  Bloxham is a former RBA official and public servant and Blinder is a former official of the US Federal Reserve and public servant.  2 public servants advocating for more power to the public service without the bother of democratic accountability.  Who would have thunk it?

Here’s one of Mitchell’s policy ideas:

A temporary cut in the GST rate – or the announcement of a future increase in the rate – would create a powerful incentive to bring forward discretionary consumption and housing construction.

And pray, will this temporary cut to the GST be matched with a temporary cut to government spending?  Ummm.  Would these technocratic public servants recommend a policy to adversely impact their brethren?

And why temporary and why just GST.  Why not a cut to GST, income tax, company tax, fuel tax, payroll tax, council rates, stamp duty with a concomitant cut to government spending?  Do we need technocrats for that advice?  TAFKAS just provided it for free.

But sadly Mitchell suggested that:

Blinder’s idea (of fiscal policy by technocrats) was dismissed as too radical.

Too radical?  How about too stupid?

But whenever there is a discussion about the enhanced powers of government and the technocracy, a carbon tax or emissions policy is never far away.  Mitchell closes with:

Maybe while they were taking back the GST, Scott Morrison and his treasurer could also think about the revenue-neutral incorporation of a tax on carbon emissions. That is, the GST rate on everything else would be cut so that total tax take would stay unchanged. As emissions fell, the other rates would gradually rise to keep revenue growth steady.

Granted, it would be a bit messy, but it could give the Coalition a credible policy on emissions reduction.

A revenue neutral tax.  That would be an oxy-moron.

And advocate for a carbon tax and increased powers for government and the technocracy.  That would be a regular-moron.

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13 Responses to Government – the Infantiliser

  1. stackja

    Voters should demand a cut in spending. Fewer advisers employed could be a start.

  2. nfw

    Why not just get rid of all elected officials and elections and just leave government in the hands of the technocrats? After all, unelected technocratic governments have always worked out well.

    That would just like the EU wouldn’t it? The European Parliament is not even a tiger which is toothless. It’s a joke to make the plebs think they have some sort of input into governing Europe when in fact it’s done by the European Commission and the bureaucrats. At least Nigel Farage knows and proves it’s a joke.

  3. Karabar

    Not just a cut in spending, but a cut in WASTE.
    And one of the biggest wastes of all is payment of homage to a fake religion called CLIMATE ALARMISM.

  4. I’m on a totally unrelated forum discussing other matters where the ‘experts’ are telling someone who is having difficulties with the basics to adopt overly complex procedures that will only frustrate. I have suggested a slightly different approach that supports using, learning and understanding the basics of the processes before becoming overly concerned about other issues that can be tackled later.

    These experts are beside themselves with disgust and offence that, according to them, some ‘novice’ dare suggest alternative approaches. The fact that my alternative approach provides a better understanding of what’s happening and why, and actually works, doesn’t seem to matter to these ‘experts’. The issue seems to be that you never question what ‘experts’ say.

    But what’s even more interesting is that these experts don’t have anything to show that demonstrates that they can actually produce the goods (even when asked to do so). At the moment, it’s all theory on their part. At least I’m showing the end results of my work which no one can contest as being of poor quality.

  5. jupes

    Voters should demand a cut in spending.

    Yes they should. Too bad most of them demand more spending (on themselves and their electorate).

    And there is no shortage of politicians willing to give it to them.

  6. Bruce of Newcastle

    Scott Morrison and his treasurer could also think about the revenue-neutral incorporation of a tax on carbon emissions. That is, the GST rate on everything else would be cut so that total tax take would stay unchanged. As emissions fell, the other rates would gradually rise to keep revenue growth steady.

    GDP per capita is linear with CO2 emissions per capita. Graph.

    There are no exceptions.
    Therefore falling emissions means falling GDP.
    If Alan doesn’t realise that he shouldn’t be writing about such things.

    (Chad has unusually low CO2 emission per capita but the data is about as reliable as anything you read in AFR.)

  7. jupes

    These experts are beside themselves with disgust and offence that, according to them, some ‘novice’ dare suggest alternative approaches.

    Well done bemused. Good stuff.

  8. Rob MW

    Too radical? How about too stupid?

    Lol….. it’s not beyond belief that Mitchell is maybe radically stupid where radical is just a pronoun for stupid under the new and improved LGBTQ language policy set.

    Get set for their ABC to come in with a withering dog-whistle to show how a good whistler can get a single Kelpie to push a mob of sheep through an expertly opened gate.

  9. Roger

    The problem with the Keynesian clap trap espoused by so called “experts” is that its predicated on… the notion that it is consumption rather than production that drives an economy.

    What else have they got when so much of the domestic economy is based on consumption rather than production?

    (Rhetorical.)

  10. Kurt

    I’ve never studied economics but doesn’t technology prove Says law very well? Take the iPhone. There was no consumption at all. Then they innovated and suddenly within a decade or so there was a multi billion dollar industry. This didn’t happen through consumption. It happened through production (innovation).

  11. Dr Fred Lenin

    Cutting spending ?
    Abolish abc and sbs ,
    Abolish Quangos,
    Abolish paid advisors.
    Abolish climate financing and subsidies.
    Abolish duplication of state govt provided services.
    Abolish welfare to migrants .
    Abolish refugee programme .
    Abolish foreign aid .
    Abolish u.n. Membership and contributions .
    There is a little start ,shoukd save a few billion a year of taxpayers funds .

  12. Kurt

    Dr Fred.
    My favourist would be to abolish the Federal departments of Education and Health. How many billions is that?

  13. Squirrel

    Put the technocrats in charge? – history, including the history currently being written in Hong Kong, would suggest that won’t end well.

    All this panicking about the economy is just debt junkies very slowly, and very reluctantly, confronting the reality that the debt racket can’t go on forever.

    Sooner or later, we face the unpalatable truth that we can’t keep living beyond our means and avoiding unpalatable consequences – most particularly the asset price speculators who want (government underwritten) markets to be a casino where they never lose.

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