Privatisation of Keynesian Policy

From this news articles comes this:

Simon Anquetil was arrested alongside the son and daughter of ex-deputy tax commissioner Michael Cranston in May 2017 over Australian Federal Police claims more than $100 million was siphoned through bogus companies to fund lavish homes, cars and an aircraft.

Anquetil was motivated by greed when he founded Plutus Payroll, the company embroiled in one of Australia‘s largest tax fraud scandals, the NSW Supreme Court heard on Thursday.

I was motivated by a desire to always have more: More success, more respect, more wealth,” Anquetil wrote in an apology letter.

Mr Anquetil was clearly causing insufficient demand in the economy.  But rather than wait for the government to stimulate his spending, he did it himself.  Perhaps he was motivated to act because to not act might reduce aggregate demand and cost people jobs.

By the way, Peter Smith wrote a good piece on this subject in Quadrant.  Find it by clicking here.

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7 Responses to Privatisation of Keynesian Policy

  1. So Keynesian discourse tells us that not only did we get the benefit of the original $100 million worth of production, by defrauding the taxation commissioner Mr Anquetil generated another $100 million of GDP? $200 million all up.

    Would the taxation commissioner have generated another $100 million GDP worth of government spending rather than luxury homes, cars and aircraft?

  2. mundi

    The argument Peter Smith makes actually supports Keynesism since most down turns are caused by government regulation. Wish may explain why the west in general still seems to bounce in the last few decades despite the absurdity of MMT.

    This down turn is just more obviously from government regulation….

    Also we are only just beginning to see beginning of COVID impact. This will cost us trillions.

  3. H B Bear

    We are all motivated by greed (wants). This is a problem if you are not related to the Commissioner of Taxation and see one third to a half of your income disappear every fortnight before you even see it.

  4. Just Passing By

    The rioters in the US seem to be the ultimate Keynesians. All that looting, burning, destruction. They are all just creating demand.

  5. Squirrel

    The Darling Buds of May was a very entertaining study of privatised Keynesianism – so was Minder.

  6. Seeing the MPC is 0.9, we can conclude this increased GDP by 1 bn dollars.

    Anquetil is a national bloody hero, peoples!

  7. Bad Samaritan

    From the Quadrant article: the opening premise “MMT, stripped of embroidery, is a theory that government spending can remedy unemployment”. Not correct since MMT is about people not being employed but still having the means to buy stuff. after that it was all downhill….

    Money printing done to take up some of the slack of the “missing’ earned income due to the govt having shut the economy down is aimed at clearing some of the general glut caused by already produced stuff finding no buyers.

    The eternal analogy: Mum gets sacked and the family is laslacking her $1000 per week. Dad is still bringing in his $1000 but down at the shopping centre there is the still the $2000 worth of stuff they woulda bought with the combined incomes when Mum was employed. meanwhile junior finds a bag of money in the woods and Dad borrows $500 per week from him to give to Mum. Now there is $1500 to spend between them, and still $2000 worth of stuff at the shopping centre. $1500 is less than the previous $2000 they had, so there will still be a “glut” of unsold stuff.

    When Mum gets back to work in ayeear;’s time, dad owes junior $26,000 and jnr says “I’m cancelling the debt”. That is it. No inflation; probably deflation as the extra unsold $500 worth of stuff each week is discounted and eventually there will be a downturn if the supply is throttled back.

    Dad could borrow $1000 pw and then the shops would still have $2000 worth of stock being bought by earned money (Dad) and money “from out of thin air (the woods: Mum). How any seller could tell the difference between “found money” and Credit Cards is up to Cats to decide.

    What is the danger in this? Explain calmly and rationally…please.

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