Just hit the RBA button

From Wall Street Journal:

The state of California ironically is looking to hire 5,300 workers to process an estimated two-month backlog of unemployment claims.

This is the ABC solution to economic problems.  Make everyone a public servant.  And then deploy the Keating/MMT solution:

Every dollar which came out of young peoples’ super balances could have been funded by one press of the computer button at the Reserve Bank.

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16 Responses to Just hit the RBA button

  1. stackja

    Everyone PS and paid to pay tax to have more people paying tax.
    Lots of money.
    Worked in Zimbabwe!

  2. Ubique

    Worked in Zimbabwe

    Indeed it did. As a bonus, you could use Zimbabwe banknotes as wallpaper in generating big savings over the cost of the real stuff.

  3. Fred

    I remember bank in the 1990’s when Pauline Hanson’s adviser David Ettridge suggested that government print more money and offer 2% loans.

    Of course he was howled down – ignorant, racist, etc

    Some of those who did the howling are now advocating exactly the same thing.

  4. Colonel Bunty Golightly

    Thanks Mr Hunchback Et Al. Victoria is now known as “The Leper State” – saw it on one of their New car number plates, not kidding!

  5. Pyrmonter

    So, pre-vesting age refunds could be funded ‘by the press of a computer button’, but post-vesting age ones can’t?

    The idea that people should support themselves in their retirement and save to do so is good policy, and probably also good politics – it ensures there is a voting block with a stake in the performance of business, and does something to reduce the incentives for left-populists to run on ‘taxing corporations’ or solving government debt problems by an inflationary default.

    But that idea cannot support the bizarre notions that the Labor Movement has invested in compulsory super. There’s more than one way to save; and there are safer ways to do so than under the supervision of ‘industry representatives’.

  6. Pyrmonter

    @ Fred

    Re Ettridge – the condemnation of those ideas was deserved. That the commentariat, left and right, is infested with supporters of funny-money schemes is one of the signs of the increased decadence that has overtaken us since the late 1990s.

  7. Adelagado

    Off topic… but does the RBA or any Canberra bureaucrat know that Paypal is now one of the worlds largest banks? All businesses that sell on Paypal have a Paypal account that holds all the money paid for goods until the business owner transfers that money to their own bank account. Paypal is a good place to hide money if that’s your inclination… and right now lots of businesses would be so inclined.

  8. Entropy

    My explanation of MMT last night, with a bit of honing:

    MMTers start by just pissing money up in a broad spray against the wall. Then once they get a firm grip they hose it in great golden showers over the unwashed, lapping up a few droplets for themselves while they are at it. Then once the sun comes out all the puddles and damp patches on the unwashed’ clothes dry up with nothing to show but a few stains.

    Does that cover it?

  9. Bad Samaritan

    For stackja and Entropy and all others who don’t get the difference between Weimar or Zimbabwe, Turkey Yugoslavia etc and modern Australia or various other developed industrialized nations…… We have a huge glut of production. We have too little money chasing too much stuff. Production (of goods) is going OK.

    Comparing this to countries which had hyper-inflation because of a lack of goods is ridiculous. Scare-mongering; panic mongering. Deflation is hitting hard.

    However, if you are truly afraid, you’d have been buying gold a year ago when I first recommended it at about $A1700: now $2700, You can still buy and await the results.

    Don’t go around spreading fake news. Be prepared to snap up asset bargains, instead.

  10. Terry

    Australian Superannuation.
    The critical problems are its compulsion, its complexity, its inefficiency, and its ineffectiveness.

    Superannuation might be a good idea, it might not be. It is not the only way to save for retirement. The idea that the government can force your employer to confiscate a proportion of your income and stash it with (chiefly) the Union Cartels is simply corruption on a grand scale; a government out of control of the people and therefore extraordinarily dangerous.

    It is this mentality of letting our governments control and dictate to the people, rather than the other way round that has allowed them to so efficiently erode peoples’ rights through the COVID “emergency” without as much as a whimper from the once-free people of Australia, but I digress.

    Superannuation is meant to be a simple, long-term saving strategy that exchanges the immediate utility of those funds in exchange for an immediate tax break; to allow those funds to compound without the tax burden.

    The existing (astronomically complex) tax system, combined with the government wanting to tax contributions upfront (immediate money hit), instead of when they are used at withdrawal, means an army of accountants, administrators, auditors, regulators, and lawyers are “needed” to manage the giant boondoggle. (I wonder why there is such a strident lobby group for an increase in the rate to 12% and screams of pain from the same group should anyone want to access their own money – this is their livelihood you’re toying with, after all.)

    If the blatant vested interests and state-sanctioned theft of peoples’ money were not enough, it is that the system is a fundamental failure. It barely saves those superannuants as much as the ticket-clippers take in “fees”.

    People are accumulating that money (fine) but then reaching retirement and spending it as a windfall so that they can STILL draw the pension (the whole point was to eventually reduce the need for the provision of old-age pensions). And who can blame them? The system encourages this.

    If tax was applied at the withdrawal stage (as income), people would be incentivised to drawdown as annual income, taking advantage of yearly tax-free thresholds, rather than draw lump sums. It wouldn’t mean people could not or would not draw large sums (it is their money after all), just that there would be a tax incentive to extend the drawdown over several years/decades – as it should be – and reducing the reliance on the aged-pension.

    If the system cannot be simple, efficient, and effective then it should be dismantled immediately.

    If it can be these things then there is no need for compulsion.

  11. Terry

    Um, yeah. Better in the right thread perhaps.

  12. Entropy

    People have been saying there is a lack of production?

  13. H B Bear

    Thank God Keating and the Liars aren’t on the levers. The Lieborals are bad enough.

  14. Squirrel

    The ABC nitwits think that MMT will save them from a serious cull when the fiscal pigeons come home to roost – it won’t.

  15. Bad Samaritan

    Entropy (7.04pm) was that in reply to me at 1.33pm yesterday? If so, “they” are not saying it since it isn’t happening (with goods) which is where “they” are going wrong with the hyper-inflation angst.

    If a govt increases money velocity and it is chasing the same amount of, or fewer, goods then inflation is a certainty. However govt is not increasing money velocity since the amount being “borrowed” is going around at a lower volume /velocity than in say February when the people who are now getting $550 a week free, were getting $1200 a week earned.

    I’ve asked before why decades of credit (“money out of thin air”) has not caused massive inflation. A person on say $1200 a week could be spending $10,000 this week using a card, but isn’t….because the $1200 finds heaps of stuff at the right price. The goods are not being bid up because there is a glut..

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