Pyrmonter: Convince me it’s different here

John ‘Grumpy Economist’ Cochrane – ex Chicago, now at Hoover (see the link in the sidebar) – has had a series of good posts on the policies of the new administration the US, which are seeing the rapid roll-out of a sort of kindergarten Keynesian economics that would shame even Ross Gittens.  In his latest post he concludes:

[L]ike Mickey Mouse in the Sorcerer’s Apprentice, the army of brooms is filling the castle with debt and disincentives, out of the sorcerer’s control, and then throwing him out too.

My question for Cats is: with a centre-right government here, are we seeing anything different?  And further, has the seeming rot in centre-left thinking in the US that now dismisses traditional concerns about excessive fiscal expansion also overtaken their local counterparts?

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50 Responses to Pyrmonter: Convince me it’s different here

  1. Fat Tony says:

    with a centre-right government here – you lost me right there.

  2. m0nty says:

    It’s hard to take the right seriously on fiscal responsibility after four years of Trump.

  3. Makka says:

    with a centre-right government here,

    No such thing here mate.

    It’s hard to take the right seriously on fiscal responsibility after four years of Trump.

    Nobody takes you seriously, mOron.

  4. rich says:

    with a centre-right government here – you lost me right there.

    The allure of the monkey’s paw is too much for any government. Voters get the government they deserve, especially if it’s predicate on who promises the most gimme dats

  5. rich says:

    It’s hard to take the right seriously on fiscal responsibility after four years of Trump.

    There is a difference between the nationalist right and the libertarian right.

    Refer to the political trichotomy.

  6. Bruce of Newcastle says:

    Half of society has come to the belief that money grows on trees. That is how the progressive Left views it. They think you can print as much as you like. Pay everyone a ‘living wage’? No worries. Want stupid uneconomic renewables and EVs everywhere, subsidize them. Want to keep your base sweet? Borrow money and give ’em ‘reparations’. MMT 4 evah!

    Until the Left comes to its senses and returns to fiscal prudence there is no answer. The Right, when it gets in can reduce subsidies, reduce taxes, eliminate boondoggles, run surpluses and pay down debt. And all that then happens is the Left gets in again by hook or by crook and then immediately spends it all.

    Trump recognized that, so at least pushed for more productive spending, since it was going to be spent anyway. He cut taxes on corporations and got employment down to record lows, especially of African-Americans. He pushed hard for more US manufacturing. He cut back the SALT boondoggle. He was turning the ship, which is another reason why the Dems were so desperate to get rid of him by any means.

    It’s the same here. Howard and Costello left the economy in excellent shape, then RGR spent all the dosh on goodies for their peons and retainers.

    I don’t like all this, being a Protestant Christian brought up to be frugal and responsible. But I recognize it won’t change until the Left has a collective brain transplant. Indeed the Left’s abandonment of the Protestant work ethic and Christian values I think contributes to this whole problem. When anything goes, as is now the case, it’s every man for himself.

  7. mh says:

    And further, has the seeming rot in centre-left thinking in the US that now dismisses traditional concerns about excessive fiscal expansion also overtaken their local counterparts?

    Both the US and Oz governments have handed over economic policy to their respective reserve banks.

    And god only knows what their endgame is.

  8. Snoopy says:

    m0nty says:
    April 9, 2021 at 4:11 pm
    It’s hard to take the right seriously on fiscal responsibility after four years of Trump.

    I understand that sugar and fat are a seductive combination, but hoeing into the second box of Krispy Kremes is bad for your health, Monty.

  9. Makka says:

    Trump recognized that, so at least pushed for more productive spending, since it was going to be spent anyway.

    And a lot more besides. His trade policies combined with tariff imposts and tax breaks forced US corps into re-investing in the US. Trump’s economic strategy was built around strengthening family financials, Main Street , US working class. There are Trillions at stake.

    Recognizing this, the US corps and Big Tech had to get rid of Trump- all that money going into the wrong pockets could not possibly be allowed to last.

  10. Brad says:

    What most people fail to see is that history repeats and in markets, economics etc. Everything is governed by the law of economic rent. When you view everything through this dimension things paint a clear picture of the future ahead and why we keep having the same problems.

  11. jupes says:

    with a centre-right government here

    WTF?

  12. Ƶĩppʯ (ȊꞪꞨV) says:

    one word: uniparty

  13. Rossini says:

    What the [email protected]@@ are you on about Monty?
    Read BoN comment at 4.42

  14. Roger says:

    My question for Cats is: with a centre-right government here, are we seeing anything different?

    The Lib-Nat colation is actually centre-left, just closer to the centre than the ALP.

  15. H B Bear says:

    Worrying about debt is so 2020. We’re all Socialists now.

  16. H B Bear says:

    The Lib-Nat colation is actually centre-left, just closer to the centre than the ALP.

    Ya reckon?

  17. Boambee John says:

    with a centre-right government here, are we seeing anything different?

    We have a centre-right government? Who knew?

  18. Mango Man says:

    Fiscal imprudence has been the US hallmark for some years. Recent global spending is the cream on a quite toxic cake that ranges across a range of debt markets and inflated asset classes. I assume we’ll see efforts to “reflate” shortly – which may be the fuse to the so far unattended bomb. Corporate debt in the US, PE-funded asset parcels, housing in Australia, Canada and Sweden – not to mention the curious situation of China’s local governments. In Australia we appear to have no serious people in the Parliament, rather a parade of hacks dealt up by the obscure machinations of the elderly cranks and juvenile ideologues that run major parties these days. A true crisis would demonstrate the hopeless inadequacy of this generation.

  19. luke73 says:

    Seems to me the 2017-2019 U.S economy continued trends and trajectories begun under Obama.. and then Covid happened and everything went to shit.

    https://www.bbc.com/news/world-45827430

    (Yeh I know the link is the Marxist BBC but the charts are from the U.S Govt.)

  20. Jock says:

    Back to Cochrane. I read his magnificent put down of Yellen. She was of course carrying water for the Party line that “climate change” is an existential threat, Cochranes response was brutal.

  21. Roger says:

    Ya reckon?

    Given they haven’t yet announced subsidies for electric vehicles a la Albo, yeah.

    Or did I miss something?

  22. Epicurious says:

    Jock says:
    April 9, 2021 at 6:00 pm
    Back to Cochrane. I read his magnificent put down of Yellen. She was of course carrying water for the Party line that “climate change” is an existential threat, Cochranes response was brutal.

    Jock can you provide a link to Cochrane’s response?

  23. jupes says:

    Or did I miss something?

    State Liberal Parties are to the left of Labor, especially on ‘climate’ policies. In the case of the WA Liberals at the recent state election, they were to the left of the Greens. No shit.

  24. Roger says:

    State Liberal Parties are to the left of Labor, especially on ‘climate’ policies.

    In QLD they’re neck and neck.

  25. mh says:

    Rather than getting hung up on left and right labelling in Pyromaniac’s post, we should remember that the Howard/Costello govt was committed to budget surpluses and no Fed govt debt.

    What we have now with today’s Liberal Party is a change in attitude to debt. The RBA magic money has no limits, and the Liberal Party are in love the RBA.
    Peter Costello has made a clear distinction between his economy and today’s economy, labelling us now as a ‘European’ style economy.

  26. mundi says:

    What we have is situation brought on because of the incompetence of labor, which allows Liberals to be lazy.

    Labor for many years now, have be sucked in by the vocal minority. This has drawn them to having extreme left politics, and its why they constantly lose federal elections.

    Because they are self inflicted wounds, Liberals don’t have to do anything, other than move to the left. We have all noticed on this blog that the Morrison government and liberals federally in general, just stand for nothing and have no plan about anything. All they need to do is stand one step to the right of the idiocy that is labor and they win by default. No further effort required.

    It is underrealised on the CAT just how terrible Labor are, and how often they shoot themselves in the foot. Shorter, at the lightest whisper from a minority and an ABC article, rushed out a policy to change franking credits, which the inteligencia said would be a highly accepted class war program.

    This policy was so disastrously bad – it ended with Shorten having to make groveling promise to pensioners that he wasn’t trying to steal their income, and promising them they would get exemptions. Then he spent the rest of the election ducking and weaving from the fact that the lower class with investments would pay more tax and get less income under his plans.

    Needless to say, you can easily win by default against such idiocy.

  27. Squirrel says:

    No, it’s not different here when you allow for the fact that the US can get away with more than us while they have the world’s reserve currency.

    Unless China finds a way of completely stopping its iron ore purchases from us, our federal budget will probably continue to be supported by markets, but things may start to get very sticky at the state/territory government level before too long.

    Local responses to the latest helpful suggestion from the IMF about a “wealth tax” to pay for the fiscal catastrophe will be grimly entertaining.

  28. Rockdoctor says:

    Agree with Roger here. For probably 20 years now we have had at best centre left Liberal and further left ALP Governments. Early on bankrolled by the mining boom. No such luxury now, soon they will have no choice.

  29. m0nty says:

    Bruce, it’s a lovely story you tell but the data shows that the Libs are consistently higher taxers than Labor, and bigger spenders. The Kouk has been into this for years. The Libs are definitely not the party of fiscal responsibility.

  30. egg_ says:

    Is old Bowtie Pusmonitor still hiding under his bed from the Couf?

    Retard.

    Trump’s affiliates are accused of making money out of the Couf.

    That’s Capitalism.

  31. egg_ says:

    Australia’s Worsening Economic Horror Nightmare

    Pusmonitor agreed with lockdowns and sought to find Economic good in them in formal posts here.

  32. Mark M says:

    Waiting for ScoMo to announce the raising of Australian roads by 3 feet, as he won’t laugh at, or point out the stupidity of Swampy Joe and his green advisers.

    Raising the roof of the Sydney Harbour tunnel by 3 feet so the large semitrailers can fit in will take a level of stupidity and incompetence that even ScoMo will have trouble beating.

  33. egg_ says:

    Oh noes!

    “Short, sharp” lockdowns are back in the EU, with a new strain of the Couf!

    Merkel backs tougher COVID lockdown in Germany

    Socialists to the rescue!

    Coronavirus: Germany plans talks with Russia on buying Sputnik V COVID vaccine

  34. Entropy says:

    The federal government is currently spending our grandchildren’s taxes like it’s water through a firehose. Divkheads like Littleproud in disaster assistance have the spigot side open and waving it about like a drunk at the trough.

  35. Entropy says:

    From the original Cochrane post

    Economics is incentives, politics is redistribution.

  36. Herodotus says:

    Allowing pyrmonter to get his name up in lights spouting rubbish is almost as bad as having the numerical one crapping on threads ad nauseum.
    Bruce of Newcastle saved the day, as he often does.

  37. John Comnenus says:

    Because the LNP won’t fight the culture wars they are forced to accept the Left’s terms and institute a lite version of Leftisit policies. This forces the Left further Left and you end up with a left wing government pretending it is still a centre right governement.

    I for one will vote for Albo in the next election. I think we all need to experience the full idiocy of leftism to force the LNP to fight for what used to be common sense measures.

    And as for the idiocy of Monty’s comments about the Libs being high taxers and spenders he is right, but not in the way he thinks. Howard cut taxes modestly every year, this led to increased economic activity in the private sector where every tax dollar emanates. So every year after cutting taxes, revenue increased, and that is the historical normal outcome to cutting taxes. Cutting taxes increases revenue. So Howard had much more money to spend, so after paying down some debt he spent more, cut taxes, got more revenue, paid down more debt and spent even more money.

    If Monty, the Kouk, the Left, Treasury and the LNP were smart they would advocate to slash taxes, raise a heap more revenue and do what Howard did, pay down debt modestly and spend the rest. That is how you can be a big taxing and big spending government and be somewhat responsible about it. The key is to cut taxes.

    The problem with the Left is that they raise taxes, which decreases economic activity and then ends up generating less tax revenue causing bigger deficits because they think the increased taxes will raise more revenue. It never does, but they spend more thinking it will. Then Monty says the ALP are low taxers because their idiocy generates less revenue and they spend less because they have less money.

    The central paradox of taxation is that lower tax rates generate more revenue which makes it look like you are a bigger taxer. And then you can spend the more revenue without borrowing it so you look like a bigger spender as well.

    Here is a simple test for Monty, let’s say you get a $10k pay increase and after tax you put $3,000 to pay off some debt and spend $3,500 on things you want. Is that irresponsible spending? Let’s say you don’t get a pay rise but you spend an additional $1,000 on things you want by borrowing the money, does that make you more responsible because you are spending $2,500 less? Most normal people would say no because in the first case you spent money you had, so you had more to spend. In the first case you are both a bigger spender and more responsible about it.

    There is no difference at the federal level. Cut taxes, raise revenue, pay down debt and spend more. It’s a pretty simple equation. If you want to be centre right you might also want to cut some regulations and cut the size and reach of government as well. But that will never happen here because SCOMO and Fraudenberg are the biggest practical implementer of MMT on the planet. I don’t think the ALP would have been as reckless as this so called centre right government. That is why I will be voting to kick SCOMO and co out at the next election.

  38. egg_ says:

    When anything goes, as is now the case, it’s every man for himself.

    The Cat’s views on COVID, certainly Pusmonitor’s, have brought that home to many – it almost makes the Leftoid herd mentality look more appealing to a true “Centre Right” person!

  39. egg_ says:

    Because the LNP won’t fight the culture wars they are forced to accept the Left’s terms and institute a lite version of Leftisit policies.

    After being on the back foot over the Christmas bushfires, Scummo was on a winner as a “war time Prime Minister”, Stephen Bradbury style, with COVID – likely why the ALP are bashing him with Gender issues – which David Speers says is beginning to bite in the electorate.

    The tard deserves it.

  40. Mango Man says:

    John Comnenus: you might think cutting taxes raises revenue. But in the Howard years the big influence was commodity and asset prices together plus population increase with immigration and expanded student migration. They also had the GST, which shifted the burden of commonwealth taxes. Don’t forget that they had so much extra tax money – despite historically high shares of government spending – they had to create the future fund. I think the world is headed for a big windback of assets prices, debt defaults and inevitably higher global taxes.

  41. bollux says:

    As long as politicians are allowed to borrow money, mostly from people who aren’t old enough to vote or are unborn, none of this will ever change. With the corruption of money, everything else becomes infected.

  42. Albatross says:

    with a centre-right government here

    Hahahahahaha! Good one!

  43. Albatross says:

    I think the world is headed for a big windback of assets prices, debt defaults and inevitably higher global taxes.

    We’re already there. Western governments just debase the currency in preference to levying new taxes.

  44. John Comnenus says:

    Mango Man, you are wrong. The same pattern of tax cuts raising more revenue has been observed in all the 20th and 21st century tax cuts in the USA. And if the revenue came from Commodities, why didn’t Rudd get more revenue from the highest commodity prices ever achieved in Australia?

    Whilst many factors have a bearing, cutting taxes always leads to more economic activity which inevitably generates more tax revenue

  45. m0nty says:

    Scummo was on a winner as a “war time Prime Minister”, Stephen Bradbury style, with COVID

    We shall fight them on the b… wait, I’m being told we are not fighting at all, we are letting the states handle it. Plus anything that remains our responsibility, we are going to completely bugger up. Tally ho, what!

  46. Terry says:

    ‘with a centre-right government here’

    hahahaha – w[here]tf is “here” then?

  47. Tel says:

    The tard deserves it.

    We can always find another useless squish to head up the marketing department … while the same Canberra bureaucrats actually run the government.

  48. John Comnenus says:

    Tel is right. The public service is the most powerful organisation in Australia. Government is mostly out of the control of the politicians. An ideologically weak government is putty in the hands of powerful and smart bureaucrats. And that’s how a “centre right” government ends up instituting MMT on a massive scale.

  49. Rex Anger says:

    Tel is right. The public service is the most powerful organisation in Australia. Government is mostly out of the control of the politicians. An ideologically weak government is putty in the hands of powerful and smart bureaucrats. And that’s how a “centre right” government ends up instituting MMT on a massive scale.

    Ditto virtue-signalling wank projects like trams being shoehorned into spaces where they are at best of limited utility (Hi Sydney, Newcastle and Canberra!), ‘self-sufficient’ buildings that are forced to rely on grid power if the solar panels get dusty, cop too much pigeon shit or have more than a day or two of clouds and rain, prioritising their projections about the ‘needs’ of their Comrades over actual regional development, etc. (Hey Viktoristan, farmers in the Murray Basin would get far more benefit from completing the rail Standardisation and renewal program you stooges started a decade ago, over the maaaates who get an extra train service to the city from Ballarat or Geelong. Or those poor, poor dears in V/Line who might have to spend money on new Standard Gauge stock instead of keeping all their Broad Gauge equipment, and spending the money on themselves instead…).

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