Tony Abbott was the living embodiment of Adam Smith

HE must have been, right? ABC business reporter Gareth Hutchens argues that Josh Frydenberg is “repudiating the economics of Tony Abbott.” The Treasurer’s man-crush on John Maynard Keynes is “radically different” to Abbott’s preferences and situates Frydenberg “more in the Menzies camp than Abbott’s camp.” Hutchens’ knowledge of the economic philosophy debate in the Liberal Party – especially from the Oil Shock onwards – is running a deficit in its own right.

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56 Responses to Tony Abbott was the living embodiment of Adam Smith

  1. Neil says:

    Howard got the budget back into surplus within 12 months after the 1996 election. His spending cuts caused a Parliament House riot.

    Unemployment went from 8% in 1996 to 4% by 2007.

    Howard/Costello is the only govt since 1972 to reduce govt debt and to reduce unemployment

  2. Professor Fred Lenin says:

    We can do the American trick ,borrow heaps to make the economy you are stuffing up with woke crap look better . America has been doing it for years ,they only owe$228 trilion yes TRILLION and paedo biden is borrowingg Trillions more to top up Gates ,soros etc bank accounts

  3. Xenophon says:

    Least well informed observation on treasurers or libs that I’ve seen in some time, which is saying something.

  4. Bruce of Newcastle says:

    I’m neutral about Abbott and economic policy because he didn’t get rid of St Malcolm the Green and pussyfooted around the disastrous policies that were coming out of the Turnbull clique. But he was probably better than Frydenberg.

    On the other hand I stand by my view that the Libs may as well spend it all since if they don’t Labor will. The Left have embraced magical money trees like a man dying of thirst embraces a slab of VB in the Gibson Desert. One would hope though that Frydenberg would spend it on something somewhat useful, like HELE power stations and corporate tax cuts. But so far he seems disinclined to. Purple is the colour of the day.

  5. Entropy says:

    Frydenburg does have the financial firehose out at the moment. There is practically no restraint.
    I can’t think of any good economic strategies out of Abbott though, beyond killing the carbon tax.

  6. Entropy says:

    Anyway, this Hutchens dude seems to have the correct qualifications required of an ABC business reporter, ignorance. And it seems, he is further dumbing down to comment on economic matters.

  7. miltonf says:

    Just another ABC tax leach. Also, if a government manages to achieve a surplus then it’s time for tax cuts.

  8. Anonandon says:

    The only way out of this economic shitshow is through massive inflation or a reset. Neither is going to be pleasant. Keynes may end up being the most influential and evil individual of the last 100 years.

  9. Spurgeon Monkfish III says:

    Joshi Frydchickenberger – as I listen to that appalling imbecile Clennell discussing the former’s wondrous performance as treasurer.

  10. Neil says:

    Also, if a government manages to achieve a surplus then it’s time for tax cuts.

    If we don’t have surplus budgets we will have increasing govt debt forever

  11. Spurgeon Monkfish III says:

    Indeed, the ALPBC has always been my go to source for sound economic analysis since – well, never.

  12. miltonf says:

    If we don’t have surplus budgets we will have increasing govt debt forever

    Rubbish. Ever heard of the Laffer curve?

  13. Neil says:

    Rubbish. Ever heard of the Laffer curve?

    Not really. Without surplus budgets how will we reduce our ever increasing govt debt??

  14. miltonf says:

    Well you’re not very well read then.

  15. Dot says:

    Ever heard of the Laffer curve?

    Not really.

    What a bizarre or dishonest way to answer a seemingly simple question.

    You’re a clown Neil.

    Go away.

  16. Squirrel says:

    Figure 10 on this page encapsulates so much that is wrong with federal government spending –

    https://www.abs.gov.au/articles/insights-household-income-and-saving-state-and-territory

    What we discover from that most interesting graph is that, in the 2019-20 year, households in Australia’s second smallest jurisdiction – i.e. the Canberra Bubble – amassed savings which far exceeded those of Victoria, South Australia, Tasmania and the NT and which were not far behind Queensland and Western Australia.

    Only New South Wales, with nearly 19 times the population, managed household savings clearly ahead of the ACT – $38.4bn compared to $17.8bn for the ACT.

    It’s very difficult to imagine that these striking contrasts are because the residents of the Bubble are living in a state of Scrooge-like frugality, compared to wild extravagance throughout the length and breadth of the rest of the nation.

    A massive concentration of seriously well-paid (i.e. overpaid) jobs, along with very generous conditions of employment, which make two income (and high income at that) families much more the norm than elsewhere, might be closer to the mark. All of this paid for with borrowed money, and waiting for future taxpayers like a ticking time bomb.

  17. miltonf says:

    Methinks Neil is a politico-economic catfish.

  18. Neil says:

    Well you’re not very well read then.

    OK i am not well read.

    How can we reduce govt debt without running surplus budgets??

  19. miltonf says:

    A massive concentration of seriously well-paid (i.e. overpaid) jobs, along with very generous conditions of employment, which make two income (and high income at that) families much more the norm than elsewhere, might be closer to the mark. All of this paid for with borrowed money, and waiting for future taxpayers like a ticking time bomb.

    Yes canbra is like a tick on our fair land- feeding off it while poisoning it.

  20. Old Lefty says:

    Remember that, for the ABC and former Fairfax, anyone to the right of Lee Rhiannon is a fascist pigdog who deserves retrospective abortion or compulsory euthanasia.

  21. miltonf says:

    They really believe that old lefty. It’s full on unpersoning now. Following the lead of the illegal regime in the US.

  22. Neil says:

    What a bizarre or dishonest way to answer a seemingly simple question.

    You’re a clown Neil.

    Not really.

    My question was simple. How can we reduce govt debt without running surplus budgets??

    Like all lefties you turn to abuse

  23. miltonf says:

    I told you catfish- the Laffer curve.

  24. Neil says:

    Since 1972 there is only one govt that has reduced govt debt- Howard/Costello

    I have no idea what the Laffer curve is

  25. Perfidious Albino says:

    Not even comparing apples with apples – was Abbott ever Treasurer? Josh isn’t PM (yet).

  26. C.L. says:

    Neil is asking a question.
    I don’t see why he shouldn’t be answered. The Laffer curve proves nothing about “govt debt forever.”

  27. Bruce of Newcastle says:

    Neil – You’re on the money. The obvious answer is inflation. Which sucks. And there isn’t any at the moment anyway, except house prices. And rent. And food. But nothing important like televisions. Or toasters. Or whatever it is that’s in the CPI equation.

    So if no inflation what are they banking on? I think they’re banking on the Reserve Bank.

    What can be done is this: the RB does QE and buys Aussie bonds. The Government issues bonds. Then spends it. Because the coupon rate is nearly zero they can do this without stuffing the budget. So you end up with the Reserve Bank, which is owned by the Australian government, owning a stupendous amount of Australian government debt in a snake eating tail sort of way. This could reach tens of trillions if the forex markets let them do it.

    What next that happens is the government passes a tiny bit of legislation which cancels the bonds the RB owns, thereby cancelling the liability on the RB balance sheet, which is written off. It’s a miracle, all the debt has gone!

    Of course there’s a sovereign risk about such things, but if everyone does it it’s ok innit?

  28. Rex Anger says:

    Methinks Neil is a politico-economic catfish.

    It’s a Grigsock turned up to Maximum Derp.

    Beyond even Ed Case-levels…

  29. miltonf says:

    I don’t see why he shouldn’t be answered. The Laffer curve proves nothing about “govt debt forever.”

    Yes it does- cut taxes => economy booms => government tax take actually goes up. Kennedy, Reagan and Trump did it.

  30. Neil says:

    Yes it does- cut taxes => economy booms => government tax take actually goes up. Kennedy, Reagan and Trump did it.

    Govt debt went up under Reagan and Trump.

    Since 1972 only one govt in Australia, the Howard/Costello govt has reduced govt debt

  31. C.L. says:

    Yes it does- cut taxes => economy booms => government tax take actually goes up. Kennedy, Reagan and Trump did it.

    The economy will not boom forever and governments can increase their spending still more when in receipt of bigger revenues. Laffer proved that lowering taxes can be efficacious in certain circumstances for particular timeframes. I’m not aware of anyone claiming his theory proves that governments can go on spending more and more forever and paying for it by lowering taxes forever. I’m not an economist but that sounds to me like total bullshit.

  32. miltonf says:

    I’m not an economist but that sounds to me like total bullshit.

    I don’t agree- aiming for surpluses is keeping other people’s money that should be returned to them as well a leaving a money pile for your opponents to piss up against the wall.
    I’m not aware of anyone claiming his theory proves that governments can go on spending more and more forever – I never said that.

  33. miltonf says:

    Govt debt went up under Reagan and Trump.

    Yes and the sun still came up the next day. With a strong, low tax economy it can gently inflate out. Howard and Costello’s ‘legacy’ looks more and more tatty every day.

  34. Tim Neilson says:

    Yes it does- cut taxes => economy booms => government tax take actually goes up. Kennedy, Reagan and Trump did it.

    OK, so suppose the government is running $100 billion a year deficits. If the Laffer curve causes an increased tax take of say $50 billion, but the government increases spending by $60 billion, are we on the way to getting rid of government debt?

    It’s innumerate bullshit to insist that one side of the equation can get rid of debt without also looking at the other side of the equation. Neil is right – whether a “surplus budget” is caused by the Laffer curve, or reduced spending, or both, the “surplus budget” is an essential prerequisite to reducing government debt.

  35. miltonf says:

    the “surplus budget” is an essential prerequisite to reducing government debt.

    Never going to happen.

  36. miltonf says:

    How come the US economy boomed under Trump?

  37. Neil says:

    With a strong, low tax economy it can gently inflate out.

    Name me one country where debt has been inflated out???

    I hope your statement is true because that is our only hope of reducing our every increasing govt debt

    Howards/Costello legacy is looking greater every day

  38. miltonf says:

    The last Vicco Liberal Government ran a surplus and it might as well have never happened. They should have done something bold like abolish payroll tax.

  39. miltonf says:

    Howards/Costello legacy is looking greater every day

    Irrelevant. Might as well have never happened.

  40. miltonf says:

    I was waiting for decades for the US economy to crash because of the Reagan-Bush-Obama debt mountain. Instead it boomed when Trump cut taxes and reduce illegal immigration.

  41. miltonf says:

    In fact I would content that when the real economy is strong- people making and doing stuff, government debt is not a big deal.

  42. Mother Lode says:

    I’m neutral about Abbott and economic policy because he didn’t get rid of St Malcolm the Green and pussyfooted around the disastrous policies that were coming out of the Turnbull clique.

    Unfortunately a PM can not dismiss someone so easily.

    Abbott had always to be mindful of the whims of the Trumbilites to have any power at all. Possibly an unworkable conundrum. Push too hard against them and they would dump him – which, finally, they did.

    I would implore anyone so convinced to explain how they would have got the sopping wet Liberals to do anything against the will of its faction leaders. Simple “I would have fired such and such” without accounting for how factions like Trumble’s and the votes he commanded would have responded can, I think, be dismissed out of hand.

  43. PeterM says:

    ABC News (Madame watching – I’m in the next room) just referred to Taiwan as a self governing island. I suppose that description also fits Australia. But isn’t Taiwan also a country?

  44. miltonf says:

    Apparently Morrison was pretty thick with the Trumblites in an on again/off again sort of way.

  45. Rex Anger says:

    But isn’t Taiwan also a country?

    For everyone but the ABC it is.

    Even Chairman Winnie the Pooh’s stooges agree. Otherwise they wouldn’t be character-assassinating it as hard as they are…

  46. Neil says:

    In fact I would content that when the real economy is strong- people making and doing stuff, government debt is not a big deal.

    So govt debt increasing forever is not a problem???

  47. Tim Neilson says:

    So govt debt increasing forever is not a problem???

    Probably not if the GDP is increasing faster.

    But your primary point is of course totally correct – it won’t decrease unless there’s a surplus.

  48. Tator says:

    MiltonF,
    Victoria ran an “operating” surplus which unlike the underlying cash balance surplus as dictated by the Charter for budget honesty, allows the State Governments to say “we are running a budget surplus” whilst at the same time, borrowing or selling assets to fund that surplus. One of the big tricks was to have a government statutory authority like SA Water borrow money and then forward the proceeds of the loan to Treasury as a dividend which shows up as revenue only and they hide the net debt in the statutory authorities. The ALP did it in SA with SA Water and in Queensland with the power companies.
    For those who are not familiar with the term Underlying Cash Balance in the budget.
    From the Finance Department website:
    Underlying cash balance
    The underlying cash balance (UCB) is a cash measure that shows whether the Government has to borrow from financial markets to cover its operating activities and net investments in non‑financial assets used in the provision of goods and services. If this measure is in deficit, this indicates that the Government is drawing on resources of other sectors in the economy to finance its provision of goods and services.

    The UCB is calculated as net AAS cash receipts from operations (excluding net Future Fund earnings until 2019-20), plus financing adjustments (to remove cash flows more appropriately viewed as financing in GFS), plus capital adjustments (net investment in non‑financial assets). Financing adjustments include:

    net interest on swap transactions; and
    certain public debt interest (PDI) transactions.

  49. Anonandon says:

    I was waiting for decades for the US economy to crash because of the Reagan-Bush-Obama debt mountain. Instead it boomed when Trump cut taxes and reduce illegal immigration.

    There is a lot of ruin in a nation.

  50. Figures says:

    In fact I would content that when the real economy is strong- people making and doing stuff, government debt is not a big deal.

    This is pretty close to the money. The one and only thing that matters is how much of the productive part of the economy is cannibalised by the unproductive part (ie government). If that is a small amount then the debt could be enormous relative to government receipts and it wouldn’t matter as the productive capacity of the economy would always be enough to cover any expected future debts.

    But we aren’t in such a situation now – not here in Australia or anywhere. Any raising of taxes in any country would basically have zero impact on receipts because they would just lose business activity as a consequence (ie the Laffer curve).

    Bankruptcies always happen two ways – gradually, and then all of a sudden. At some point in the next few years (I suspect less than five), the sudden will be the case. Not just in Australia but everywhere.

  51. Spurgeon Monkfish III says:

    They should have done something bold like abolish payroll tax.

    Or reduced the instance and severity of traffic fines.

    As for Neil’s question last night, if I thought there was even a remote possibility of a feral government in this stupid, stupid country ever achieving a budget surplus again in our lifetimes, I would have happily answered it.

    There isn’t, so I didn’t.

  52. Louis Litt says:

    Squirrel – you are correct. These people are massively risk adverse and are the highest paid people in Australia working in conditions which private industry cannot of Ford.
    These people want higher taxes, call small business thieves, people exploiters etc, raise wages and cause the business owner to go to training and over Wehrmacht them in laws which bog them down unnecessarily.
    Ironic these people are savers yet public money they raise massive deficits.

  53. miltonf says:

    Observing the last five years, it seems like the only way the establishment could break the American economy was to send out goon squads to attack people and property coupled with a fake pandemic. The government debt was neither here nor there.

    As for Howard’s legacy- mass migration, the RET, unaffordable housing, land clearing laws and the ICC- the country is a worse place than it was in 1996.

  54. Neil says:

    I was waiting for decades for the US economy to crash because of the Reagan-Bush-Obama debt mountain.

    I think it is quite silly to compare Australia to the USA. I suspect the USA has vast overseas assets they could liquidate to cover their govt debt. We don’t.

    Plus the majority of USA debt is owned by US citizens and corporations. Most of Australia debt is foreign

  55. miltonf says:

    I think you’re quite silly. In fact I don’t think you are what you purport to be after those ridiculous comments about Catholics a while back.

  56. Neil says:

    The Treasurer’s man-crush on John Maynard Keynes is “radically different” to Abbott’s preferences and situates Frydenberg “more in the Menzies camp than Abbott’s camp

    I notice that ALP supporters like to point out that Menzies ran deficit budgets. My main query about that is government debt fell under Menzies. And Menzies was handed enormous WW2 debt.

    So how is it possible to run deficit budgets and for govt debt to fall?? If true Menzies was a genius. In fact govt debt was zero by 1972

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