SH> what say you cyberspace pundits, i've definitely
SH> given up on the worlds greatest treasurer et al ....

RS> And its all very well for Howard to howl, the record HE
RS> delivered on the economy when he was running it isnt anything
RS> to get too excited about either. With Hewson as his advisor too.

GC> I think the records show that real interest rates were much
GC> lower when Howard was treasurer.

Yes, but its more complicated than that. I dont think there is much
in it on say affordability of housing in recent times. And we now have
inflation rates the likes of which havent been seen for many decades.
And in many ways inflation is what buggers up an economy more than any
other single thing, coz it radically warps what people do. You get lots
of mindless business activity which is just an effect of the inflation.

RS> The fundamental thing that I think most of the voters really
RS> cant quite grasp is that NO ONE really knows very much about
RS> controlling the countrys economy very well. Its quite silly and
RS> superficial to be just blaming it all on Keating. Utterly superficial.

GC> Paul has been telling us for years he controls the leavers and
GC> the RBA, and he's been treasurer or PM for most the past 13 years....

And only a dill takes anything any politician says as gospel.
ANY politician.

GC> so who else should we blame for the mess.....the Deficit dialeks?.......

The immense difficulty of predicting just what the economy will
be doing, and hence what you need to do to make it do less of the
stuff you have decided you dont want to see. When Treasury predicted
in the last budget papers that business investment would grow at
14%, everyone fell about laughing. It actually turned out to be 24%.
How the hell can you actually set the economic settings properly
when you cant even predict stuff like that with any accuracy ?

RS> Whats currently being attempted is to dampen down demand
RS> BEFORE the economy goes out of control. The last time around
RS> everyone did nothing for far too long, the economy was totally
RS> out of control and had to be bludgeoned with very extreme
RS> interest rates which had the inevitable result of ruining
RS> perfectly good businesses coz there are hardly any businesses
RS> which can be viable if you have significant borrowings at 25% class
RS> rates. The current approach is to increase the interest rates much
RS> earlier so you dont get the blowout which will ruin the very good
RS> achievement on low inflation. That hasnt been seen for decades.

GC> Ok I agree, but why is this so,......

Very very simple really, its extremely difficult to predict what the
economy will do. THATs why the wheels fell off, they couldnt predict
that the economy was going to boom like that, and by the time it was
obvious that it had, there was no alternative but massive interest rates
to bludgeon the economy, and kill lots of viable businesses in the process.

GC> part of the problem is Pauls big spending (give-a-ways etc to buy
GC> votes/popularity?)

Nope, it wasnt to buy votes/popularity, thats mindless party political
sledging. The perception at that time, not just Keating either, the
entire Treasury too, that you needed that sort of growth to generate
enough new jobs to do something about unemployment. The problem was that
while that boom time did indeed generate lots of jobs, it overheated so
badly that it was inevitable it would burst, particularly in the
property market boom and insanity that went with it with the banks going
completely mad and lending money to anyone, whether they were a
financially viable proposition or not. Of course you get spivs and con
men roll up with their wheelbarrows to take the money away when the
banks are up there on the table stripping to the heavy metal music. What
did you expect them to do, say 'no thanks, thats not a very good idea to
be doing that with your depositors money' ?  People like Bond and Skase
just order up a freight train to take the cash away to Switzerland.

GC> since hes been PM has only worsened our problems,

Thats just silly hagiography stuff. In fact in the last say 18
months there have been a vast number of new jobs created, 400K or
something. Mostly in small business too, not even public servants.

GC> he can't go on spending money like he has and must CUT his spending....

Yes, I personally wouldnt have done the stuff like the child payments,
both the payments in general and the child care stuff. BUT the other
side promised the same thing TOO. And the coalition had a vast swag
of spending cuts. The electorate decided that they thought that that
stank to high heaven. I think thats actually called democracy Graham.

GC> like a household that spends too much on bankcard, spending
GC> has to be cut and the overdraft repaid until its under control.

This sort of comparison between a countrys finances and personal
finances are mindlessly simplistic. AND you will find that even with
most peoples personal finances, they actually run a deficit themselves
in precisely the same way on house finance and car finance anyway.
When was the last time you saw new wage earners saving and paying for
their cars and houses with cash ?  Not very bloody often, thats when.

RS> Whether it will work or not is another matter entirely. The short
RS> story is that no one knows coz its not been attempted before. But
RS> IMO its well worth attempting. Because low inflation is a very
RS> very desirable thing to have in the economy over decent periods.

GC> Lets hope it does help, but its only band aid treatment.......

Bullshit it is. Ensuring low inflation over the long haul
is the exact OPPOSITE of a bandaid solution.

GC> Paul stop spending our money that you (we) haven't got, and
GC> make sure the money you do spend is spend on real jobs etc...

Welp, the coalition thought they had a plan like that. The
electorate thought it stank. Thats what democracy is about.

GC> not given to arty trendies to do a bit of painting etc...

True, but then the coalition has promised stupid stuff like that too.

--- PQWK202