02 July 2013

For the austerity crowd..

One for Randy Bentwick and Tony Abbott from a notoriously socialist magazine:

The BIS’s sermon is not holy writ. Its call in effect for more austerity – governments must “redouble their efforts” to ensure fiscal sustainability - seems quixotic given the damage that overzealous fiscal tightening did in southern Europe over the past couple of years. Yes, supply-side reforms are needed, but it is unrealistic to imagine that they will reap quick dividends. The “paradox of policy”, as Sir Mervyn King, the outgoing governor of the Bank of England, stressed again on June 19th is that monetary conditions have had to be extraordinarily loose since the financial crisis in order to encourage spending even though that is the opposite of what is needed in the longer-term in Britain, which is to raise national saving.

H/T: Lowy Interpreter

Here's an idea, Kev

On the use of debt, especially government debt:
[Rudd] could do much worse than to take the advice of five present and former Reserve Bank board members and propose to build a better Australia, to turn the orthodoxy of "all government debt is bad" on its head with a lesson about what good debt can achieve: Borrow to build, de-risk and then privatise vital infrastructure, lifting our potential productivity in the process and helping to fill the gap created by resources construction peaking.

Warning: If your name is Randy Bentwick (or Tony Abbott), you're likely to believe that Michael Pascoe is a raving old lefty and Labor apologist.