Surplus unlikely says Swan.

[Sexy Lady]

If these states pursue austerity themselves in hopes of turning a surplus, it will be a larger drag on the federal budget again.

If Australia pursue austerity themselves in the hopes of turning a surplus, it will be a larger drag on the economic growth of same.

Leftwinger, this was the argument of many sensible economists, yet the Labor govt ignored those sage words, until such a time that the economy started feeling the drag. Why?

And why leftwinger have you changed you mind from wanting a surplus to now accepting a deficit? Nothing has changed, economically.... the concerns apparent then are still the same now... perhaps more so because of this drive to surplus instead of a drive to stimulus. The only thing that has changed is the mind of the treasurer, who has merely proven that he is not so economically savvy, cannot keep promises and has nothing in terms of policy that would stimulate an economy that due to austerity is now in need of stimulus.

[wog_girl]

Swan hasn't been a very strong treasurer compared to previous treasurers. Christ, even the Canberra press gallery have turned on him.

[IQS.RLOW]

Swan has done nothing but parrot treasury boffin ideas and figure with no understanding about what he is talking about.

Previous treasurers had economic credentials, understanding of economic theory and ideas of their own in implementation

[Neferti]

And why leftwinger have you changed you mind from wanting a surplus to now accepting a deficit? Nothing has changed, economically.... the concerns apparent then are still the same now... perhaps more so because of this drive to surplus instead of a drive to stimulus. The only thing that has changed is the mind of the treasurer, who has merely proven that he is not so economically savvy, cannot keep promises and has nothing in terms of policy that would stimulate an economy that due to austerity is now in need of stimulus.

Because he is a Leftwinger? Baaaa baaaaaa baaaaa.

[Leftwinger]

If these states pursue austerity themselves in hopes of turning a surplus, it will be a larger drag on the federal budget again.

If Australia pursue austerity themselves in the hopes of turning a surplus, it will be a larger drag on the economic growth of same.

Leftwinger, this was the argument of many sensible economists, yet the Labor govt ignored those sage words, until such a time that the economy started feeling the drag. Why?

And why leftwinger have you changed you mind from wanting a surplus to now accepting a deficit? Nothing has changed, economically.... the concerns apparent then are still the same now... perhaps more so because of this drive to surplus instead of a drive to stimulus. The only thing that has changed is the mind of the treasurer, who has merely proven that he is not so economically savvy, cannot keep promises and has nothing in terms of policy that would stimulate an economy that due to austerity is now in need of stimulus.

Hi Sexy Lady.

"Many sensible economists" arguing against pursuing a surplus is a bit of a relatively recent thing. A few argued back during the GFC that returning to Howard government-type surpluses year after year was unlikely to be possible as the private sector needed to repair it's balance sheet and return to more historically normal levels of saving after the biggest household - not government - debt binge in history.



Note also the government's debt - something that causes constant hyperventilating - compared with history....


http://www.stubbornmule.net/2009/07/par ... ebt-truck/

I think we should also note that the coalition's response until very recently has merely been to promise to deliver an even bigger surplus.

I have not changed my mind - I had long hoped that a surplus might be manifest, not as an end in itself but as a result sustained strong growth. But I always had my doubts - the private sector (particularly household) credit bingeing of the past 10-15 years has left a very large hangover of long-term debt to be paid down. And without a large and ongoing surplus in the external sector (something we have never had), accounting realities at the national level dictate that for the private sector to pay down such debt and accrue net savings (surplus), the government sector of the economy must be in deficit.

But for governments, it isn't just about economics. The forementioned makes no sense to the average punter - they understand that it is prudent for their household to balance it's budget and they simply extrapolate that up, logically assuming that if it is good for their household, it must be good for the government and anything else represents incompetence. The inescapable sectoral balances of the economy are not broadly understood by the electorate. For this reason, the risk of being rejected by the misinformed voters for failing to deliver a surplus have been considered very high. Swan has bowed to the inevitable and further, has refused to drive the economy into recession simply because the electorate do not understand the consequences of what they think they want. The coalition's position appears to be rapidly changing to an each way bet - if it transpires that the public will accept an ongoing government deficit, their continued promises to deliver a bigger surplus are going to look seriously out of place.

[IQS.RLOW]

So in summary your position is
ALP deficit= good
ALP surplus= good
ALP promise surplus but fail= good
ALP shoddy economic performance= good

Lib deficit= bad, should have had more
Lib surplus= bad
Lib good Economic performance= bad

...goodo

[Leftwinger]

You can read whatever you want to read into it IQ.

Your little summary is probably fairly similar to the coalition's present position: surplus=good, deficit=bad......unless it turns out that the electorate accepts Labor's approach, in which case they'll do an about-face. In the meantime, they'll keep licking their finger and holding it in the air.

[Rorschach]

Well it's probably better to check the wind direction than to piss directly into it all the time.

How many more lies, failures and stuff ups are you going to accept before you'd consider not voting for them?

[IQS.RLOW]

Well it's probably better to check the wind direction than to piss directly into it all the time.

How many more lies, failures and stuff ups are you going to accept before you'd consider not voting for them?

The 'true believers' would excuse or ignore babies being raped and eaten from the ALP. Like all leftards, it's always someone else fault. Their concept of personal responsibility is non-existent.

Good luck with ".unless it turns out that the electorate accepts Labor's approach".
The electorate doesn't like failures

[Leftwinger]

The electorate doesn't like failures

So if the electorate ditch Labor for failing to produce a surplus and install the coalition.........what will Hockey and Abbot do then? Unless some exogenous factor/s radically changes, they're going to struggle to produce a surplus and will only squeeze the economy if they try.

You can see here how after a long detioration that began with the dawn of the neo-liberal economic period (and actually going negative at one point during Howard/Costello), the household saving ratio has jumped back to something resembling it's long run average....



While households remain this prudent, consumption is not going to be able to drive a surplus. Since the GFC stood things on their head, the government have been banking on a return to the rates of consumption growth seen in the decade leading up to the crash. I'm sceptical that it will happen and the government have also now accepted this.