The budget

[Rainbow Moonlight]

Your Christ on a bike is the same cross as the financial industry crucified us on.

Once again, you cannot create real economic value without real economic productivity. Be that the financial sector or the government. You can not print your way out of this.

An unusually communist point of view for you Frogen?

[Jovial Monk]

Karl is Froges' pin up boy!

[JW Frogen]

Your Christ on a bike is the same cross as the financial industry crucified us on.

Once again, you cannot create real economic value without real economic productivity. Be that the financial sector or the government. You can not print your way out of this.

An unusually communist point of view for you Frogen?

How so, even so Jesus had to work to turn water into wine. Indeed he had to die on a cross?

Nothing is free or equal in this world. Nothing.

[Leftofcentresalterego]

If one prints in extreme excess of the productivity rate

Implicit in the term "extreme excess" is my point. Exactly what % of GDP would you consider extreme excess? 1%? 2%? At the peak of the boom just turned bust, unemployment still stood at 4%. This does not count underemployment - those who desire to work more hours but are unable to secure them (Australia has long had a very high rate of casual, part-time and temporary employment). Total labour under-utilization stood in the realm of 8-9%. The economy has a greater capacity to utilize increased financial assets injected through increased government spending than you are allowing. I must stress again that I am not advocating spending 50%+ of GDP over and above what the government removes through taxation each year just for the hell of it.

You still don't seem to have proposed how the medium of exchange which is totally necessary to facilitate the smooth exchange of a massively complex array of goods and services, is created. How is it that this economic expansion continuously creates the currency with which to perpetually fund itself, minus the currency monopolist?

People will not just give their economic productivity away for magic paper the government prints

Wrong!! You are overlooking a critical fact - the magic paper the government prints (Australian dollars) is the one and only medium with which you may settle your tax obligations to the federal government in. You may barter or accept anything else as a medium of exchange between private individuals but in order to pay your taxes, you MUST accumulate the governments own currency of issue. You are not allowed to work or do business here if you do not. See how this immediately creates demand for the otherwise worthless currency the government issues. And again note that since the government issues the currency that everybody else uses, it is not revenue constrained so worries about future debt are largely groundless so long as the debt is in Australian dollars. The government can always pay it. Always, always, always and even always.

And you still have not explained why 3 decades of straight federal deficits run by governments both left and right was such a golden age of high growth and extreme low unemployment.

[Jovial Monk]

Not really the right thread, but I'll put it here anyway:

"I will not be surprised to see world trade stabilize, world industrial production stabilize and start to grow two months from now," Krugman told a seminar.

"I would not be surprised to see flat to positive GDP growth in the United States, and maybe even in Europe, in the second half of the year."

Global recovery could come about through more investment by major corporations, the emergence of a major technological innovation to match the IT revolution of the 1990s or government moves on climate change.

"When the Europeans probably follow suit, and the Japanese, and negotiations begin with developing countries to work them into the system, that will provide enormous incentive for businesses to start investing and prepare for the new regime on emissions... But that's a hope, that's not a certainty."

http://www.reuters.com/article/newsOne/ ... 0L20090525

Krugman has been negative about Obama's economic policies so this is quite a revise.

Note that 'emergence of a major technological innovation' which in Oz would be the NBN and the applications that will be developed to take advantage of it, just like peer to peer file sharing (i.e. music piracy) was the application that saved broadband after the dotcom bubble collapsed. And hopefully renewable energy on a major scale would also kickstart the world economy.

[Jovial Monk]

Here is hoping the Chinese & world economy recovers real soon:

Treasury officials in Western Australia say the state could lose up to $240 million in revenue next financial year due to falling iron ore prices.

Rio Tinto subsidiary Hamersley Iron has accepted an average 37 per cent reduction in a major contract with Japan's Nippon Steele Corporation.

It is estimated the revised deal will cost Western Australia $135 million in lost royalty revenue.

The Under Treasurer, Tim Marney, has told a Budget estimates hearing that if Chinese steele makers are able to secure similar contracts, the cost to the state could blow out to between $210 million and $240 million next financial year.

http://www.abc.net.au/news/stories/2009 ... 582315.htm

Not even Sheepy now denies there was a mining boom and not many now deny the Fibs blew the record tax revenue (as well as fucking up the make up of tax revenues.)

So, the WA state govt may run a budget deficit this financial year, bet they blame it on the GFC, not reckless spending eh?