Access economics says recession is over

[JW Frogen]

So Froges, still think govts don't create jobs?

owth.

No, long term they don't, because they have to tax long term private sector job creation to create short term stimulus jobs, they have to spread the tax through a beauracracy to create jobs taking from others who would invest long term.

Now, in a serious economic emergency that may be a good idea in the short term, but there is a bill, it will come due.

Lucky Howard left Labour a surplus hey?

[Leftofcentresalterego]

So when will this bill be coming due Froges? When will the economy disintigrate because of the deficit spending. You need to come up with an answer because Turbull needs one.

Lucky that governments never ran long term deficits because everything would have quickly collapsed - oh wait - they did. Nearly every single budget for almost 3 decades in this country. And unemployment averaged 2.5% the whole time. And growth and nation building went ahead. And inflation did not run away and eat everyone's babies.

And you still seem to be having trouble with the fact that neither surpluses nor deficits give federal government in our modern monetary economy any more or less capacity to spend their own currency of issue.

I got over the fact that Soviet-style communism doesn't work. One day, you too will get over the fact that neo-liberal macroeconomic reasoning is faulty, flawed and has little relevence to how a modern monetary economy actually functions. In the meantime, the reality of events will continue to overtake such theory.

[Leftofcentresalterego]

I have no idea what the fuck I'm talking about most of the time. I wrote that above when I was stoned.

[Leftofcentresalterego]

I also have a nice little treasury paper on Aust govt debt history (I'll dig up a link if you don't believe the figures I qoute) that shows net debt back as far as 1970 and gross debt back to almost 1900.

The current projections are for gross debt to peak at around 21% of GDP in 2014. Compare that with a gross debt of 125.5% just after WW2. And yet here we are, all still here. And the several decades following that debt saw a golden age. We did not collapse or even go backward. We went forward in top gear.

It's sad how many people even on the progressive side have believed the neo-liberal brain washing that public spending is bad (while the private sector hokking themselves in debt to the eyeballs is presumable good).

Anyway, I'm off to the beach for the weekend to relax and drink piss. I'll be thinking of you

[Jovial Monk]

Big article on state of economics

Also: http://1.bp.blogspot.com/_OKdf8I_bxhI/S ... p+swan.JPG

[JW Frogen]

I am not a neo liberal economically, as I have written time and time again, and do not believe government debt is always bad if it is contained in relation to projected future revenue and productivity but your pollyanna assertion the debt never comes due and never has to be paid for by anyone ever is just false.

Already there are warnings that interest rates will have to go up in order to contain the inflationary pressure the Labour debt has incurred and of course taxes will have to rise or that debt be passed on to future generations to service.

As for higher debt ratios in the past, in the past Australia actually made things and was a net exporter, even with our dumb resource luck we no longer do, we import more than we export, we consume more than we produce so the ability to service debt is reduced by our reduced productivity.

Now I do not think Labour went overboard, given the nature of the emergency their debt is not that large (thanks in large part to Howard's surplus) but it does come at a cost and it is not how economies grow long term, long term the private sector investment creates growth and ironically gives government the tax base in which to play with debt and surplus.

[Jovial Monk]

I don't say the debt never comes due, that is Lefty.

I don't think taxes need to be raised to repay the debt. As the economy recovers tax revenue increases and dole payments decrease and the debt can be repaid. Without the stimulus I think the debt would be higher as more business would be running at a loss or have failed and dole payments would be sky high.

Re tax, there will need to be adjustments to remove Costello's structural (and now cash) deficit. I hope the Labor govt doesn't take the easy option there of running structural deficits forever.

[JW Frogen]

I don't say the debt never comes due, that is Lefty.

I don't think taxes need to be raised to repay the debt. As the economy recovers tax revenue increases and dole payments decrease and the debt can be repaid. Without the stimulus I think the debt would be higher as more business would be running at a loss or have failed and dole payments would be sky high.

Re tax, there will need to be adjustments to remove Costello's structural (and now cash) deficit. I hope the Labor govt doesn't take the easy option there of running structural deficits forever.

I know, I was responding to Lefty.

I actually agree with your post I think Rudd had the stimulus just right, stem the emergency but keep a debt at levels that will not serverely tax future productivity or be too inflationary.

Now he seems to have put a break on the spending, only time, tax and inflation will tell us if he did it just right.

[Jovial Monk]

Job ads surged in August and signs that job creation has turned a corner will bring hope to graduates in the class of 2009, a survey says.

The Olivier Job Index, which measures positions vacant ads on commercial job sites, grew 2.43 per cent in August, the first real growth since May 2008.

"Job creation has turned a corner," Olivier Group director Robert Olivier said.

"We won't know when we'll see a net increase in employment, but for job seekers this is a welcome change."

The graduate job index rose 30.3 per cent, offering renewed hope for students about to enter the workforce, he said.

"Although it is still down 59 per cent on a year ago," Mr Olivier said.

"The big graduate employers, major law and accounting firms, didn't recruit on campus earlier in the year as they usually do.

"At that time they waited to watch the economy.

"Now they're back in the market."

http://news.theage.com.au/breaking-news ... -fcie.html

Can't get a better sign then that that the recession is about over. Note the low level the gains come from tho.

The Fibs are stupid, can't keep a sustained argument going. If the govt has to be concentrating on "jobs, jobs, jobs" then they should phase out stimulatory spending as the unemployment level goes down and down. Cutting spending now would be stupid, undoing all the good the spending has done to date!

Because Labor has done very well managing the economy and prevented the GFC cutting deep into activity & jobs this years actual deficit and the total debt will be MUCH less than predicted. Sloppy Joe should shut up about debt & deficit!

[Leftofcentresalterego]

Good article by Krugman there JM.

I agree with the cut and thrust of it - notice it echoes the sentiment that most people have been seduced into accepting at least the basics of neo-liberalism as I have argued.

Also, on page 6 it asserts that deficit spending puts DOWNWARD pressure on interest rates as I have also argued, although he doesn't elaborate on why just as Frogen doesn't elaborate as to why he thinks it has the opposite effect. The RBA still has control over setting official rates here because monetary operations have been conducted to allow this.