Access economics says recession is over

[Leftofcentresalterego]

OK, we have established that it is a fact that the facts tell us that there is virtually no observable relationship between the governments debt position and interest rate movements. There are some years where rates and debt position appear to move in tandem. But most of the time they move in all directions without any sensible correlation at all. There appears to be no one decade in our interest rate history where the assertion "government borrowing pushes up interest rates" is supported by what actually happened.

What is remarkable is that we all knew only a couple of years ago that this likely a false assertion - because we were living the opposite reality. From 2001 we all watched government debt go down,down,down year after year while at the same time interest rates went up,up,up. Only a couple of years ago we all watched interest rates threaten to push toward 8% while the government had no net debt at all.

How is it that we could have so quickly forgotten that

The intelligence of the masses is low - but their power of forgetting is tremendous

I disagree with Hitler that the intelligence of the masses is low, but he sure looks to be right about how quickly we can forget. Other tyrants have noted it as well, observing that people are easily controlled because our memories are so short. This is what Turnbull and Hockey are counting on with their "government borrowing will drive up interest rates" cry.

So, what do neo-liberals do when the facts are in complete disacordance with their cherished 100 yr old+ theories? It appears they do not conclude that the theory needs reveiw - instead, they simply conclude that the facts are wrong.

[Sappho]

Lou Jiwei, Chairman of the China Investment Corp.

"It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that."

[Jubial Priest]

OK, we have established that it is a fact that the facts tell us that there is virtually no observable relationship between the governments debt position and interest rate movements.

Rubbish- you have done nothing of the sort except to establish that you are ignorant enough to ignore other forcings

[Howard Stinks]

OK, we have established that it is a fact that the facts tell us that there is virtually no observable relationship between the governments debt position and interest rate movements.

Rubbish- you have done nothing of the sort except to establish that you are ignorant enough to ignore other forcings

What other forcings?

[Leftofcentresalterego]

How are you HS? Long time no blog.

Priest - I don't know what you are on about and I doubt you do either. Since interest rates and government debt are matters of public record, I'm sure you'll have no trouble pointing out where every rise in government debt is accompanied/followed by a hike in interest rates. And yet, as a mortgage holder, I can remember only a few years ago when interest rates were above the RBA's target band and heading north - all the while, government had NO net debt. Go further back and you see that most of the time, debt and rates are not moving up or down together as neo-liberal theory argues that they do. They are regularly moving in opposite directions.

I have many opinions but that is not one of them - that is recorded fact.

So tell me Priest - since you obviously think that the facts are wrong, why don't you explain to me exactly why government debt necessarily pushes up interest rates? In layman's terms, what are the mechanics that drive this supposedly inevitable occurence that simply isn't borne out by the facts or even recent memory?

[Leftofcentreisadipshiit]

Correlation does not equal causation and visa versa dipshit. You are the only one who is trying to draw a picture by playing dot-to-fucking-dot

[Leftofcentresalterego]

The picture that the facts - not I - draw, as you will see when you go and veiw them for the first time is that there is no picture to be drawn. There is no correlation between government debt levels and interest rate movements.

This is a problem for the stock standard neo-liberal argument - they insist that a rise in government debt will push up interest rates when the facts tell another story altogether. The facts tell us that following a rise in government debt, interest rates will either rise, or fall, or stay the same. In other words, they might do anything or nothing, regardless of the level of government debt.

I notice that you have given no indication that you know anything about interest rate movements, not even just before the GFC nor that you have any idea why neo-liberals think something that has no basis in recorded fact. I think you should just go back to your internet porn and stop wasting bandwidth.

[JW Frogen]

Stimulate my penis and Australia will become a world power.

I can promise the people that.

That and a platypus party in every pot.

[Leftofcentreisadipshiit]

No, it is a picture that you draw by building a pathetic strawman argument while invoking the term "neo-liberal"

If you think that govt spending will have no effect whatsoever on interest rates then you are more delusional than your daddy was when he forgot to wipe you on the curtain

[Jovial Monk]

Can always tell when you are debating with LOW_IQ: the stupid soon turns to insults.

Since nearly all the govt borrowings are from overseas there is no reason for them to affect interest rates in Australia.

Neoliberalism ruled for a decade, so it is no strawman argument. Have you thought about how Tip's structural budget deficits turned into actual cash budget deficits and caused nearly all the debt? And that Rudd & Swan's prompt action averted hundreds of thousands of job losses & company failures and so reduced the total govt debt needed? Didn't think so.