Tag: Keynesian economics

Interest rates and the deficit

What can you do if Australia has the most incompetent central bank in the world? That they have raised interest rates in the midst of an election is the second time it has thrown in its lot with Labor, as it did in 2007.

Of course, the problem really is that it has waited this long to do what has been an essential for quite some time. Let me remind you of this which is in no sense at all unrelated to rising rates of interest: Victorian state budget: Daniel Andrews government spending splurge as debt heads to $167.5bn. Labor steals from every constituency it gets to govern. The article is mostly about how Labor blames the Federal Coalition government, but I blame it on the phenomenal level of economic ignorance, which begins with the economics profession and continues from there across the entire community who are so grateful to see the level of demand being maintained. The level of supply, not so much, but who really cares anyway?

Keynesian stupidity is now so embedded that it would be very rare economist in May who has any sense of the devastation of governments indulging in one unproductive and loss-making project after another.

There was a time when a community would understand that with a more or less fixed resource base, the more the government spends the less available for the rest of us. They would also have understood, perhaps only dimly, that governments cannot manage productive forms of enterprise. This at the very end of the article really sums up what is going on:

Mr Pallas attributed most of this sum to the West Gate Tunnel project, which the government recently revealed would cost an extra $4.1bn and open three years late, in 2025.

Among the responsibilities of the 500 new cops will be helping to raise millions more in speed camera and on-the-spot fine revenue, which is expected to jump 16.4 per cent next financial year alone, from $615m in 2021-22 to $716m in 2022-23, and $829m over the forward estimates.

The government is desperate for money to cover the massive debts it has wracked up. Until they are permitted to sell the State to the Chinese via China’s Road and Belt “initiative” they are going to have to cover their debt from the only source available, from the people who live within the State. However, once we have a Labor government federally, the competition for your money will intensify exponentially. And this, I remind you, is the pre-election budget. Just wait till you see the one next year when they have four years till the next election.

As for the increase in rates of interest, a mere pin prick in the midst of all the rest but it will be the only issue that anyone will pay attention to.

The Greatest Fraud in History

Came across this: Wall Street analyst: COVID vaccines ‘greatest fraud in history’. This is the point:

Dowd and a Wall Street insurance analyst with whom he has teamed, concludes the CDC data show the Millennial generation suffered a “Vietnam War event,” with more than 61,000 excess deaths from March 2021 to February 2022.

That is more than just fraud, but mass murder if it’s true. But so far this only in my view makes it to second place. Above it is Global Warming about which I received a note today which said this:

Pursuing a Net Zero by 2050 target will jeopardise our energy independence and national security and raise the cost of living for mainstream Australians without making any discernible impact on global temperatures.

I see phrases like this all the time: “without making any discernible impact on global temperatures” as if this is a real problem that needs to be solved but we are perhaps either not doing enough or doing the wrong thing. For myself, the entire issue is a fraud. There is no problem that needs solving. There will be enormous costs across the world but nothing will be achieved since it is a non-existent problem, much in the same way as I think about Covid. This is not the return of the Great Plague, in the same way that Global Warming hysteria is not directed at an actual problem that is in need of solution.

The Number One fraud, to me, is and has been for a long time, modern macroeconomic theory with its fundamental equation learned by every socialist in their first year in economics: Output is the sum of Consumer Demand [C], Private Investment [I] and Public Spending [G]: Y=C+I+G.

So if there is unemployment then all the government needs to do is increase its level of spending [G] and the problem is solved.

The inflation in the US followed by the eventual collapse in its economy will demonstrate just how insane – and also fraudulent – this policy is. Trillions have been wasted over the years in pursuing this agenda with no success at any time ever in history anywhere.

But while the cretins who are funding their own lives along with their mates will do very well out of it, the rest of us will need to scramble just to stay ahead of the pack. See Venezuela (and Cuba, and the former Soviet Union) for examples of just how disastrous such policies can be.