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Macro Economics Articles

Revealed: the true cost of our stimulus spending

Spectator 7/5/20: Relative to GDP Australian government spending to address COVID-19 has been among the highest in the world. The Morrison government seems pleased to have been a world leader in mortgaging the future to combat the crisis. Its package, totalling $320 billion, comprises five elements: • The PM’s initially announced health spending $2.4 billion • JobKeeper and JobSeeker business support $168.78 billion • Credit support $125 billion • Access to superannuation $0.876 billion • Inco

The Lockdown Strategy Called to Account

Quadrant 7/5/20: Writing in The Australian, Janet Albrechtsen has pointed out that the statistical value of life used in regulatory assessment is $4.9 million for someone expected to live another 40 years — $213,000 per year Such measures are income-dependent; in the US the value was put at $9 million and a 2012 study for Turkey put it at five and a half years per capita income or $59,000. Such measurements offend self-righteous claims that “every life is priceless” but such notions, if follow

The COVID lockdown and spendathon – was it worth it and what is to be done?

Catallaxy Files , 7/5/20: I have a piece in Quadrant where I estimate the person-years lives saved in Australia at 80,000. Each person-year is worth, on the government’s data, $219,000, hence saving is quantified at $17 billion. The cost in outlays and lost production I estimate at $235 billion, fourteen fold the benefits in lives saved. If however the initial health experts estimates of likely deaths without a lockdown had proved accurate the value of the lives saved would have been $526 bil

Does the Morrison government have the skills to lead us out of the recession it has created?

The $320 billion in costs the Australian government has incurred to sustain and stimulate the economy in light of the COVID-19 crisis is money spent for consumption without it attracting any corresponding production. It is a permanent loss that can only be retrieved by increased production. Two areas where reform could compensate for this loss of revenue are the cessation of wasteful spending and regulations in water and energy, where total savings of $50 billion are available. But in addition

ScoMo’s gone as crazy as Kev, but we can still save the economy

When the Prime Minister and Treasurer appointed Stephen Kennedy as the Treasury Secretary, they opted for a bureaucrat who had been the architect of Turnbull’s potentially disastrous carbon tax. They would also have known him to have been a senior adviser on Kevin Rudd’s exorbitant spendathon following the 2008 global financial crisis. Unsurprisingly, the Secretary of the Treasury recommended that the government implement a “Full Rudd” coronavirus program, suggesting the British approach was ins

Emergency Measures in Need of an Exit Strategy

Quadrant, 25 March 2020: It started with Mirko Bagaric in The Australian — “Release super to boost economy” — who, while justifiably railing against the superannuation funds’ fees, argued that allowing people to access 10 per cent of their super could inject up to $300 million into the economy. Mirko has separately suggested that the actual amount might be $150 billion. Treasurer Josh Frydenberg has accepted a watered-down version of this, which he thinks might inject $27 billion into the econ

Coronavirus: Pump-priming is economic folly

The Australian, 17 March 2020: In normal times we have a healthy disdain for the insights and capabilities of our political leaders. In Australia, the commentariat has just emerged from agendas that blamed them for not acting fast enough to combat the bushfire crisis — even having contributed to it — and from looting taxpayer funds to curry favour with voters in the sports rorts saga. In the US, half the population thinks their President is so corrupt that he should be placed on trial.

How to Make Things a Whole Lot Worse

Quadrant Online, 17 March 2020: Deaths from coronavirus were up yesterday (March 16) on the previous day. Although death rates lower than one per cent are being quoted, the macro data (deaths/deaths-plus-recoveries) is 8 per cent, and 15 per cent in Australia (see the chart below). Hopefully that will improve. Otherwise, if Angela Merkel is correct in estimating that 60 per cent of humankind will eventually contract the disease, we can expect over 300 million deaths. Tomas Pueyo’s brilliant an

The flagging economy, its causes and remedies

Catallaxy Files, 22 November 2019 - Keynesian policy lever pullers at the RBA and Treasury, as well as the Opposition, have been urging the government to inflate the economy. Some are calling for deficit spending, others are urging tbhe authorities to force interest rates even lower than the current barely positive levels. Even if ignorant of the impossibility of pump priming economies, it’s almost as if they have never seen the evidence of failures of such moves that are observable from curren

Regulatory attacks bringing a sad demise of the Australian economy

Catallaxy Files,4 September 2019

US economy surging in spite of some economists’ despondency

Catallaxy Files, 28 January 2018

Lower Corporate Taxes and We All Benefit

Herald Sun, 24 November 2017

Future prosperity and can we attain it?

Catallaxy Files, 22 May 2017

Foreign investment curtailments add to our self-harm

Catallaxy Files, 16 September 2016

Labor’s media releases: the Bills keep mounting

Catallaxy Files, 16 May 2016

‘Labor lite’ Budget undermining a nation’s wealth

Herald Sun, 12 May 2017

Income growth griding to a halt for many

Herald Sun, 2 October 2015

A prosperous economy needs a balanced Budget

Herald Sun, 4 September 2015

That was the recovery that was

Published on Catallaxy Files, 25 August 2015

Robust measures needed to counter economy's frailty

The impossibility of growth without investment and auguries for Australia

Published on Catallaxy Files, 9 June 2015

Spending Like There’s No Tomorow

Published in Quadrant Online, 12 March 2015

Industry policy shmindustry policy

Catallaxy Files, 21 October 2014

The Never Ending Recession

Catallaxy Files, 12 October 2014

Taxes are no substitute for savings

Australian Financial Review 29th April, 2014

Take control of your business

Herald Sun 7th February, 2014

Why we must save more and the government must spend les

Australian Financial Review 20th November, 2013

Every glimmer of economic hope has a sting in its tail

Herald Sun 12th July, 2013

Tough task to rein in spending and regulation

Herald Sun 22nd March, 2013

We could have a stronger economy

Australian Financial Review 8th January, 2013

Regulations that worked in 1901 do not work now

Herald Sun 19th October, 2012

State debt will rise despite budget cuts next month

Herald Sun 6th April, 2012

It's time to bring back the thrift

Herald Sun 10th February, 2012

Energy costs, labour power block road to productivity

Herald Sun 22nd July, 2011

Stimulus over, time for Rudd to rein in spending

Herald Sun 28th November, 2009

Jobs, living standards run second to other goals

Saturday Herald Sun 31st October, 2009

Modelling based on pure fantasy

The Australian Financial Review 5th October, 2009

Rudd team intent on wronging lots of what's right

Herald Sun 3rd October, 2009

Deficit failures condemn us to sluggish growth

The Saturday Herald Sun 22nd August, 2009

The long and winding road

ABC Unleashed 27th July, 2009

Profligate policies put us back in the firing line

Herald Sun 27th June, 2009

Spending the savings will not help in long term

Australian Financial Review 6th June, 2009

Henry's upside-down economics

Australian Financial Review 21st May, 2009

Debt spiral

ABC Unleashed 13th May, 2009

Recession: Rudd's year of denial

Australian Financial Review 22nd April, 2009

Budget will put Brumby's efforts to the test

Herald Sun 18th April, 2009

An FDR future with muddleheaded Rudd

Herald Sun 4th April, 2009

Solutions to perfect storm remain off the radar

Herald Sun 21st March, 2009

We can't spend our way out of this one

Australian Financial Review 17th March, 2009

Even FDR was keen to slash pay packets

The Australian 25th February, 2009

Rudd's plan a dead weight on the future

Herald Sun 7th February, 2009

Very little gain, lots of long-term pain

Australian Financial Review 4th February, 2009

Recovery lies in savings and public sector wage cuts

The Australian 14th January, 2009

Throwing good money after bad

Herald Sun 12th January, 2009

Spend cure the wrong advice for us

The Age 18th December, 2008

Labor always unravels prosperity

Australian Financial Review 17th November, 2008

Tough times call for tough measures

The Herald Sun 15th November, 2008

Depression logic pushes fast cash into the economy

The Age 23rd October, 2008

Forget intervention, let the correction do its job

The Australian Financial Review 10th October, 2008

Bet your sweet bippee it's a crisis

Herald Sun 20th September, 2008

A liquidity crisis we had to have

Australian Financial Review 23rd April, 2008

Rate medicine might cure nation's spending binge

Herald Sun 9th February, 2008

Rate rises will not work in isolation

The Age 1st February, 2008

Brumby solid in first quarter but some risky signs

Herald Sun 17th November, 2007

Populist fads keep Victoria in the shade

The Herald Sun 2nd December, 2006

A Deal for our Future

Herald Sun 10th February, 2004

Polish on a Rough Trade

Herald Sun 16th March, 2002

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