If you can believe the current polling, it tells us that most people rate the economy as one of the top three issues in this election. They rate it highly but in reality, they know very little about it.
The average voter understands the economy in the narrow corridor of his/her own circumstances; the mortgage, household bills, savings, credit cards and the like. They also know we borrow as a nation, but few would know how it is done.
But ask them how much the nation owes or what is net debt or do they understand the principle of the three sectoral balances and all you get is a blank stare. Ask them to explain what the automatic stabilisers are in an economy and you might as well whistle Dixie.
They have been clouted from ear to ear by the conservative side who have railed against Labor’s track record on economic management, yet the Coalition has performed abysmally in that area, themselves. Such is the power of a prejudiced media that most people cannot be convinced Labor do it better economically.
The greater reality, however, is that both major parties have got it wrong. Really wrong!
Economics Professor Bill Mitchell of the University of Newcastle and founder of the Centre for Full Employment And Equity (CofFEE) travelled to Spain on a lecture tour recently and while there produced a 15 minute video that ought to be mandatory viewing for politicians and voters alike.
The questions asked of him in the interview are in Spanish, but his answers are so clear and precise, you don’t need an interpreter. He explains in simple, easy to understand language why deficit spending is necessary and good for our economy.
The video is presented here. It needs no further introduction other than to recommend that all who watch it, share it with those who, you know are ignorant of the power of a currency-issuing government.
It might be asking too much, but perhaps those who watch it and rate the economy as an important election issue will have learned something and have reason to query how our politicians could be so naive as to think spending cuts lead to prosperity.
They might come to understand that the strength of our economy lies with people working and producing goods and services; that underutilised resources are a drag on our capacity to lift living standards.
Then again, they may not.
