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Election 2016: Some Economic Myth-Busters

A Happy New Year to everyone and in case you have forgotten, 2016 is an election year. Regardless of one’s personal preference for a conservative or progressive victory in that election, there should be at least one more immediate concern.

Irrespective of our political preferences, we should all be informed and be informing of, to as many voters as possible that, in terms of the economy, much of what they will hear from both conservative and progressive candidates leading up to the election, will be false.

What you will hear from them is myth. And my special interest in this election is to bust as many myths as I can, before we go to the polls. So let’s start with the biggest myth-buster of all:

Myth-buster No 1: Taxes do not provide the revenue which the government needs in order to pay its bills. That’s right. TAXES DO NOT FUND SPENDING.

The necessity for a government to tax in order to maintain both its independence and its solvency is only true for state and local governments and those countries that comprise the Eurozone, not for sovereign currency issuing national governments such as we have in Canberra.

bills State and local governments are similar to a household in the sense they face financial constraints on their spending. They cannot issue currency from thin air. Only the Federal government through its central bank (in our case the RBA) can do that.

State and Local governments have to raise funds before they can spend. Yes, they do have the power to tax, something households do not possess. But this is merely substance, not form.

Myth-buster No.2: A currency issuing government does not need to borrow to fund its spending.

So when you hear a politician say, “we have to live within our means” or “we can’t continue to borrow or we’ll go broke”, he/she is either lying or ignorant. Or quite possibly both.

Myth-buster Number 3: It is entirely within a currency issuing nation’s capacity not to tax at all. All government spending can be accommodated issuing its currency out of thin air. Taxation, nonetheless, is a necessary component of a fiat currency.

While being a necessary tool to give a currency value, today, taxation is just one economic tool used by government to control inflation by removing excess money from circulation.

Myth-buster No. 4: Issuing currency out of thin air, is, of itself, not inflationary. The most recent examples of US bank bailouts, and QE in the US, the Eurozone and the UK demonstrate this to be true.

Myth-buster No.5: Full employment, i.e., a job for everyone who wants one, is not a myth. It is what underpins a nation’s full capacity to produce goods and services that people all over the world want to buy.

train Myth-buster No.6: Any person claiming that measures such as these are likely to cause economic collapse, create widespread poverty, wars, pestilence and the end of capitalism and therefore mankind as we know it, is either lying or ignorant or both. These measures do the opposite.

Myth-buster No.7: Unemployment can be as yesterday as a Windows 95 operating system. Government can provide a job for everyone who wants one, with a living wage to boot. It has the all the resources necessary to restore equal distribution of wealth, create opportunity and consequently, raise living standards.

What does all this mean in the context of an upcoming election? It means that politicians who claim that such projects as the NDIS, the NBN, the education of our children, the provision of a state of the art health system, an inter-capital city fast rail or the capacity to care for the aged are all subject to spending constraints, are lying to you.

Any politician who says austerity is necessary to balance the budget, is lying to you.

Any politician who tells you that such measures will cause a spike in interest rates or that interest rates and inflation will spiral out of control, is either lying, is ignorant or both.

All these projects can be funded without taxation revenue and without the need to borrow. Furthermore, any politician who suggests that reducing unemployment is conditional upon the private sector recovering, is also lying, ignorant or both.

Any politician who tells you that such measures will bring about an end to world stock markets, currency trading, derivatives, bond issuance and other such gambling houses is also lying, ignorant or both.

Rumi In the words of Beardsley Rumi, former Chairman of the Federal Reserve Bank of New York, when he addressed the American Bar Association in 1944:

“Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity.”

Anyone who disagrees with any of the points raised above, is either trying to protect the already shattered integrity of the neo-liberal economic framework that began in 1971, a framework that protects the wealthy at the expense of the broader community or, they are ignorant and blinded by their own wealth creation goals.

lying This is the message that should be spread, as far and as loud as possible, throughout 2016, pre and post-election. And you will hear it from me, relentlessly.

So, if those who take up the challenge are successful, at least, on this occasion, when we do go to the polling booth to cast our vote, we will be better informed and aware of who is telling us the truth and who is not.



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  1. Kaye Lee

    “At every turn, the options presented simply presume that it is the ordinary citizen who should sacrifice in the name of the gods of economic management – whether that be through cuts to wages, key services such as health and education, or via an increase in that most regressive of taxes, the GST – while corporations are given a free pass in their relentless pursuit of tax and wage minimisation.

    All this means we are way past the point of merely worrying about broken election promises.

    What is being trashed now is the social contract itself, the founding promise of democratic society that says a government will manage things in the best interests of the many, not just the few.”

  2. diannaart


    I have read many of your articles and agree with much of what you present.

    I fully get that Austerity Measures are what are applied to the powerless when the powerful stuff up.

    I just can’t get my head around printing money without an equivalent backing value , yes, I think that’s what Rudd did in the GFC and to a less successful extent by Obama to the big banks (but we know no one has learned from this and the stuffers-up are still calling the shots. I get the economics of state and local government – that is familiar to all.

    But, are you saying the LNP is correct in that we don’t need taxation at a Federal level? If this sounds completely stupid well then colour me dim.

  3. John Kelly

    Diannaart, in the very technical sense, yes, we do not need to be taxed at a federal level. We choose to be taxed as a means of government having some influence over the money supply. Too much equals inflation. Too little equals recession. However taxation’s main purpose is to give our currency value. It’s citizens must pay their taxes in Australian currency. Therefore our currency is in demand. But taxation is only one tool used in controlling inflation. Treasury bonds and placing limits on bank credit are two more. The great lie by politicians is that we must tax to gain revenue to spend. That is an utterly false claim. All federal spending happens ‘out of thin air’. The RBA pays all government bills without reference as to whether there is enough money in their account. The RBA would never bounce its own cheques.

    The equivalent backing value is our ability to produce goods and services that we and the rest of the world want to buy, i.e. Our GDP.

  4. Sven the Barbarian

    I struggle with the statement that printing money does not cause inflation – economics is a complex thing (and I am not implying that politicians are a special class of superhumans that understand and can manage it), but if the central bank prints money to pay its bills (or to loan cheap to their friends the bankers so they can make mega bucks), and the supply of money increases, that would devalue the currency against other currencies, which would mean every industry that touches foreign supply, or any goods that are in any way sourced from overseas, will increase in local price, meaning these industries, and anyone who relies on these industries, and anyone who wants to buy items in any way sourced from overseas, will be asking more for their services in local currency, ie inflation?

    Over history, printing huge amounts of money has often been the last stage of a countries demise into serious recession. If you go to Wikipedias history on inflation:

    And search for “print” you will see a few examples of times when printing money was directly linked to runaway inflation

  5. Matthew Oborne

    Yes the very idea that we can grow would not exist if we couldnt make money out of thin air, the world would have a finite and fixed amount of money if it was not created.

    If banks only made 2-3 percent on the money they held then they could not make billions in profits as it is mathematically impossible.

    One would naively think governments have an obligation not to make false constructs for the general population to swallow but then again we went from recognising working for a wage as wage slavery to everyone deserves a job, leaners, lifters and poor choices.

    We went from councils needing our approval to us needing theirs.

    we went from landholders having a right to water tp water being a commodity.

    we went from public services to the market dictates. (putting us under the dictatorship of capitalism)

    we went from loyalty being a concept to now being a card.

  6. bossa

    In a sovereign FIAT currency based economy the money is supplied with the game (i.e. Monopoly) and the bigger the game the bigger pool of money. FIAT currency (money by decree), and because it’s not backed up by limited amounts of precious metals, has a value determined both by the amount of money in the system and the productive capacity of the economy.

    People just can’t seem to get their head around the fact that FIAT MONEY HAS NO INNATE VALUE in this system. (Seriously, the economy is a game of monopoly and the money is just the same)

    When conservatives gain control and they promulgate their “We’ve got to live within our means” and “We’re running out of money” propaganda people panic and fall into line allowing these robbers to transfer our wealth to banks and corporations at will. Mention debt and people get crazy and very angry. They think of the government as a household living on credit, which is utter crap.

    To the people mentioning that printing money causes the country to collapse: That is a line pushed by the banks (and henchmen politicians) so that they can maintain their stranglehold on our assets and resources. In a sovereign issued FIAT currency system it is paramount for the government to be the only institution issuing money, unless the banks buy it from them, otherwise banks can overload the system and destroy the balance, thus causing hyper inflation, and again, allowing firesales from which they, and their clients benefit.

    Most of the major economic collapses that have occurred in the past 200 years have happened because European banks stopped the money supply and called in their debts. This allowed the banks to take both the gold, resources and assets of countries, causing depressions.

    FIAT money is different than money backed by gold. Gold reserves limit the capacity of the currency to work on behalf of the people, hence the reason it was decoupled in the early 70’s, which coincides with the vicious neo-liberal agenda that has plagued the world since. They won’t give up without a fight and they have their foot soldiers, the LNP to gut us on their behalf.

    The Rothschild family is purported to be “worth” $500 TRILLION – you don’t get that kind of money by being fair and nice.

    Any system that allows that whilst billions are starving needs to change.

  7. Matthew Oborne

    There is a documentary on youtube by the BBC I think where they look at what banks and countries claim they hold as gold and much of it simply isnt there anyway.

  8. Florence nee Fedup

    I can’t recall a public holiday let along New Year Day when comments across the internet and MSM have been so numerous. Comments generally slow to a trickle at this time.

    Ley is out, as if it was normal weekday. PM shown up on admittedly good news assignment.

    Can we take it, that people are tuning in to politics once again?

  9. Sven the Barbarian

    When it comes to economic theory such as whether printing money results in inflation there are economists on both sides of the fence, to me it seems logical that when you increase the supply of any in demand commodity, its value per unit will reduce, which in relation to fiat money means inflation. But I accept I could be wrong, and personally it is of little importance to me.

    Wealth disparity and distribution/effective use of resources means more to me, what I see is government action focused more on these issues, with inflation etc used as tools to maintain wealth and power in certain groups, while fooling the majority into working their lives just to get by.

    The original post comes across to me more of an economic opinion piece rather than myth busting .. taking a complex situation such as macro economics and one view as if it were the only possibility, then branding anyone with differing views as lying or ignorant, it seems, well, like the sort of thing a politician would do.

  10. diannaart

    Most of the major economic collapses that have occurred in the past 200 years have happened because European banks stopped the money supply and called in their debts. This allowed the banks to take both the gold, resources and assets of countries, causing depressions.

    I get this because, conversely, I know that banks do not actually hold sufficient wealth to cover if all withdraw everything from banks – they rely upon switching around buckets.

    Also with direct regard to Bossa’s comment, if ownership of farms, businesses, resources and other assets become the sole property of banks – said assets lose value across the community – unless bank managers desire to go and plough the field, or design the bridges – they continue to play a win/lose/lose game – unless there is intervention by government to stimulate the economy to start running again giving value back to the ‘creators of value’ (workers, farmer, designers, builders etc) not the ‘holders of value’.

    The way I see it (and this is why I find difficulty with the infinite money printing machine) is that EVERYTHING is finite. Or have we so removed economics from reality that we can just play Monopoly?

    Hoping this makes sense.

  11. Zolbex

    Well put John. It may be counterintuitive (at first), but it does make sense.

    For every borrower there is a lender. My debit is your credit, if I buy something from you, your bank account will increase, mine will decrease by the amount of the purchase price.

    Theoretically, there is only one source of Australian Dollars: the government, because by definition it is the monopoly currency issuer. We cannot obtain Australian Dollars from China or the Moon. In practice there are two sources of Australian Dollars: from the government through direct spending and from commercial banks when we take out loans (commercial banks create currency on demand). There is a fundamental difference between the two: government spending is an asset to the private sector, whereas a loan is an asset to the bank, a liability for us. In other words, the Australian Dollars obtained by government spending is an asset to us and, by definition, a liability of the government. (Remember, there is a borrower and there is a lender, these assets and liabilities cancel each other out in the big picture called macroeconomics.)

    Some cool old dude called Bill Mitchell is big on language and thinks some of the terminology used by most is misleading. If we, for instance, substitute the word “debt” with the word “liability” we’ll have a clearer picture about how things are being muddled and misrepresented. We could use government liability instead of government debt. So when the government spends, and if it is an asset to us, it would logically mean that our asset is the government’s liability. Or the government’s debt. Right?

    Following any policy announcement the most destructive question one can ask: how are you going to pay for it? That question assumes that the government cannot spend beyond tax receipts, and if it does it has to borrow, therefore it will (further) get into debt. Remember our little discussion about liabilities and debts? What you will hear from politicians of all flavours of blue that government spending will indebt the private sector, that our grandchildren will have to pay for it. In fact the opposite is true. Properly targeted government spending enriches the private sector. Will the private sector leeches ever build a bridge or a rail line? I very much doubt it, they are not prepared to wait the 30-50-100 years until it would turn a profit.

    Finally, I’m glad you have brought up hyperinflation and Zimbabwe. In fact Zimbabwe is the living proof that a government cannot run out the currency it issues. They have printed and circulated One Hundred Trillion Dollar notes. It was enough to buy a bus ticket in the 1990s. Did they run out of money? No, they did not. How does inflation occur? Too much money chasing not enough goods, an excessive amount of money in circulation and not much to buy with it. What did Mugabe do? Smashed the productive capacity of his country and attracted some sanctions along the way. and there you have it, hyperinflation. Are we using all the resources in our economy? The number of unemployed and underemployed says we don’t. Is there room for government deficit spending? I think so.

  12. Bacchus

    That Wikipedia article, while very misleading, does touch on the truth of this Sven – “However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.”

    In better words, growth in the money supply doesn’t cause inflation as long as there is productive capacity in an economy for the increased money supply to buy.

    At the moment with underemployment running somewhere between 14% and 19% (depending on which figures you believe), there is plenty of available capacity in our economy to inject more spending into it.

  13. Wsherlockscottholmes

    We start by arresting the bankers, insurance sellers and miners.

    With those parasites out of the system we can build.

  14. diannaart

    Riiiiight….. oh look… a couple of butterflies outside my window….

  15. John Armour

    “The original post comes across to me more of an economic opinion piece rather than myth busting .. taking a complex situation such as macro economics and one view as if it were the only possibility, then branding anyone with differing views as lying or ignorant, it seems, well, like the sort of thing a politician would do.”

    These are myths and easily demonstrated to be so Sven. We are simply being lied to.

    John posted a link to an article by Professor Bill Mitchell under Myth #1. That would be great place to start if you’re seeking an “under the bonnet” understanding of our monetary system.

    “Printing money” by the way has nothing to do with what we call the money supply and is a descriptor best avoided.

    Talk of printing money skews any discussion about inflation into interminable debates about the Weimar and Zimbabwe hyperinflations, which anyway were caused initially by a collapse of productive capacity, and nothing to do with the money supply.

  16. Sven the Barbarian

    Thanks Bacchus, you are right and I was too simplistic in my response, a central bank printing money does not have to equate to inflation, but it can be a major factor in the cause of inflation.

    If for example the central bank printed money at an excessive level to pay off huge irresponsible spending, I believe the printing of money would be a direct cause of inflation.

    On an economic level I agree with John that the rhetoric from politicians that services need to be cut to balance the books is childish, I don’t agree that printing money should be considered the main solution. I would like to see more focus on reducing wealth disparity, which would strongly involve taxation and regulation.

    I have seen some interesting opinions about how printing money and subsequent inflation services the rich. One was the idea that when the government issues new fiat money it passes into the hands of the bankers and lenders first, because there is a response time between increased money supply and resulting inflation the bankers have control of that newly created money and can invest/spend it during the time its value is high (before the resulting inflation), those funds then filter down to the population but by the time it gets there inflation has kicked in and the moneys value is worth less (and the cycle goes on).

    I dunno, its too complex, the correct way to deal with this would be discussion of different views, assessment of existing evidence, implementation of an agreed upon theory, then most importantly unbiased reassessment and refinement. Like that’s ever going to happen. Even if society wanted to control and change this in the current political system you can’t. If the population did have representation then you would expect tax loopholes to be closed up, but they have been around forever and aren’t going anywhere soon..

  17. Sen Nearly Ile

    Perhaps, diannart, nothing in economics is finite. As a rare traveller it was marvellous a couple of years ago $NZ1.25 and $US1.05 and ultra marvelous 45 years ago when I go 400 yen to a dollar on the wharf and landed in Tokyo on a sunday when they revalued 12.5%. The wealthy families were advised by the bank and bought $us the septics on the sunday devalued by 12.5% band 25% of cash gone.
    As a gambler it hurts to put a$100 in and get $70 credit but soon it will be $US50 to $A100????? Still we may be in Yuan by then.

  18. Pingback: Election 2016: Some Economic Myth-Busters | THE VIEW FROM MY GARDEN

  19. Sven the Barbarian

    I still think much of what was said was opinion, not fact as it is presented. I agree with much of the underlying ideas, but can’t accept the “this is the only truth” tone.

    No.1: “TAXES DO NOT FUND SPENDING” – Why not? I am sure it could if that is what the funds were routed to?

    No.2: seems fair enough.

    No.3: “All government spending can be accommodated issuing its currency out of thin air.” – You could probably get away with funding all spending by creating money, but I don’t think it is the one true path, I am not sure what myth is being busted on this one, that taxes are inevitable? Might be true but I don’t think many people would agree it is the way a modern government should function.

    No. 4: “Issuing currency out of thin air, is, of itself, not inflationary” – might be true, might not be, I am not convinced, too complex and too interwoven with other factors.

    No. 5: I am not sure what he is saying, that politicians claim full employment is impossible, or they say its their goal .. what is the myth being busted?

    No. 6: “These measures will not result in economic collapse” – I think they could if handled irresponsibly (and lets face it in the current system its politicians who would implement them, so you can pretty much rely on it being irresponsible). There are many economists who tie increased money supply to inflation, with the possibility of economic disaster, so because there is expert opinion on both sides I see this as opinion rather than fact/myth busting.

    No. 7 I understand the myth being busted is that unemployment is inevitable, well that is probably a myth, but the path to obtaining full and satisfying employment for all I think is more complex than ?no taxation and all government spending coming from newly created money.

  20. stephentardrew

    Great article John and logically constructed. The problem is you have to let go of the old to understand the new. You are being fed concepts tied to the old gold reserve standard that is now redundant however economists have not been honest with you and neither have politicians in cahoots with bankers and the corporate sector.

    They care not one wit about your justice or inequality and to think so is a fools errand. So in a culture of reducing returns to workers, lowering standards and conditions you think it is smart to support their greed just because they say the world will fall asunder if you do not believe them. They have absolutely no proof of their claims. Where are the interest rate increases that were going to doom world economies with austerity and quantitative easing.

    No matter what they do they cannot get interest rates moving up and that is obviously because what they tell you is one great lie. How many decades of boom bust greed and inequality will it take before you recognise you are being lied to on a grand scale. You have fallen into the trap of believing the loudest voice simply because it endlessly repeats entrenched deception.

    This fishing around for counter arguments actually demonstrates that your assumptions are not based upon a coherent understanding of economics but rather a conditioned response to learned memes that have no supportable empirical evidence. In fact those who repeat the neo-con mantra are doing their work for them while cutting off your nose to spite your face.

    The media owns you you do not own the media.

    We are on the cusp of another major financial collapse int he US as bank lobbyists weakened Dod/ Frank to allow ten trillion dollars worth of off spread sheet derivatives to remain in circulation. What bought about the last Global Financial Crisis? Wake up people before it is too late and rescue your country from the hands of these corporate banskter thieves. In Europe they are taking peoples (that is your savings) and using them to rescue their indebted investment arms. Some have lost their complete life savings. Don’t you realise that in Europe they are now using depositors savings to bail out banks.

    This is what happens when savings banks and investment institutions are combined as happened when Glass/Steagle was removed. Nothing much has changed since other than it is you who are paying to maintain the banks capital reserves while they refuse to invest in productivity.

    How many more decades before you make a stand against this blatant corruption? Add TPP, TPIP, TISA and ISDS clauses and you have the greatest thieving Ponzy scheme ever perpetrated by the .01 percent

    John is one hundred percent correct and the sooner you wake up from your conditioned sleep the better.

  21. Sven the Barbarian

    A comment stephentardrew mentioned to me is important, “The problem is you have to let go of the old to understand the new”, but I look at this a little differently. Of course the bankers and politicians and corporate power grabbing is insane, anybody who scratches the surface can see that, but things are changing and have already changed that make so much of this a game, like people have mentioned – monopoly, the people pawns in an unnecessary game that results in the haves and the have nots.

    Automation is reducing necessary work such as food production, construction, and distribution to the point where only a handful of people are needed to fulfil societies needs. Most of the work that is done, and this trend is increasing at ever faster rates, is superfluous, marketing, sales, luxury and consumer goods. We are at the tipping point where humans will no longer have to work to be satisfied. What happens to the full employment argument then. If we create policy to achieve full employment we are making people work when they don’t have to. Another mindset could be applied that works with this reality, instead of the dole bludger bashing mentality that exists today.

    Add into this the likelihood that immortality is just around the corner, and life being created in labs, our old way of thinking will need to evolve.

    But for the time being we can ignore all that, as immediate demands include the reduced standard of living caused by politicians who play money games to keep the majority poor and pliable and are passing ever increasing power and control to an elite rich.

    Another feeling I have, when I hear people say the current system of corrupt capitalism does not work, although I am against it all, on some levels I feel it has worked. I look at the history of the last 60-70 years, where Americas consumer capitalism has taken precedence, replacing religious or monarchic worship to money worship, and it has been a relatively peaceful period, at least selfishly for the societies that have embraced and led the capitalistic movement (US/Canada/Australia/England/some of Europe).

  22. Zolbex

    Sven, regardless of automation, there are things to be done. And there will be things to be done for the foreseeable future. Even by conservative estimates, this country has an infrastructure backlog estimated between 30 and 100 years. There is capacity to build this, as well as making up the shortfalls in education, health care, aged care etc. The point of John Kelly’s article is that neo-liberal hacks will claim that there is not enough money to complete these tasks. Which is complete rubbish, given the fact that it is only money that the government has an infinite supply of. This is his main message, and it happens to coincide with the true state of affairs, despite outlandish claims by politicians and commentators alike. There are a number of posts above that attempt to explain this reality.

    You are right, one day, in the not too distant future, labour will not hold much (or any) value. We are not there yet, there are a number of things that have to be true first before that can happen.

  23. margcal

    Florence nee Fedup January 1, 2016 at 5:16 pm
    I can’t recall a public holiday let along New Year Day when comments across the internet and MSM have been so numerous. Comments generally slow to a trickle at this time.
    Ley is out, as if it was normal weekday. PM shown up on admittedly good news assignment.
    Can we take it, that people are tuning in to politics once again?

    I think it’s more a case of the LNP having so much bad news to deliver and they’re trying to dump a good portion of it in a traditionally very quiet period. However, they’ve been so awful for so long that (some) people are now keeping watch every day of the year, knowing that this would be the time to miss something if they took a break.
    Whether this can be taken as more people taking an interest …. maybe.

  24. John Armour


    If you are still disputing a former Chair of the New York Federal Reserve’s claim that taxes do not fund anything, I must assume you have not yet read John’s link. Until you do, you will struggle to make a useful contribution to the debate.

    You are not the first to question this widely held belief, which was dealt with, to the point of exhaustion, right here on AIMN last year in the comments following the article.

    The Mystery of Money or how I learned to stop worrying about debt and deficits.

    The reality is that taxes are not even capable of funding government spending, which is amazing given the almost universal acceptance of this “self evident truth”.

  25. Annie B

    A brilliantly written, straight to the point, truth-of-the-matter article here John Kelly — thank you.

    I am copying and pasting, to print out to several I know would be interested ( but who are not into independent media ).

    I hope it all – absolutely – achieves the domino effect, and that people wake up to these truths, before the next election.

    Cheers ………

  26. kathysutherland2013

    I’ve always struggled with economics – the myths confuse me and, to be frank, so do the myth-busters. Perhaps someone could explain, preferably in words that a non-economist can understand, what do taxes do if they don’t fund spending? I always thought they did. In fact that was my go-to answer when people complained about taxation!

    Is there an “Economics for Dummies?”

  27. Matters Not

    Let’s accept that MMT is a better descriptor of economic ‘reality’ (always problematic and essentially a theory laden exercise) than alternative views, whatever they maybe. However, the (political) fact is that most of the ‘power’ players simply don’t accept the MMT construct. After all, we are not talking about ‘truth’ here, in the same way that mathematics and logic (given certain assumptions) speak of ‘truth’. We are talking about a ‘theory’, in much the same way as we talk about any number of theories in the social sciences.

    Modern Monetary Theory (MMT) is not ‘common sense’ and for any politician to advance same would be courageous (in the extreme).

    While there are certain assertions that are undeniable, (I think) such as certain nations having ‘fiat’ currency and therefore can’t go broke, how this impacts not only within a nation but how it ‘may’ of ‘might’ effect a nation’s relationship with others remains unclear.

    Again, examples re the application of MMT would be helpful. Or are all nations as dumb as we are when it comes to solve economic problems?

  28. Zolbex

    kathysutherland2013, let me be cute.

    Imagine a lovely bath tub. It sits empty, nobody cares. Things start happening when there is water involved. The bath tub is the domestic economy, water is money. There are a couple of taps, marked blue and red. Prompted, they both start spewing water into the tub. The tub starts filling. It is about to overflow just as we discover the drain plug. So we have a tub, a couple of taps and a drain plug. So we open the taps, the tub starts filling. Pleasure. The problem is when the water gets to the rim. What would a normal person do? Turn off the tap(s). But what if you cannot do it, or you don’t want to do it? Well, you can pull the drain plug, so you don’t have to spend your evening mopping up. The two taps are money sources: one is by the (federal) government, the other is the foreign sector. You, arguably, need both taps open for a number of reasons. Overflowing is (too much)inflation, never a really good idea, there can be a lot of mess to be mopped up, which can be tiresome. So we get to use the drain: TAXATION. We drain excess water (money) from the tub (economy) to avoid inflation (spillover).

    SO, you don’t need to pull the plug in order to close a tap. The objective is to maintain a stable water level by either means. you don’t need one to do the other. Open/close, drain/plug.

  29. Sven the Barbarian

    Hi John, I skim read a lot of this information and am not an expert on the intricacies of any economic system, I unfortunately do not have the time to read through over 200 comments in another thread to find the enlightening truth. But when you ask if I continue to dispute a former Chair of the New York Federal Reserve’s claim that taxes do not fund anything, I would say yes I question his statement, like I question many of the original posters statements, and I question the in power governments statements. Just because someone is in a powerful position does not mean they know everything, or are honest.

    I probably agree with most of the premise of the original post, but I do not see (many) myths being busted with hard facts. I see a lot of extremely confident opinion about how to fund government spending, and how it will not cause any damage to the economy. I agree the way most politicians present the economy and cost cutting is misleading, well everything that comes out of a politicians mouth is misleading. I refuse to accept that there is one simple answer and that the original poster knows what it is, and anybody that questions it is a liar or ignorant. Many smart people have played games with macro-economics with absolute surety in their beliefs, only to result in disaster, Alan Greenspan comes to mind but I am sure he is not the first.

    It is my experience that when genuinely productive and intelligent people approach a complex interconnected problem such as national economic policy they will never be completely sure what the solution will be, there are too many possibilities for unintended consequences to arise. Making a statement such as the runaway release of new money into circulation will have absolutely no effect on inflation, and being so sure about this statement, it sounds wrong to me. Maybe it would work, but I would be cautious.

    Zolbex, the bathtub sounds nice but I think there is more too it, if the government works out additional funds pulled from the population through taxation, then surely they could divert those funds (or be visualized as) to pay for government spending, thus reduce the amount of central bank money needed to be created. To me it sounds like mincing words saying taxes don’t fund anything.

  30. Zolbex

    Sven, for somebody who doesn’t have enough time to do his own research, despite the links provided, you appear to have enough time to make lengthy comments. Just an observation.

    As for the paragraph addressing one of my comments; yes, you would be right if the majority of the currency in circulation would be notes and coins, in that case it would make sense to recycle the majority. Your criticism fails on that very point: “hard” currency in circulation is around 3-10%, the rest are keystrokes. How do you recycle keystrokes? And why would you do it?

  31. Sven the Barbarian

    It may be keystrokes, but it is still in circulation, ie on the books in some way or another. The gov’t has a reasonable idea on how much virtual money is in circulation. When it collects taxes that’s numbers going into the gov’t, when it creates money at the central bank that is money going into the gov’t, when it spends etc that is money going out of the gov’t. The govt will have a series of ledgers recording all this.

    Because there is a set amount in circulation, if some money goes in and in another transaction some money goes out, surely you could visualize that taxation money as passing through to spending, or not, it depends how you want to look at it.

    It would take me all night to read 200 comments, and do all the extra study to try and understand those comments, it takes me 5mins to make a comment. I find the logic in the comments in this thread very interesting, I however have no respect for conservative political economists spouting their ideas as if they are the one and only truth, and I have the same disdain for any other economist who acts with similar confidence on an extremely complex real world issue.

    If Australian politicians wanted a high speed rail system, and they said to some foreign company our central bank will create a zillion AUD tomorrow to pay you to make it, that would not affect inflation? I can’t see the logic in that, with some well establishing schools of economic thought also tying money creation with inflation, I do not see how the original poster can state with absolute confidence there is no affect on inflation.

  32. John Kelly

    Sven, a couple of points on your last two posts. Yes, of course there is a ledger crediting tax coming in, which is then compared with spending going out. No one is saying we do away with taxation. What we are saying is taxes are not used to fund spending. They are simply a tool to help balance the amount of money in circulation. But they are not a fund from which we draw down on to spend, such as what happens when you or I spend from our bank account. But what guards against inflation is targeted deficit spending on employment creating projects. Full employment guards against inflation. Full employment underpins any successful economy. Imagine the boost an additional 800,000 people employed would do to our productive capacity, our standard of living. The additional employment generated by a high speed inter-capital city rail system, paid by the govt would not be inflationary. It would be a huge economic boost to jobs directly and indirectly across the country. And that is only one project.

  33. Kyran

    The greatest myth of them all is the one that has evolved over the past decades, regarding the function of a ‘budget’. Once upon a time, a ‘budget’ was a means to an end. The ‘end’ was the social construct of minimum standards, whether it be health, education, wages and conditions, law, rights, equity, etcetera, with universal application. The government of the day was required to ensure everyone had access to these basic standards and the budget was the means to that end.
    We now have governments making ridiculous arguments that we can no longer afford any of this, mostly using the spurious myths detailed in your article. Somehow, the budget is an end in and of itself. It is now acceptable that politicians can conduct election campaigns to detail what they can’t do, hiding behind their financial incompetence.
    Thank you, Mr Kelly. As it is a new year, a time of aspiration, maybe we can hope for integrity from our politicians. I do not recommend holding your breath. Take care

  34. John Kelly

    Kathysutherland2013, Zolbex’s bathtub is a good illustration, but in blunt terms, taxation money is just a computer keystroke entry. It is money taken out of circulation, recorded as such and then destroyed.
    I do recommend John B’s links to gain a better understanding of modern money.

  35. JohnB

    Sven the Barbarian January 2, 2016 at 1:10 am
    Follow the links I provided to assist kathysutherland – they are all youtube videos – no heavy reading there.

    To understand the operation of a sovereign fiat money system functions, one must first be prepared to divorce all intuitive ‘money=gold’ concepts embedded in ones psyche by generations of exposure to/use of (gold) convertible (equivalent) currency.
    The old concepts no longer apply – yet are constantly reinforced by repeated use of false ‘value laden’ metaphors by commentators and politicians who either don’t properly understand/comprehend fiat currency operation, or perhaps have a vested interest in perpetuating ‘useful’ myths that serve to move wealth from common citizens to the wealthy.

    It is counter-intuitive, but money per se is valueless – it is a ready means of exchange that relies entirely on confidence that those tokens of exchange will be accepted as payment for supply of some other item or service.

    From Warren Mosler ‘Seven Deadly Innocent Frauds Of Economic Policy’ (pdf)
    “And what happens if you were to go to your local IRS office to pay your taxes with actual cash? First, you would hand over your pile of currency to the person on duty as payment. Next, he’d count it, give you a receipt and, hopefully, a thank you for helping to pay for social security, interest on the national debt, and the Iraq war. Then, after you, the tax payer, left the room, he’d take that hard-earned cash you just forked over and throw it in a shredder. Yes, it gets thrown it away. Destroyed!
    Why? There’s no further use for it. Just like a ticket to the Super Bowl. After you enter the stadium and hand the attendant a ticket…”

  36. John Armour

    “Because there is a set amount in circulation, if some money goes in and in another transaction some money goes out, surely you could visualize that taxation money as passing through to spending, or not, it depends how you want to look at it.”

    What you are attempting to engage with here Sven is quite technical and cannot be accessed using “common sense”, or picked up on the fly by skimming. Macroeconomics is riddled with paradoxes and if you want to have your comments taken seriously at some point you have to engage with the literature.

    To take your above quote: there is not a “set amount in circulation” as the money supply is determined by the level of activity in the commercial banking system. The central bank has no control over this process, beyond setting a price for reserves. The commercial banks are the tail that wags the central bank dog.

    Your example of the inflationary impact of the central bank creating a zillion AUD to build a high speed rail line and ignores the most basic tenet of our monetary system which is that the government can afford to buy any product or service that is available within the physical capacity of the domestic economy.

    This ability is common to all governments that are sovereign in their own currency and the reason why taxation is not required to fund government spending.

    The main purpose of taxation is to manage demand.

  37. JohnB

    John Kelly – “Full employment underpins any successful economy.”

    By Australia’s premier (world leading) academic economist:
    The Labour Underutilisation Crisis in Australia – Professor William Mitchell (50 mins vid.)

    The above is the best 50 mins video I’ve seen on the social/economic significance of full employment in a nation – it is a pity ALP politicians like Swan/Bowen don’t adopt Bill Mitchell’s national economic management model.

  38. gee

    the key to understanding is to give away the concept that money has any value in and of itself. at all. it is a medium of exchange constantly being created and destroyed. the real value is the share of productive capacity it represents. at the moment, banks get to create the money, then charge interest, retaining a share of everyone elses productive capacity to the value of the “interest”, which they share with ‘shareholders’ and “stakeholders”. clue. “stakeholders” should really read “steakholders”, i.e. those that get a cut get to eat steak, for everyone else it’s vegemite time.

    government expenditure on productive capacity increases the “wealth” of all.

  39. Kaye Lee


    I was part of that original marathon conversation and I understand your hesitation and your questions.

    I do not agree, for example, cash payments are then thrown in a shredder. That is just not true as anyone who withdraws cash from a bank can tell you. You don’t get freshly minted notes and coins.

    I agree that we have the capacity to do as John suggests but I disagree that we currently use that capacity. And this is where the discussion usually gets messy.

    If you look at government accounts then our current spending is funded by taxation and by the issuance of bonds. It doesn’t have to be that way, but that is what we currently do. There is no record of quantitative easing (money creation)as has been practiced by some other countries.

    MMTers will respond that the money coming in is destroyed and the money going out is created but, to me, that is conceptual semantics. They will say it happens by the RBA crediting a commercial bank’s account (or individual accounts) by a keystroke – technically true – but we still measure our income and expenditure and there is no recording of capital introduced or whatever you want to call it. This is what I cannot understand. It seems to me that we must have an accurate picture of how much money (and I don’t mean cash) there is in circulation. And before we go down that oft-argued path, no, this has nothing to do with being tied to a gold standard. As I have argued before, it is accounting. And yes, I understand an RBA cheque won’t bounce due to insufficient funds. I am not suggesting that they have to count money into their account before they can pay any out.

    I am happy to agree with the theory behind MMT and I understand that, provided there is unused productive capacity, money creation is not inflationary if spent on things that increase our productive capacity (as opposed to war toys). I am not as confident about possible effects on exchange rates.

  40. Ross in Gippsland

    Off course you might like to ask the question if the government is in debt and the 2015 budget is in deficit, where are they going to find the 40+ billion dollars needed for the 2016 budget.
    Is our esteemed treasurer going to take a look at the governments bank balance then wander down to the local bank of China and take out a personal loan or will the Reserve Bank just create 40 odd billions of AUD out of thin air?

  41. Rossleigh

    From “Debt: The First 5000 Years”: “If one doesn’t believe in the king, then the money vanishes with him”.

    This book basically looks at how credit has been the main way of conducting economic transactions for the past several centuries and that “money” or rather coinage is relatively rare. Promisory notes, which have sort of morphed into paper money, are really just the state’s way of obtaining a “loan” from its subjects. Hence, once one no longer accepts the “king” as in charge, then his promisory note or paper money is as worthless as me writing out a cheque for a billion dollars.

    However, it was the following bit from the book that I could see a possible platform for the Liberals at the next election:

    “English villagers in Elizabethan or Stuart times did not like to appeal to the justice system, even when the law was in their favor—partly on the principle that neighbors should work things out with one another, but mainly, because the law was so extraordinarily harsh. Under Elizabeth, for example, the punishment for vagrancy (unemployment) was, for first offense, to have one’s ears nailed to a pillory; for repeat offenders, death.”

  42. LOVO

    One wonders if’n it would be more economically viable to make money out of ‘Thick Air’, as the afore said, would have more ‘density’ …….. jest say’n 😯

  43. bossa

    Kaye Lee: “If you look at government accounts then our current spending is funded by taxation and by the issuance of bonds. It doesn’t have to be that way, but that is what we currently do.”

    Herein lies the con and the means to shift wealth away from the people. The banking system, supported by government, uses this system to create wealth disparity and theft by fire sale of public assets. It uses taxation as a means to create social division, resentment and discrimination towards anyone receiving welfare. Taxation arguments are always used to authorize austerity measures and discrimination toward indigenous peoples and their social programs.

    Also, if the banks could not create debt with a few strokes of the keyboard there would be much less pressure on the government to alter its spending habits. As it stands, private debt is creating demand for lower government spending (and, ironically, to lower taxes so people can service their debts) in order to reduce the amount of money in the system to avoid inflation. We are currently seeing a war where the banks, supported by way of governments trying to create money the old fashioned way, are destroying our social fabric and public institutions.

    The accounting scam that is the budget is cooked to make it look like taxation is used to pay for stuff when it is not. It’s all just numbers in a machine these days. Sure, balance needs to be struck, but when they try to use taxation as the means to explain it, it’s a con job that “looks right” to most people and so they can keep getting away with the scam over and over, delivering our assets to the elite on a platter. It is the mechanism by which politicians justify the transfer of our wealth.

    Being the issuer of the actual currency means that the government does NOT have to borrow it’s own money from anyone else. The money has no inherent value apart from being a facilitator. A tool, nothing more.

    The asset which backs up our FIAT currency is the actual economy, not gold. If you trash the economy (e.g. Joe Hockey & The Car Industry) you trash the currency (US$1.10 down to US$0.68 last I looked).

    People need to keep remembering that FIAT currency has no value per se. It is not a gold coin it is an abstraction.

  44. JohnB

    Hello Kaye January 2, 2016 at 9:58 am,
    Let’s not get sidetracked on minor detail as to how much or when returned cash is ‘shredded’ – the point is meant to be illustrative of the tokenistic value of physical currency.
    (Circulating currency makes up only about 2% of financial value of commonwealth total assets – notes have a circulatory life from 10 to 2 years. Whether they are kept or destroyed is a treasury admin decision based on efficiently utilising physical notes/coins, unrelated in any way to the monetary face value of the objects. If they replaced every note/coin received back, the only cost is the procurement cost of ‘new’ objects)

    “…If you look at government accounts then our current spending is funded by taxation and by the issuance of bonds. It doesn’t have to be that way, but that is what we currently do. There is no record of quantitative easing (money creation)as has been practiced by some other countries….”

    The preceding statement is incorrect in several aspects
    – current spending is not funded by taxation receipts – however the amount of taxation received offsets the ‘new’ spending initiative by reducing the amount of net spending recorded on bottom line of the fiscal balance sheet.
    – current spending is not funded by issuance of bonds; the govt ‘provides’ bonds to investors and banks to control/set interest rates. The bonds are (almost) always bought and sold in $AU – for the govt. it is like moving funds from a cheque account to a savings account; for an investor it represents a safe investment with a guaranteed return. Bond sales provide the govt. with no net increase is funds available for spending – the govt received money for the bonds, but the income is offset by the liability to pay back the bond at some agreed time.

    “..There is no record of quantitative easing (money creation)as has been practiced by some other countries…
    is simply untrue. The spending appears in the running tally of fiscal balance as an addition to the deficit.
    The Rudd/Gillard ‘stimulus’ spending on the BER/Home insulation/stimulus cheques all appear in the fiscal balance sheets.
    The US QE programs all appear in the US balance sheets (see chart 1)

    “..we still measure our income and expenditure and there is no recording of capital introduced ..”
    There is counting of capital introduced – it is recorded as an asset acquired on the balance sheet, or is returned as increased GDP that results from the expenditure of those funds. Investment in the ‘social economy’ is just as important as an investment in a physical asset – it returns productivity to the economy in various ways.
    Govt. investment, whatever the form, that contributes to the social stability of our nation increases internal/external confidence in our nations ability to ‘produce’ into the future – that in turn increases the confidence and value of our fiat currency.
    Our fiat currency is backed by only one thing – commercial/public confidence in its stability as a vehicle of exchange. Thus we maintain a stable currency and exchange rate.
    There has been no direct link found/established for currency exchange rate vs fiscal deficit.

    This video is very informative on the subject Modern Money & Public Purpose 1: The Historical Evolution of Money and Debt (Randal Wray/Michael Hudson)
    If short of time, watch from 30mins (xchng rates) to 45mins.

  45. kathysutherland2013

    Thanks for those links, JohnB, and the bathtub ilustration is helpful, Zolbex. My understanding of taxation is still fuzzy, though. If it’s really just a computer keystroke entry, what’s the point? Why do we carry on about big corporations not paying tax if tax is just a keystroke – “money taken out of circulation, recorded as such, then destroyed”

    Countries such as Sweden have always beeen my ideal (in this respect, anyway. They pay lots of tax but look what they get for

    My confusion here is basic – I don’t think I can move on to a deeper understanding of our economic system until I have this sorted. But I’m trying!

  46. Kaye Lee

    “Being the issuer of the actual currency means that the government does NOT have to borrow it’s own money from anyone else.”

    I agree. But the fact is that we DO borrow money. We don’t have to but we DO. I know you say they do this to control overnight interest rates but this is an argument about the next step. You could control interest rates, or the amount that banks can lend, by other ways. You can have liquidity requirements. The RBA sets the rate at which it lends money – if it wants less money in circulation, raise the rate you charge the banks.

    When you say taxation destroys money I understand the concept of withdrawing it from the private sector but it isn’t destroyed. It is credited to an actual account albeit electronically.

    Anyway, we have had this conversation so many times I won’t carry on further.

  47. jim

    I Think the Liberals aided in getting more people seeking the truth in politics when they had the MSMedia show us everyday on the telly how “bad” the ALP where they it ran like a soap opera so now more of us want to know what is happening as rabbit would say shit happens.

  48. diannaart

    Whatever name is given to economics it is all just a load of:

    CrAP: Creative Accounting Procedure.

    Apologies, AIMers, my ability to focus on economics is about zero – put me in front of any science doco and I will binge away for hours, present me with a balance sheet and…. oh, look, butterflies.

    I am not proud of this and I believe a great part of the problem is that many people feel much the same way about the aptly named ‘dismal science’.

  49. JohnB

    @kathysutherland 2013January 2, 2016 at 1:13 pm

    Briefly, tax is essential to create demand for the currency – as well as a means of regulating the activity within an economy but most importantly it supplies a means of (govt.) equitably distributing wealth the community/nation creates. At the same time taxation withdraws production capacity from the economy which ‘makes room’ for the govt. to invest (spend) on nation building productive public infrastructure and programs of national social benefit.

    Though tax is not to gather revenue for govt. tax is about establishing/maintaining social equity and preserving egalitarian structures – the proportionate sharing of the load between those who can least afford to pay and those who can most afford to pay.
    Our progressive tax rate is the tool that delivers ‘equalisation’.

    When the highest income earners in a society fail to pay their proper share of the (tax) currency that treasury needs to call in to regulate supply/demand balance in the economy, that revenue withdrawal load falls upon the many of lower income who are less able to supply those dollars.

    Essentially I propound that corporate tax evasion/contrived tax minimisation represents a very discreet and highly effective form of class warfare – being carried out on a sufficiently large scale to change the social structure of our nation.

    Carried out to the extreme it assists the rich to get richer, while the less rich get poorer.
    The vanishing/vanished US middle class is testament to the impact of unfair tax collection.

  50. Zolbex

    Hi Kaye, love your work.

    It is imperative to understand how bonds are used. As John B pointed out they are not issued to finance deficits (like an overdraft account) but to DEFEND the cash rate. Banks being banks, even overnight they charge interest to each other. So the cash rate becomes the default in this process where there is something like a reverse auction as to which bank will charge the least amount of interest. So this bidding down will stop at the cash rate when they hit the target, no bank is stupid enough to offer rates lower than the default set by the RBA. Personally I reckon that monetary policy is a clumsy, blunt tool. The cash rate should be targeting ZERO, that would dispel the myth of government borrowing. Bonds would likely to be bought even at negative rates, if the shit hits the fan, so would this process be called government “lending”?

  51. Sven the Barbarian

    Hi John Kelly,

    I think I understand when people say tax money is destroyed, and then the government makes new money to pay for spending, but its like saying when I transfer money into my bank the bank destroys it, then when I withdraw money the bank magically makes it. Sure you can look at it that way, and the bank may do so, but you could also look at it like the bank has a balance of all deposits and reduces that ledger when a withdrawal is made. Its fiddling with numbers, either the government destroys all taxes and creates all new spending money, or the government transfers the tax money across to spending, creating money to cover any deficit or destroying any excess.

    I also appreciate the additional comments that have tried to clarify the economics of sovereign fiat money, but if directed at my comments I think its going out on a tangent pulling away from my original reason for commenting, creating money not affecting inflation.

    Maybe there are two arguments here, maybe the original post meant that creating money does not mean “inflation must occur”, ie inflation would not occur IF the resulting government spending is intelligent and responsible, ie targeted deficit spending on employment creation. If that is what was meant I would argue less, but if so it could have been stated clearer. Anyway its a bit of a vague statement, economists and politicians could argue forever about what spending creates employment, and then blame each other when inflation occurs.

    The other argument I feel being made is that money creation has absolutely no affect on inflation, period. I argue against this, first because it seems illogical to me, flooding huge amounts of currency into a market, with no restraints on how it enters society, would surely have some affect on costs. Second because many economists say there is a relation. Seeing it is such a complex issue and there is already disagreement among experts, I cannot accept such a bold statement can be made.

    I understand the core of the original post is to defunct political BS that says the masses need to live on less to balance the books, I agree with this is BS, and agree that well managed public spending on infrastructure is a good thing. I kind of agree that full employment might be a good thing economically (there are more considerations than just the “economy”, whatever that actually means), although with technology and automation maybe another model, perhaps extending the idea of the living wage would make more sense, focusing more on productivity and effective long term management of resources rather than everyone working all the time.

    Kaye Lee – I think we are on the same page.

  52. JohnB

    @Kaye Lee January 2, 2016 at 1:28 pm
    “..But the fact is that we DO borrow money. We don’t have to but we DO…”

    Kaye, I understand you don’t want to get bogged down in economic discussion, however the point you raise above deserves clarification for other readers – many others share your query.

    The all important follow up questions that should be answered are:
    1) – how do we borrow the money?
    2) – in what form is the debt?

    1) the money is borrowed (withdrawn from circulation) by the sale of bonds – all in in $AU.
    The money can come from the domestic private sector or from overseas investor/s seeking a safe investment (with int.% returns) – but the transaction must take place in $AU currency – the interest is paid in $AU currency.
    Therefore, a foreign investor must convert their funds to $AU both before transacting the ‘loan’. The redemption is paid out in $AU.

    2) From the Aust govt. point of view the funds ‘borrowed’ are in fact an exchange of $AU currency (govt debt, in circulation) for an IOU bond deed ($ liability/debt + interest).

    We have thus exchanged $AU currency (a govt debt) for an interest incurring liability (debt) to the value of bonds sold. As the interest is paid in $AU where is the problem with maintaining a deficit?

    If the economy is humming along productively, if unemployment is low, if govt. investment in infrastructure is efficiently enabling adequate GDP output, Australia as a viable stable productive nation will have a strong currency – and with such will represent an attractive investment destination -no matter what level is the fiscal ‘deficit’.

    Economists Mitchell, Mosler, Wray, Hall to my knowledge have all stated that under such conditions there is no reason a deficit could not be carried over for ‘ever’ if necessary.

    “..When you say taxation destroys money I understand the concept of withdrawing it from the private sector but it isn’t destroyed. It is credited to an actual account albeit electronically…”

    It is effectively destroyed as far a treasury is concerned in that the money withdrawn as tax is no longer in circulation. It has served its social purpose of addressing (progressive) equitable distribution of wealth, and has left space for other govt. investment/spending,
    The actual account it is credited to is the fiscal balance account – reducing that fiscal balance; but as it is playing no further part in the economy it is effectively ‘destroyed’.

    (Note.. Money held in a bank account is not destroyed – it is still available in circulation in the active/productive economy.)

  53. Kaye Lee

    I still view the issuance of bonds as our mechanism of money creation. The bonds are created out of nothing. They cost us no resources. I understand that we, at the same time, incur a liability, but we repay the face value of the bond so inflation makes that significantly less over say 10 years, and all we have to do is invest the money in something that brings a higher return (not necessarily short term financial but productivity enhancing) than the interest rate we agree to pay (set by us – not them). I don’t see it as borrowing. I see it as the method we currently use when we could be just crediting an account at the RBA and calling it e-seignorage. The interest we pay is money created too but to the purchasers of our bonds.


    I understand the mechanism (vaguely) but it seems a superfluous construct to me. The same result could be achieved without the existence of bonds.

  54. Zolbex

    Nail on the head, Kaye. The system would work without issuing bonds. (As far as I’m concerned it is giving a bunch of leeches the periodical (perpetual?) free lunch. The point remains the same: bond sales do not finance government (deficit) spending.

  55. diannaart

    Thanks for the link JB, I promise to check it out – the problem I have with economics is not that it is dry (which it is) I have the patience and focus for things that many would consider dry, it is that economics is so abstract and not in any good way. I can go work on a film set as part of something that is fake and smoke and mirrors – but at the end there is a something that can delight, entertain or inform – something comes out of it.

    If patriotism is the last refuge of a scoundrel, then economics provides directions.

  56. Kaye Lee

    I can agree on that. We can spend whatever we want (with previously discussed caveats). I would rather say we are not constrained by taxation revenue or bond issuance. We have what could be looked on as an unlimited open line of credit.

    (I just get hung up on the accounting….but that is a different issue that I have already done to death and would be unproductive to pursue further).

  57. JohnB

    @Sven the Barbarian January 2, 2016 at 3:27 pm

    Money held in a bank account is not destroyed – it is still available in circulation in the active/productive economy.
    Your deposited asset has merely become the banks liability – the bank will use that money to their own productive ends. It is not magic or playing with numbers – it is basic accounting.

    Taxes collected by govt. have no relationship with new govt. spending apart from contributing to the fiscal balance sheet bottom line. The currency is effectively ‘destroyed’ because it is out of circulation and plays no further part in the economy.

    I put it to you that inflation is caused when too many dollars are competing to acquire too few available resources.

    Spending of any type that creates those conditions is inflationary – proper national currency management is all about proper balance of available supply to demand – and supply includes employment/labour.
    The constraints on how it enters the economy (society) are supply/demand limitations.
    No one I have studied who understands MMT suggests the situation is otherwise.

    In the US since 2008 QE has injected a massive (approx) $4trillion into the US economy – does the US have an inflation problem?
    No… because supply/productivity is not their current problem, low demand/depressed wages is their issue.

    In Japan, interest rates have been at zero for some time. they have been desperately trying to get some inflation going with massive QE programs stimulus acquired assets now constituting 57% of Japanese GDP.
    No success – deflation/economic stagnation persists 7 years after it started.
    Why? I suggest it is a similar problem to that of the US, depressed demand.

    A properly balanced economy will not suffer currency inflation problems if available supply is matched to empowered demand.

  58. Geoff Andrews

    Am I able to presume from all the foregoing that Labor’s reply to the LNP’s “debt & deficit disaster” rant at the last election should have been: “it shows how WELL the economy is travelling”?
    …or that the LNP’s assertion that the “debt” was costing $2 million an hour in interest was bullshit?
    …. and that the massive increase in the “debt” since the adults took charge in 2013, is suddenly a good thing?
    Also, may I assume (once again) that a budget deficit or surplus, being the difference between expenditure and income through taxation (?), is meaningless because one of the variables (income) is a device for keepng inflation under control.
    We’ve got to do better than the bathtub to beat the family budget analogy, although the bathtub’s a good start.
    Convince Kaye Lee an’ you’ve got me. 🙂

  59. Kaye Lee


    Let me be clear. I do not disagree with anything John and others are saying except for one thing. I think what they are suggesting is possible and the way we should do things. But I do not think it is the way we do things yet. Get rid of bonds, use PQE (people’s quantitative easing) to pay for a high speed rail, a real NBN, health, education, welfare, research etc and I’ll be a happy girl.

    As for bonds being issued to create a demand for our currency, that is also something that could be achieved through other means. The financial market has become a self-feeding beast blind (and actively opposed) to other methods of regulation.

  60. Sven the Barbarian

    Hi JohnB

    I am being silly but I think you could visualize my example of a bank account the same as the government, if you visualized my spending/productivity etc as an economy all to itself. When I deposit funds in the bank, that money is taken out of circulation within my economy, when I withdrawal it comes back into my economy.. what the bank does with those funds while it is out of my economy is meaningless, they can destroy it or create it, but as far as my economy is concerned, the withdrawals I make come from the deposits I made (or if I never withdraw the funds cease to exist, or if I overdraw money is created). So for a layman looking at the govt accounts, seeing taxes go in and spending come out, regardless of how the govt juggles it, could say the tax money is being used for spending. And if the govt handled their books that way on paper it could also be that way.

    The statement Taxes Fund Nothing seems like a simplistic statement that takes one angle of looking at the books and makes it emotive, maybe correct with the way govt handles its accounts but they could in theory achieve the same results juggling the books another way, it is afterall just numbers.

    Again I just being argumentative, feel free to ignore, much more interested in real world solutions. Everything you guys say about economic theory sounds interesting, it is a shame none of it will ever happen under the current system.

    I would be interested to understand what the ultimate social goals of these ideas are? This is one of the greatest failings I see in the current system is there are no well defined goals, so when a politician says “I made the Economy better!”, they could be referring to anything, including making a small % of people very rich.

    There are so many values that need to be addressed such as ensuring everyone has a home, or a quality home, or a certain level of healthcare, or the best healthcare, or are free to pursue any endeavour they wish, or are rewarded only if they enter the endeavours society deems productive, or protect the environment, or be competitive against other countries. It is so vague that politicians, as long as they maintain some really low minimum standards, can pretty much get away with anything they want, and walk away touting their successes.

    By the way I am a hardcore direct democracy supporter, so my view on elected representatives is they do more harm than good, and the system is a far cry from a genuine democracy. But I am a bit of an idealist when it comes to democratic governance, and my view on “more harm than good” could differ from other peoples.

  61. totaram

    I have seen a lot of discussion of these issues, and especially questions like Sven the B’s. My own feeling is that these matters cannot be easily understood until one has grasped National Accounting, which helps to advance one’s understanding, but is in no way dependent on MMT concepts. This makes it “uncontroversial” or perhaps “less controversial”.

    The fundamental fact that a government “surplus” implies private sector debt, unless there is a substantial trade surplus, should open ones eyes.The questions you want to ask are:

    (1) Why is government debt, which is around 25% of GDP, be such a problem, when private sector debt is around 125% of GDP?

    (2) If government surplus will lead to greater private debt in the case of Australia (because we don’t have a trade surplus), why should we look for a government surplus?

    Once you ask these questions and understand that the “standard” responses make no sense, your mind will be more receptive to the other explanations of MMT.

    So I would recommend to Sven that he first understand the National Accounting Identity from Bill Mitchell’s blogs or any other source, and proceed from there.

  62. JohnB

    @Sven the Barbarian January 2, 2016 at 7:36 pm
    Your deposited money remains your asset – its value is preserved to your credit (as the bank’s liability) and the money remains an active part of the common economy all users of the AU currency inhabit.
    If you never withdraw it, it remains as a bank liability until time dictates it be transferred to consolidated revenue.
    Even then, it is still claimable by the rightful owner.
    If you overdraw, money is not created by the bank – the bank supplies money to you deducted from its reserve balance – it creates a debt (+ a usage fee) for which you assume liability.

    Banks don’t create money – they run a business that issues (interest earning) credit in exchange for offered security – they maintain the right to hold such security until the debt is paid out. The banks, like you are users of the currency, of which the sovereign govt. is the sole monopoly issuer.

    A layman looking at the govt. accounts should first be made aware that one is not observing a currency user account – one is observing a monopoly currency creators account (where all debt is incurred in $AU currency).

    Incoming monies (taxes) are necessarily unrelated to outgoing monies (spending) – they are different tools used for distinctly different effect; purposed to control/balance/manage/plan ever changing/evolving ‘externality’ – the national domestic economy.
    Balance of money in vs money out is not a priority – it is an incidental a tally record of funds properly invested in building/maintaining equitable national prosperity.

    The goals?
    National stability, productivity, efficiency, sustainability (includes environment), full employment and social equity are the objective – a stable confident currency results from achieving the objective.

    Bill Mitchell’s ‘Centre of Full Employment and Equity’ (CofFEE) nearly says it all for me.

    My view of MMT is that it serves to describe how a fiat sovereign currency issuing economy actually functions – it rationally describes the relationship/effect of govt. investment/spending, taxes, interest rates, employment and other foreign externalities.

    While many may disagree with some detail and some proponents social priorities, in my opinion it serves as a valuable tool that reliably predicts/reveals the real world effect of ideologically driven national fiscal/monetary management.

  63. John Armour

    “I would be interested to understand what the ultimate social goals of these ideas are?”

    Ironically, if you believe that the government funds its spending through taxation (which Professor Stephanie Kelton explains is not even possible*) you are unwittingly subscribing to austerity economics, the kind of nonsense Hockey floated with his “lifters and leaners” argument, the antithesis of what I imagine are the social goals you are talking about.

    The argument about whether taxes fund spending is not one of semantics, or accounting rules, but has become a political one where the underlying realities are deliberately obscured by institutional structures and language.

    A government that understands that it is not financially constrained by tax revenue or the proceeds of bond sales (in reality an asset swap) is free to spend within the capacity constraints of the economy in the interests of public purpose.

    A citizenry that accepts (naively) that its government is burdened with financial constraints will accept (grudgingly) a whole raft of neo-liberal policies (cuts) in the foolish pursuit of balanced budgets.


  64. John Armour

    “So I would recommend to Sven that he first understand the National Accounting Identity from Bill Mitchell’s blogs or any other source, and proceed from there.”

    I’ve raised the Sectoral Balances identity recently in comments in The Guardian, totaram, and sent the Tories there into fits of rage.

    By that metric alone, it must be a worthy topic of study!

    Here’s a link for Sven.

    “Flow-of-funds and sectoral balances”

  65. trishcorry

    Great article. I would love to see a Qanda with politicians answering questions from economists etc., with these issues raised.

  66. Sven the Barbarian

    All the best guys, on some levels I think you are not getting where I am coming from but I respect your passion for understanding economics and potential methods of managing things.

    I gotta hold myself back from continuing as do have so much on my shoulders, I often promise myself not to indulge in policy discussion, to me it is of much lower priority than achieving genuine democracy.

    If the population achieves a genuine democratic system I think there is more chance that issues such as the economy can be addressed intelligently. As it stands, when election time comes, even if you know of these busted myths, what can you do about it? Which party/candidate would you vote for and if one did offer these ideas as their platform, could you trust them to implement it responsibly, and could you trust their actions on all other legislation they implement. (sorry I can’t approach any governance topic without falling back on the fallibility of the existing system)

  67. JohnB

    totaram January 2, 2016 at 8:57 pm & John Armour
    Totally agree – a fiscal balance reality check extracted from past history is also helpful:
    ‘Fed. Govt Deficits & Debt since Federation’
    derived from Centric Wealth (Page2)

    Since 1901, 26 Fed Govt. fiscal balances have been in surplus (23%),
    88 Fed Govt. fiscal balances have been in deficit (77%).

    Assuming =/- 0.5% GDP constitutes budget (near) balance,
    then (approx) 9 Fed Govt. fiscal balances have been in surplus,
    66 Fed Govt. fiscal balances have been in deficit.

    It should also be noted that each group of surpluses achieved preceded or accompanied significant economic recession.

    If deficits are so damaging, how has Australia survived 88 of them?
    If future generations are to get a ‘bill’ to pay for our current deficit (as Hockey/Morrison & co tell us), why have we citizens who lived through around 50 of the most recent deficits not yet received such a ‘bill’?
    Answer – Because it is neocon crap talk.

  68. John Armour

    “All the best guys, on some levels I think you are not getting where I am coming from but I respect your passion for understanding economics and potential methods of managing things.”

    We’re no different from you Sven. We’re coming from the same place.

    But, with the greatest of respect, we have identified the obstacles, something you have yet to do.

    You have to get the economics sorted out first.

    When probably 95% of the voting citizenry accepts that we cannot afford to fund good social policy because of the government’s supposed financial constraints, it’s time for the citizenry to get educated.

    “If the population achieves a genuine democratic system I think there is more chance that issues such as the economy can be addressed intelligently.”

    You have it exactly arse-about Sven.

  69. John Armour

    “If future generations are to get a ‘bill’ to pay for our current deficit (as Hockey/Morrison & co tell us), why have we citizens who lived through around 50 of the most recent deficits not yet received such a ‘bill’?”

    Or, to quote Bill Mitchell:

    “There has never been an empirical relationship shown between tax level changes and debt level changes lagged however many years you like. The notion is ridiculous.”

    That surely is the empiric test that destroys the “taxes fund spending” myth.

    Thanks for the link to the history of deficits JohnB. Great stuff!

  70. John Armour

    “Great article. I would love to see a Qanda with politicians answering questions from economists etc., with these issues raised.”

    It would be 60 minutes of silence Trish.

  71. kathysutherland2013

    Thanks JohnB, but I’m still struggling. I can’t get into the deeper economics until I’ve sorted this basic concept. It’s hard, because all my ideas are being turned on their heads. Is taxation merely a construct? What of the connection between Sweden’s high taxes and its comprehensive social security system?
    My go-to position has always been “Let’s not complain about taxes, we need schools, health care etc?” and I’ve never felt I was falling into some kind of trap for saying that, just being progressive and accepting! Looks like I’ve got it all wrong, and I can join in the grizzling about taxes with everyone else!
    Sorry, everyone who gets this and has moved on. I’ve carefully followed all the links and videos people have provided, but I still don’t get it. I’m sure I’m not the only one.Perhaps I’ll stick to fiction.

  72. Kaye Lee

    I also struggle a bit here Kathy. Progressive taxes are a way of redistributing wealth. I can understand that. But then they say that collected taxation is destroyed which doesn’t make sense to me – that isn’t redistribution, it’s just taking more away from the big guys. If they conceded that that taxation was spent on infrastructure or education or health or something then it is being redistributed. For those of us who struggle, I think the idea that government spending is not constrained by taxation revenue is an easier starting place.

  73. andrew church

    Hi John Kelly,

    I would love the world better if I could believe those myths are busted, except for the part that we’ve been conned by our governments the world over. OK I believe that anyway.

    Between now and next election, could you do a series taking each myth and:
    1. Provide an outline sketch of the falsifying argument with some references for us to flesh it out
    2. Comment on what might be known of the truth that exists in absence of the busted myth.

    I gotta have this wrong, because it sounds like your saying the Whitlam government didn’t need to borrow 4 billion overseas to build Australian infrastructure. Gough was too dumb to know he could have avoided the Khemlani affair? OR would the solutions your suggesting now have been even more unorthodox in 1975 than by passing treasury and borrowing direct from the Middle East?

    Thomas Picketty has some neat stuff to say about the history of taxes, 19th century govts without taxes from a massive middle class had to borrow to fight wars. US civil war, the South counted on their cotton income, we all know what happened, could they have done something else? OK, different time on the Gold standard etc, but even then, we saw the value of trade, importance of cash.

    Also Picketty’s claim for need of high marginal personal tax as in the USA, historically as high as 80%, not for revenue, but to prevent the ballooning income inequality today. But today, that wouldn’t help much, we’d have to tax assets, private capital as well.

    Sorry if the Picketty stuff is side track, I just wanna get my head around the substance behind what you are saying.

    Is it somethin like Kaye Lee is referring to, a kind of economics that could be, should be, but yet to exist?

    Kaye LeeJanuary 2, 2016 at 7:08 pm

    Let me be clear. I do not disagree with anything John and others are saying except for one thing. I think what they are suggesting is possible and the way we should do things. But I do not think it is the way we do things yet. Get rid of bonds, use PQE (people’s quantitative easing) to pay for a high speed rail, a real NBN, health, education, welfare, research etc and I’ll be a happy girl.

    As for bonds being issued to create a demand for our currency, that is also something that could be achieved through other means. The financial market has become a self-feeding beast blind (and actively opposed) to other methods of regulation.

  74. kathysutherland2013

    Thanks Kaye. I think I’m getting a glimmer. Is it just me, or is economics really, really hard? I find it opaque,and I’m trying. How difficult must this topic be for those who don’t want to struggle with the ideas?

    Here’s an idea for a series – economic myths for dummies!

    Note: I’m not volunteering!

  75. Kaye Lee

    It’s like psychology Kathy. There are so many, at times, diametrically opposed views from experts in the field, all of whom seem to have placed themselves firmly in one school or another, that they give the impression this is all a matter of opinion.

    Those that spend their time in the arcane world of financial markets and monetary and fiscal policy make things unnecessarily complicated in my opinion.

  76. andrew church


    1. state the myth
    2. bust the myth
    3. back to the drawing board, no truth has been revealed by busting a myth


    you made a series of statements
    by implication each is the negation of some myth
    you claim these statements to be true.

    Can you tell us how you know what you are saying is true?

    It feels more like you’re busting bullshit political excuses used justify specific forms of economic rationalism.
    (ask for whom the economics of past 40 years would have been the choice of a rational agent/individual)

    Any political explanation of economic policies must by definition carry a heavy load of bullshit, given fallacious seudo science underpinning the accepted conventional wisdom of neo-classical economic that evolved, ad hoc, through last century.

    To show a statement is bullshit says nothing about the subject being argued.
    Only says “statement does not support argument”

  77. Zolbex

    MMT is descriptive according to economists who promote it. It is not a revolutionary new “operating system” and it is descriptive in a sense that it describes how the monetary system already works. It is not even political, many of the experts who do research and publish in this “stream” may have very different political views. For all I know, Bill Mitchell and Phil Lawn are lefty academics, Warren Mosler is a squillionaire funds manager, hardly a socialist. MMTs roots go back a lot further than the current crop, to Hyman Minsky and Abba Lerner, possibly further back than that. MMT is not a method, but a perspective of how to view the monetary system and economies the way they currently work in a fiat currency environment. MMT doesn’t really suggests a coherent policy approach with the exception of a Job Guarantee System or the currency issuing government as an Employer of Last Resort. I don’t really think that these experts would agree on a single tax policy (package). But they would all agree on the theory that capitalism as it is practiced by the neo-liberals, will bring about increasing inequality and is prone to grotesque boom and bust cycles; that the Job Guarantee Scheme is essential in the prevention of sudden, “unexpected” shocks caused by the unregulated markets.

    The fact that there is no relation between government spending, taxation and inflation has been discussed earlier, links are provided aplenty. The explanation of tax money being destroyed and not recycled stems from the reality that most money in circulation is electronic, and essentially it is the same process as when one shifts funds from one account to another while doing internet (or even phone) banking, it is a convenient way to point out the fact that a monetary sovereign does not need to tax in order to spend. (Where would one get the physical or electronic currency to pay taxes with?)

    The central part of John Kelly’s article is that lies are being fed by the politicians and mainstream commentators, namely we cannot afford this or that, because the tax revenue is insufficient, so we have to put up with cuts in welfare, education, health care, climate change mitigation, etcetera. That is John’s message. MMT is just there to dispel all this crap. (And to advocate for a JG.) I give you one example: when this pack of incompetent criminals took office in 2013, one of Hockey’s first acts was to “give” the RBA $8.9 billion. To the only institution that CAN issue Australian Dollars! Despite the fact that there was already a “crippling deficit” left behind by Swan and Bowen. Ridiculous much? So what, did Hockey borrow that money? Of course he didn’t. It was just an accounting trick, namely transferring funds from one account to the other. Just to make Labor look worse, to INCREASE the deficit. Did the money get destroyed and new money issued? Who cares?

  78. John Armour

    “What of the connection between Sweden’s high taxes and its comprehensive social security system?”

    Kathy, when the Swedish state spends by providing services that the people demand, that money continues to circulate within the economy until it is gathered back up in taxation.

    To not do so would risk inflation. Money flowing in has to be drained out.

    Superficially, this looks like taxation is funding spending, along with a bit of borrowing from the private sector to make up any shortfall.

    The reality is quite different however, and the reason it’s important to understand the difference is because austerity economics is built on the myth that the government is financially constrained, rather than constrained by the physical capacity of the economy.

    Governments of a neo-liberal bent depend on our remaining ignorant the better to promote their ideology.

    Our ignorance makes it easy for them to forestall the implementation of policies that would advance the public good, such as full employment such as we enjoyed in the 25 years following the end of WW2.

    Hockey’s “lifters and leaners” argument was a sick joke, at our expense.

  79. John Armour

    Zolbex…great comment.

  80. kathysutherland2013

    Well, whatever the reality, I’m happy to pay higher taxes if I get what Sweden gets! A recently- arrived Swedish friend is always surprised at having to pay for sevices. But then maybe this mob would just take the money and pay for helicopter rides! Whose austerity are we talking about here?

    I just get miffed when big corporations don’t pay their share. If they were forced to, perhaps the government wouldn’t be able to use the excuse that money is short so they can’t pay for Gonski, Medicare etc etc

  81. John Kelly

    Andrew Church, in answer to you first query, When Whitlam was PM we still operated under the gold standard and our dollar was pegged to the $US. It wasn’t until 1983 when Paul Keating as Treasurer, adopted a fiat currency and floated the dollar. Whitlam’s attempt to borrow petro-dollars wasn’t a smart move but at least it was for major projects that would have employed a lot of people and Keating’s subsequent moves would have greatly reduced the cost of that money. In 1980 our dollar was worth $1.25 US. Today, we don’t borrow any foreign money.
    The Myths that I have debunked are all part of our present system. All these things are happening now. Kaye Lee is talking about the accounting side which is a separate issue.

  82. John Kelly

    Andrew Church, re your second post, the explanations given about each myth were self-explanatory albeit brief, however i will treat each individually in subsequent articles. or better still, you take some time off and watch this video:

  83. LOVO

    January 3, 2016 at 10:40 am
    “Here’s an idea for a series – economic myths for dummies! ”
    Great idea Kathy, I, as a labourer, have been having a hard time trying to get my head around the explanations by J.K. and commentators. I think that the only thing I have ‘got’ is that MMT explains what ‘is’ already going on…… the rest just makes my head hurt 🙁
    One other ‘thing’ I ‘got’ is the great need for this topic to be ‘mainstreamed’ to all Australians before the next election.
    To John Kelly and other commentators ” I genuflect in your general direction(s)”……… I’m off to get a Bex l!!

  84. John Kelly

    Lovo, no genuflections please. Had enough of that as a child.

  85. kathysutherland2013

    Lovo, I, too, respect all those who understand this stuff, but I’m not genuflecting to anyone! I grew up as a Catholic – nuff said! I’ll pass on the Bex, but will pour another red!

  86. totaram

    Zolbex: “So what, did Hockey borrow that money? Of course he didn’t. ”

    Correct me if I am wrong, but he did “borrow ” that money. The trick used here is that when the Federal treasury spends, it issues bonds, dollar for dollar, and therefore technically “borrows” that money. (This is the job of the AOFM in treasury) This serves to perpetuate the myth about “maxing out the credit card”. What people don’t realise is that the government is unconstrained in its ability to issue bonds, just as it is unconstrained in its ability to issue currency. However, simply issuing currency is labeled as “printing money” (hence BAD – inflation!) while issuing bonds is “borrowing” (not so bad). Issuing bonds then allows government deficits to be labeled as “debt”. All this allows the “framing” of the government as being just like a business or a household – which it is definitely not.

    Further confusion is caused by the fact that State Governments are actually constrained like businesses and households because they do not issue their own fiat currency. That is why this federal government is trying to starve the states of funds by huge cuts to education and health. This would force the states to argue for a GST increase (their only recourse).

  87. diannaart

    I may never fully grasp MMT (probably because, deep down, I think it is a little bit B/S)

    However, I do completely understand and concur with:

    … the fact that State Governments are actually constrained like businesses and households because they do not issue their own fiat currency. That is why this federal government is trying to starve the states of funds by huge cuts to education and health. This would force the states to argue for a GST increase (their only recourse).

    Bleeding obvious from where I stand… sit… whatever.

  88. achu4112

    Hey thank you John. thank you all.

    I should have got back to you, shortly after my posts, doing some searches on John’s previous posts for context I discovered Modern Monetary Theory. That’s the framework of which I was completely oblivious.

    Gives me plenty to be going on with.

    My interest in economics? To find a model that supports humans to flourish as individuals, everyone with the option to accept or decline that social contract, WITHOUT needing growth and without reducing the capacity of the environment to support life.

    Evidence posits the right environment begets life, life changes environment, extinction and evolution changes life. Is long term human survival possible. It’s hard to imagine a scenario where we best the dinosaurs’ 150 million years, yet I trying to imagine what outliving the solar system would look like.

    Long term human survival is clearly* an economic impossibility, so I study some math n physics at uni for personal interest only. OK that’s my kinda ‘selfish’, what’s yours?

    * ‘clearly’: argument by intimidation (according to an entertaining math lecturer)

  89. John Armour

    Totaram: “Correct me if I am wrong, but he did “borrow ” that money. The trick used here is that when the Federal treasury spends, it issues bonds, dollar for dollar, and therefore technically “borrows” that money.”

    You’ll set the hares running with talk of “borrowing”, totaram. Those who are convinced the government funds its spending through taxation and bond issuance will throw it back in your face as proof they are right.

    Best to describe the process as an “asset swap” and of course it’s only in the event of a build up of reserves in the banking system that threatens the stability of the overnight cash rate.

  90. JohnB

    kathysutherland 2013January 3, 2016 at 9:48 am
    “..Is taxation merely a construct?…”

    No, taxes are real – as has been stated by preceding commentors; taxation is essential to regulate the supply/demand balance in the economy – thus facilitating currency inflation management as JohnArmour January 3, 2016 at 12:25 pm has already so eloquently explained.

    The form and application spread of levied taxes serves yet another purpose that is arguably just as important as regulating economic activity – the social purpose of spreading the financial burden of taxation across the general population according to the principle of ‘ability- to-pay’ and ‘benefit-received’ from community infrastructure.
    Selective allocation of taxation load across income levels promotes wealth equalisation in the community; fosters an egalitarian society where services are allocated according to need rather than private/personal wealth.
    It also serves to protect against compounding inequality of income and political influence that is now so evident in the US, Europe and Australia.

    …No you haven’t got it all wrong on tax – taxes are necessary but should be applied fairly/equitably.
    We all should be grizzling about the ever decreasing share of taxes contributed by high income groups/corporations who use every loophole availed them by neoliberal sponsored governments to evade paying their share of the tax bill through contrived trading arrangements and offshore tax havens.
    I see it as a cleverly hidden, but very effective method of effecting class warfare.
    Each day that passes increases the advantage high income earners have over low to middle income wage earners.

    The corporate/high income/big business share is now being paid by the less well off in the community – further lowering their living standards; while those well off evaders enjoy both a profit advantage over their competitors and a boost to their incomes relative to that of general taxpayers.

    Neocon Nirvana.

  91. John Armour

    Diannaart: “I may never fully grasp MMT (probably because, deep down, I think it is a little bit B/S)”

    It’s not bullshit, not even a “little bit”, but it can be quite counter-intuitive, making it sometimes difficult to explain.

    As others here have said, MMT just describes the monetary system we’ve been living with since Keating floated the dollar in 1983.

    It’s not MMT that’s “a little bit B/S”. It’s the mainstream’s depiction of our monetary system as no different from a household that’s TOTAL bullshit.

    And if that’s the bit you do understand, that’s good enough!

  92. JohnB

    Hello John Kelly, and other knowledgeable commentors,
    A query in the interest of accuracy:
    Myth-buster Number 3: It is entirely within a currency issuing nation’s capacity not to tax at all….”

    My understanding of fiat currency operation is that a monopolist sole issuer of currency must levy a tax to ensure demand for that currency by users in order to pay that tax.
    The requirement to pay tax essentially embeds value in the currency token, thus giving it enduring value as a sought after token of ‘exchange’.

    If an issuing nation chose not to to tax at all, it effectively opens the field for the creation of some other token of perceived value (perhaps a foreign currency) be locally adopted for exchange – thus taking away the essential status of ‘monopolist sole issuer’ of the fiat national currency.

  93. bossa

    Starving the states of funds is mainly about forcing them to privatise Education, Health and Law Enforcement (more or less all state services). The GST increase is just a sideline compared with the LNP’s real agenda of privatising everything. Of course the LNP would see any increase in personal liability as a positive in this class war as it places impediments in the way of, otherwise, upwardly mobile participants (i.e. competitors) in the economic system.

    The TPP will enforce all of this because its main purpose is to to remove sovereignty in favour of the corporations, placing pressure on the state governments to conform via the threat of financial ruin for interfering with their right to rape and pillage the environment.

    The LNP federal government passed responsibility for the environment off to the states, thus making them the target of Investor State Dispute Settlement conflicts.

    LNP politicians are traitors and should be dealt with accordingly.

  94. bossa


    Bonds are not debt and demonstrate a risk free investment to the private sector that also allows the sovereign issuer of the currency to determine the Cash Rate (the rate at which banks are allowed to lend to each other to guarantee credit) plus offer another channel of stimulus to the economy. They also take extra cash out of circulation when inflation is a threat and to create space for new government spending. The bonds themselves are not a government debt, but more like savings, although the interest is a debt, but as it’s paid via the sovereign issuer of the currency and so it is costless.

  95. diannaart

    @ John A

    Appreciate your thoughts.

    Since I first encountered the merest whiff of economics in my early teens, I have found it to be, well, they didn’t use the term then, but some kind of ponzie scheme… why was something that was little more than a balance sheet made so befuddling? I am not stupid, I topped all my years in high school maths – but then maths is a symphony, maths explains, maths soothes, maths offers something to anyone wishing to delve, maths is reliable – of course there is quantum physics – but at least there is a foundation for this aspect of mathematics.

    Economics never factored in aspects of life and values I thought absolutely fundamental to existence (environment, unpaid work and so on (all the factors/values that have at least been gathering some light and questioned by others far more intelligent than yours truly).

    While I did arrive at this POV independently (being self educated in many aspects) I have found nothing to identify with, in the passing years, whether economics be Keynesian or the MMT or whatever – it is not only a dismal science in that it attempts to reduce the lives of human beings into positives or negatives (which is why it has wound up so bloody complex) but it rests upon the very complexity in order to continue itself – like some king of hydra.

    And it relies on its own ambiguity for survival.

    Finally, yes, I do have a very good B/S detector.

  96. bossa

    PS2> In my last post I should also have mentioned that Government Bonds are really another form of corporate welfare as they are risk free.

  97. JohnB

    Some may find this veritable “Aladdins Cave” of MMT based educational resources helpful:
    A Macroeconomic Visualizer Resource
    From EconViz:
    “…Macroeconomics is very well suited to conceptual visualization, yet most educational material (for example in the blogosphere) remains text-centered rather than visually-centered. This site provides content in an interactive multimedia web format….”


    A Kindegarten Guide to MMT (pdf)

  98. JohnB

    A simple message from the ‘Kindegarten Guide to MMT’:

    “When the government spends money [runs a deficit] the peoples’ bank accounts go up.
    When the government demands money
    [runs a surplus] the peoples’ bank accounts go down.

    Maybe such a simple statement could be understood by ill informed ‘bogan’ voters – and blunt their enthusiasm for a return to Federal fiscal surplus.

  99. diannaart

    Yep, even I can get that simple message…

  100. Jennifer Meyer-Smith

    Well said, John Kelly.

    In economic terms, these are the encapsulated points we need to focus on to advocate to our sister/brother Aussies why voting against the LNP is imperative and why planning for what the replacement Gov will be.

    In my estimation, it will be an ALLIANCE of resurrected Greens who favour left not right, sane Labor who have NOT gone to the Dark Side, sane Indies who show backbone, some upcoming progressive parties not too caught up in their own self-importance.

    Myth busters #5 and #7 represent my predominant political stance.

    So be it!

  101. kathysutherland2013

    That’s making sense to me. Mudt put me in the “ill-informed ‘bogan’ voters” category! Though I really am trying – found the Kindergarten guide you referred to and am studying assiduously.

  102. JohnB

    When you finish ‘kindegarten’, I recommend you next step through the animated tutorial here
    Click on ‘How the Economy Works – A Visual Tutorial’ – it will run through the basics at your own pace.
    Happy learning!

  103. John Armour

    “They also take extra cash out of circulation when inflation is a threat and to create space for new government spending.”

    Not too sure about that bossa. If it’s just a swapping of bonds for excess reserves then it has no effect on the money supply because banks don’t lend reserves.

    That sounds a bit like the textbook version of “open market operations” which is being increasingly questioned.

    It’s the ability of commercial banks to create loans that drives the money supply and it’s taxation that takes cash out of circulation to manage demand.

  104. John Armour

    JohnB: “A query in the interest of accuracy:

    Myth-buster Number 3: It is entirely within a currency issuing nation’s capacity not to tax at all….”

    Yes, that caught my eye too. I think John could’ve worded that a bit better by adding “if the sole purpose of taxes was to fund government spending”, which is what I think he meant.

    Here’s a cut/paste from the speech (“Taxes for Revenue are Obsolete”) by Beardley Ruml, the NY Fed Chairman that John refers to in his article.

    “What Taxes Are Really For”

    “Federal taxes can be made to serve four principal purposes of a social and economic character. These purposes are:

    (1) As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;

    (2) To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

    (3) To express public policy in subsidizing or in penalizing various industries and economic groups;

    (4) To isolate and assess directly the costs of certain national benefits, such as highways and social security.”

  105. John Armour

    JohnB…Post script to my comment above…

    Beardsley Ruml seems to have left out the most important reason for taxation!

    To quote your good self:

    “My understanding of fiat currency operation is that a monopolist sole issuer of currency must levy a tax to ensure demand for that currency by users in order to pay that tax.

    The requirement to pay tax essentially embeds value in the currency token, thus giving it enduring value as a sought after token of ‘exchange’.”

  106. Kaye Lee

    I do not understand that at all. The requirement to pay bills is what imbeds value in this ‘token of exchange’ for most of us. Since it is all accomplished by computer keystrokes, how does that create a demand for our currency?

  107. John Kelly

    JohnB, yes you are right. Taxes in some form are a necessary part of a fiat currency for the reasons you state. My point, poorly constructed, was that all government bills could be paid without taxes. I will make a small edit to clarify the point.

  108. John Armour

    Kaye Lee: “Since it is all accomplished by computer keystrokes, how does that create a demand for our currency?”

    Keystrokes or cash makes no difference. It’s all currency.

  109. John Kelly

    Kaye Lee, we cannot pay our taxes with $US dollars be they notes or computer strokes. We still need $A to do that.

  110. Kaye Lee

    I pay bills to the US with no problems whatsoever John. I’m pretty sure they can figure out the exchange and charge accordingly regardless of what currency my bank account is in.

    If I was living in England and I had a tax obligation in Australia I am pretty certain they would accept a bank transfer to settle my obligation.

  111. John Kelly

    No, Kaye you don’t. Any bills you pay to the US go through a complex set of accounts held by the RBA. Your $A money never leaves Australia. If you were in England you £UK would go through the same process in reverse, only this time with the Bank of England.

  112. Kaye Lee

    What do you mean no I don’t? I patently do. Yes there are keystrokes in between. So what? I don’t need American dollars to pay my bill. You are suggesting that the value of the Australian dollar comes from me having to pay taxes in AU$. I am suggesting that its value to me is in its purchasing power and has nothing to do with taxation.

  113. Kaye Lee

    So some guy explains it by saying the only way to get out of this room is to get one of my business cards. Sorry John but I am well and truly over analogies that seem entirely irrelevant to what I am asking.

    I know you are trying to be helpful but I don’t think you understand my questions.

  114. John Kelly

    Kaye, it has EVERYTHING to do with taxation. The govt. spends it into existence and says you must have it to pay your taxes. The government is the monopoly issuer and only accepts $A no matter where you are. That is what gives it value. Try not to confuse the accounting with the substance.

  115. Matthew Oborne

    a Modern song where he raps or whatever you call it about education failing to explain the world to children.

  116. Kaye Lee

    No John. The government does not say I must have Australian dollars to pay my taxation. As I have said before, I am sure they would let me pay them regardless of what denomination my bank account is in just as my US suppliers are paid from my Australian bank account. What keystrokes happen in between has not in any way affected my need for US dollars.

  117. Roswell

    I remember my Dad paying his tax in stamps.

  118. JohnB

    You are confusing the issue by introducing overseas money transfers – that involves the separate issues of currency conversion and transfers.
    The conversion rate is determined by the relative strength of the two (floating value) currencies – that value a resultant of the economic setting/conditions/productivity etc in the respective nation.

    The Australian govt. only accepts payment of taxes and inward money transfers in $AU – the payment must first be converted from the foreign currency to $AU by buying $AU (at the going exchange rate) with their foreign currency.

    I think you missed the point being made in that short vid – in a sovereign (monopolist) currency issuing nation there is only one token of exchange that every person/business must possess to pay their taxes and that is their local monopolist fiat currency – there is only one source of that currency – national govt. issued money.

    The need for that currency cements it in place as the common token of exchange in that nation.

  119. Andrew Church

    Thank you all for your tolerance and assistance re skepticism of my first two posts.
    My first post of thanx was in the name

    achu4112, as follows: er, later, after what seems like a lecture/rant, how best to use this new MMT knowledge. This is me thinking out loud, brainstorming without any pushback, please tear down any notion that’s just “nuts”. I have a huge ego, easily dented, but even easier to polish to outshine…

    This is amazing, but a tough sell to the electorate. John Kelly’s 7 statements of facts is the wrong place to start IF you are trying to advocate the case for NO AUSTERITY policies in Australia, in fact the reverse, there’s plenty sound economics in the neo-con vocab to support it, “deficit doves” – deficits to stimulate economy when needed, surpluses when things are great. That near ten years of global recession (we’ve avoid) puts us in good position, but potentially disastrous ? NO don’t play that card, til we think it through, need some brain storming.
    MMT should be the kicker, at the end of argument, something people can look up.

    Voters will love things like “how do you want your mortgage: paralysis by black hole in your back account, or harmlessly on the Govt’s excel spreadsheet? HERE leave a citation to the relevant bit or MMT re surplus mostly requires huge increase in personal/private debt (the myth is that in deficit the Govt crowds out, competes against the private sector for borrowings hence, low investment and growth).

    John Kelly, not a crticism, your article is perfect for me, I thank for exposing me to this which must be explored.
    But to convince people before the next election, 7 anti statements is just the Joe Bijelke Peterson arguement of: “you’re wrong wrong wrong wrong…” by the time you get to number seven, you’re a ratbag, or extremist, in comparison the economics the electorate has spent a life time misunderstanding.

    Anti MMT economic arguments have the advantage of infinite finesse, like conspiracy arguments, can argue into and around any position it want to justify or discredit (that’s almost true) SO absolutist positions on MMT has no place in effective rhetoric (language to successfully advocate your case), keep your Aostotelian political hat on and use language appropriate to your audience, ie your given environment.
    SO eg.
    Isn’t govt spending constrained? Yes of course it is, it can spend its way into trouble almost as easily as it can by imposing austerity. BIG spending can still very BAD …. (only need when economy is stuffed from big deficits, citation needed) re define big, and it’s total independence from bad spending.

    We need to accept and work with the fallacious tropes people already believe, neuonce and finesse around to the position you are advocating THEN “slapem’ with MMT” once you’ve won the argument. Not sure how to do that yet

    but NEVER get dragged in to arguing validity of MMT, provide a precise citation to the ‘interrogater’ let the public decide, we are advocating policies for a better Australia, MMT has nothing to say about that.

    Same way an academic stance on climate change should never argue that “climate change is real”. LET the topic move to that – you lost right there. Argue about good policy, that accounts all costs, UNLIKE the DEFICIT a reduction of earth’s capacity to support life WILL be passed on to each generation. That’s too loopy for the electorate, need an argument in terms of sustainability etc.

    I’m gonna check out more MMT, here’s my original thank you, came up in different name:

    achu4112January 3, 2016 at 3:09 pm
    Hey thank you John. thank you all.

    I should have got back to you, shortly after my posts, doing some searches on John’s previous posts for context I discovered Modern Monetary Theory. That’s the framework of which I was completely oblivious.

    Gives me plenty to be going on with.

    My interest in economics? To find a model that supports humans to flourish as individuals, everyone with the option to accept or decline that social contract, WITHOUT needing growth and without reducing the capacity of the environment to support life.

    Evidence posits the right environment begets life, life changes environment, extinction and evolution changes life. Is long term human survival possible. It’s hard to imagine a scenario where we best the dinosaurs’ 150 million years, yet I trying to imagine what outliving the solar system would look like.

    Long term human survival is clearly* an economic impossibility, so I study some math n physics at uni for personal interest only. OK that’s my kinda ‘selfish’, what’s yours?

    * ‘clearly’: argument by intimidation (according to an entertaining math lecturer)

  120. JohnB

    @John Armour January 4, 2016 at 7:54 am
    I can’t fathom point 4 of “Taxes for Revenue are Obsolete” by Beardley Ruml
    “What Taxes Are Really For”
    …(4) To isolate and assess directly the costs of certain national benefits, such as highways and social security.”

    How does a tax isolate and assess? Any ideas?

  121. Kaye Lee

    To a layperson it seems to mean that they need enough to pay for infrastructure and welfare.

  122. John Armour

    JohnB: “How does a tax isolate and assess? Any ideas?”

    The latest buzzword for that is “hypothecation”, the “costs” being the opportunity costs viz a viz the capacity constraints of the economy.

  123. Kaye Lee

    How do taxes assess opportunity cost?

  124. JohnB

    John Armour/Kaye,
    “To …[offset].. directly the costs of certain national benefits, such as highways and social security.” perhaps is the meaning intended.

    Obfuscatory language is many economist’s long suit.

  125. kathysutherland2013

    Thank, JohnB.

    Faint yet pursuing.
    I think that one comes from the Bible. Not a bad source of quotes.

  126. Kaye Lee


    If it means to offset the cost then taxation, at least in part, subsidises government spending. I realise it does not have to, that we can spend whatever we please without having to collect tax. I also realise that taxation serves other purposes but if we talk redistribution, as I mentioned before, unless taxation is spent on things the community need, there has been no redistribution.

  127. John Armour

    Andrew Church,

    I’ve been around MMT for more than 6 years, posting comments wherever I saw an opportunity.

    The take up of MMT insights over that period has been phenomenal and very encouraging.

    If somebody had told me back in 2010 that in 2016 that Hillary Clinton would be sharing top billing with another Democratic candidate for President of the United States, who had as his chief economic advisor a leading advocate of MMT (Stephanie Kelton) I would’ve said “dream on”.

    There are many opinions on how best to promote MMT.

    Just have a look at the flow of comments under Bill Mitchell’s recent article “Bernie Sanders on the right track but need to address the main game”

    If you can believe you can bring another dimension or useful insights to the debate, please go for it.

    The public’s understanding of MMT will advance with successive funerals of orthodox economists and the help of the internet.

    Failing that, there’s therapeutic ridicule:

    “Why, sometimes I’ve believed as many as six impossible things before breakfast.”

  128. JohnB

    Yes Kaye (12:42pm) – but I would interpret it as a ‘nominal’ hypothesised offset.

    ..unless taxation is spent on things the community need, there has been no redistribution…
    I agree – there is no social redistribution benefit in wasteful or poorly (inequitably) targeted spending.

    I suggest the high level of superannuation virtually uncapped taxation benefit available to high income earners and negative gearing arrangements for wealthy investors are examples that fall into the category of advancing financial inequality rather than social fairness or egalitarian objectives.

  129. Kaye Lee

    So we agree that taxation is used to fund government spending but that government spending is not constrained by taxation revenue (she asks doubtfully)?

    And on the subject of bond issuance – it is not the RBA that decides to issue bonds. The Treasurer does that to cover government spending. When I ask why they would do that when, as you so rightly point out, they could just credit an account at the RBA and away we go (or just use deficit spending- same thing really), you say they do it to control the overnight interest rate but that isn’t why they were issued in the first place. How they are traded is an entirely different matter which is where the RBA, other banks, and investors step in. I also think, as I said before, that interest rates (or more importantly money supply) could be controlled by different means. Why would the government issue bonds on which they must pay interest if they were not using that mechanism for money creation?

  130. totaram

    Kaye: treasury issues the bonds supposedly to “cover” govt. spending by “borrowing” although it is just an asset swap.. The RBA enters the bond market from time to time to ensure that the yield on bonds stays close to the RBA’s target rate for Monetary Policy. These two operations are independent. Because of this, it can happen at any time that the total value of bonds outstanding is nothing like the government’s total deficit. So of course the bonds are a totally unnecessary side issue. The RBA could simply pay interest on bank reserves to meet its Monetary policy goals, and some central banks do this. And of course treasury could simply get AUD from the RBA as required, without issuing bonds. The whole rigamarole is constructed by neo-liberal macro-economic groupthink, which serves very well to obfuscate what is really going on. Indeed, the idea is to keep giving the impression that the govt. functions like a household.

    As pointed out by others, the financial services industry loves govt. bonds, so much so that they continued to be issued when Costello had his wonderful “surplus” budgets.

    diannaart: if you like your maths you will appreciate the National accounting identity and sectoral balances. MMT builds on this very solid foundation and it requires nothing but simple school Algebra and logic. No complex variables, or Lebesgue Integrals or Number Theory for that matter!

  131. JohnB

    Kaye 01:44pm,
    “.So we agree that taxation is used to fund government spending..”
    No – because it does not – tax payments received via the ATO are credited to consolidated revenue.
    As far as I’m aware, there is no facility, provision or direction for the ATO to divide/allocate/direct received amounts to any account other than consolidated revenue.
    There is no connection between tax revenue received and govt. spending – they are two distinctly separate regulatory tools.
    A dedicated ‘tax levy’ may well be an exception – but I’m not sure of the administrative procedures that then apply.

    I think a more accurate interpretation of Beardley Ruml’s statement
    “…(4) To isolate and assess directly the costs of certain national benefits, such as highways and social security.” may be ‘notional nominal offset’ – the relationship existing only in the magnitude.

    I agree that Aust. government spending is not constrained by taxation revenue.

    There are many quite involved questions in you last para. that I will answer as best I can in a comment to follow.
    I too am still learning macroeconomics.

  132. Kaye Lee

    If taxation goes into consolidated revenue and is never then divided/allocated/directed anywhere then consolidated revenue must be f’ing ginormous by now.

    “There is no connection between tax revenue received and govt. spending.”

    I don’t know how to say any more clearly that I understand our spending is not constrained by our taxation revenue and that we can spend whatever we please and we don’t need tax or bonds to do that. Where we disagree is that you guys sat the revenue is “destroyed” or that it is accumulating in “consolidated revenue”. No it isn’t. It is offset against expenditure, what the rest of us call spent.

    And of course opportunity cost is “notional” or “nominal” or all of those other adjectives designed to confuse, though as a maths person, I am hopeful that they are using appropriate modelling with defined inputs to determine it. What that has to do with taxes is the part I do not understand.

  133. John Armour

    JohnB, Kaye Lee,

    JB, if you’ve got some time on your hands, trawl through the comments on the article below where Kaye Lee has raised these concerns before.

    I thought we’d sorted it all out but it seems not.

    That’s more a reflection on me than you Kaye Lee as I was not able to explain. So my bad.

    Maybe JohnB can describe things differently, in a way that suits your style of learning.

    The Mystery of Money or how I learned to stop worrying about debt and deficits.

  134. JohnB

    @Kaye 3:46 pm
    “..Where we disagree is that you guys sat the revenue is “destroyed” or that it is accumulating in “consolidated revenue”. “
    Inputs to consolidated revenue are only electronic ‘account’ entries to a ‘budget’ balance sheet.
    I would not call it ‘spent’ (it is no longer circulating in the active national economy), it has merely been financially ‘accounted’ for.
    It is ‘destroyed’ in as much as that withdrawn ‘money’ plays no part of the national domestic economy.

    In the context we are discussing, the terms “notional” or “nominal” have nothing to do with tax, but everything to do with the politics, ideology (or spin) implemented to justify/legitimate (or obfuscate) a spending measure.

  135. LOVO

    Oh Mods ( off topic) But a post by Leftturn2016 seems to have disappeared. Mayhap Kaye Lee will know more about that, mm.

  136. bossa

    Taxation has always been a particularly strong propaganda weapon, a tool used against the welfare state to vindicate cruelty and persecution. Don’t expect the conservatives to change their rhetoric soon as it’s been a highly successful motivator and wedge.

    The average punter believes that they are somehow being robbed by a bunch of bludgers because they are told repeatedly that their taxes pay for welfare and other government programs. Wasn’t it Joe Hockey who said that taxpayers worked three months of the year just to pay for the “leaners” before they actually took home any money for themselves and their loved ones? It’d be ironic if said loved ones were also unemployed.

    The way the economic system is currently portrayed allows the political class to continue to rob Australia and Australians of wealth and freedom ad infinitum.

  137. John Armour


    Are you familiar with this paper by Stephanie Bell (now Kelton)?

    To me, it’s essential reading for anybody trying to get on top of this contentious issue.

    “Can Taxes and Bonds Finance Government Spending?”

    Here’s an extract that offers an interesting way to look at the issue:

    “Federal Reserves notes (and reserves) are booked as liabilities on the Fed’s balance sheet and these liabilities are extinguished/discharged when they are offered in payment to the State. It must be recognised that when currency or reserves return to the State, the liabilities of the State are reduced and high-powered money is destroyed.

    The destruction of these promises is no different from the private destruction of a promise once it has been fulfilled. In other words, when an individual takes out a loan, she issues a promise to a bank. Once she ‘makes good’ on that promise (i.e. repays the loan), she may ‘destroy’ that loan debt (liability) by eliminating it from her balance sheet.

    Thus, while bank money (M1) is destroyed when demand deposits are used to pay taxes, the government’s money, HPM, is destroyed as the funds are placed into the Treasury’s account at the Fed. Viewed this way, it can be convincingly argued that the money collected from taxation and bond sales cannot possibly finance the government’s spending. This is because in order to ‘get its hands on’ the proceeds from taxation and bond sales, the government must destroy the money it has collected. Clearly, government spending cannot be financed by money that is destroyed when received in payment to the State!”

  138. John Armour

    The average punter believes that they are somehow being robbed by a bunch of bludgers because they are told repeatedly that their taxes pay for welfare and other government programs.

    That’s it in a nutshell, bossa.

    And because the story about taxes funding spending is so “credible”, the average punter then accepts cuts to those programs as “fiscal necessities” while being skillfully guided to aim their hostility at the innocent victims, such as the unemployed, and not the conniving government.

  139. Jennifer Meyer-Smith

    Would it be possible to show me, and possibly others, a flow chart of how spending and collecting for positive community purposes can be in tune with a monetary system that collects its money by government?

    This discussion of where money starts, where it goes and where it gets parked to balance inflation while making it look like a domestic household, is still very perplexing to me.

    It all seems to work to the total contrary of my traditional understanding!

  140. Kaye Lee

    “Oh Mods ( off topic) But a post by Leftturn2016 seems to have disappeared. Mayhap Kaye Lee will know more about that, mm.”

    Geeze Louise this has been a tough day. Why don’t you ask Turnleft LOVO. I need a break from the lot of you.

  141. LOVO

    For what it’s worth Kaye Lee I think your comment was somewhat misinterpreted and you quickly apologised for any perceived transgression :/ … it does seem odd to me that it went so quickly.. ‘south’, I thought it was a great idea from Alison. I do hope she will return.
    Don’t get too disheartened Kaye, Alison 🙂 ….it’s just one of those mad f*cking witches of a week 😆
    * …and no I am not referring to either of you in that last remark!

  142. bossa

    “That’s it in a nutshell, bossa.

    And because the story about taxes funding spending is so “credible”, the average punter then accepts cuts to those programs as “fiscal necessities” while being skillfully guided to aim their hostility at the innocent victims, such as the unemployed, and not the conniving government.”

    Until this deliberate misrepresentation is corrected then the game will continue and people will vote against their best interests.

    We need some kind of campaign that rams home the facts so people understand that they are being manipulated.

    The MSM ignored 100,000’s of people marching in the streets over the last two years. Perhaps it’s time for more drastic measures? Outrageous performance art might work?

  143. bossa

    The idea that money is destroyed when government issued money returns to the state seems to be a difficult concept for many of us to understand. After all, most people still think of money as a physical thing and not just a number in a computer.

    Perhaps an easier way of explaining it might be via simple algebra.

    When the government spends money into existence that is a debt, a liability. That would be seen as a minus amount (-$n).
    When the government sees returning money from its expenditure via taxes, that would be seen as a plus amount (+$n).

    A very basic equation: -$n+$n = 0 should be enough, from my limited understanding, to explain this destruction of money.

    Try not to laugh, a smile will do 😉

  144. kathysutherland2013

    I think I’ve worked out why I keep getting confused – I’ve never regarded tax as a bad thing!

  145. JohnB

    @Jennifer Meyer-Smith January 4, 2016 at 7:15 pm
    There is a set of diagrams and tutorials on MMT here that may help you.

    I expect the specific information you are looking for would likely be part of more complex overall MMT diagrams.

    Your objective should not be to seek or analyse models/diagrams that mimic domestic household finances because a sovereign currency issuing govt. has very little in common with a household economy.
    In fact the ‘household economy’ model is the primary source of the populace’s fundamental misunderstanding of fiat currency macroeconomic reality.

    The first hurdle to be crossed is ‘unlearning’ gold standard grounded economic fundamentals – they do not apply to fiat currency systems.

    From Bill Mitchell:
    When reading about modern monetary theory I suggest the following procedure:
    • Forget who you are.
    • Forget what you think of government – good or bad – unless you are going to be able to get rid of government (that is, establish pure communism) you are stuck with it.
    • Forget what you think of social policy – you may hate the unemployed or you may feel compassion – forget all emotions.
    • Forget what nation you live in – it doesn’t matter.
    • Forget all prior economic concepts and training (if any).
    • Then just try to understand what you read.

  146. bossa

    @ kathysutherland2013: If people understood that their taxes weren’t paying for infrastructure and social programs do you really think they’d accept the paying of it?

    The entire financial system has been kept from us in order to perpetuate the system, which currently continues to deliver our lives, labour and public assets into the hands of the elite.

    For those questioning this by way of illustrations that deny the banks a reason for acquiring farms etc; then why are so many Australian farms being bought out by large corporations these days?

    There is a Corporate Feudalism sweeping the globe, aided and abetted by public officials, who, when they screw up like Joe Hockey did, still get their kickbacks as they are farmed out to cushy gigs as diplomats.

    I am despondent.

  147. JohnB

    @bossa January 4, 2016 at 10:32 pm,
    Good enough for me – physical fiat money is a worthless token when withdrawn by govt. from circulation – unissued digital money doesn’t even exist until it is spent back into the economy.

    Whether it’s destroyed money, dead money, or spare tokens, it’s a minor bookkeeping/admin concern not worth getting stressed out about – provided the govt. does not incur foreign debt.
    What is important is maintaining an efficient, productive, stable, equitable social structure with near full employment.

  148. bossa

    Agreed John

    The bigger the game of Monopoly the bigger the cash that comes with the game.

    The money is meaningless, a major issue that people just don’t ‘get’. It’s only a unit of measurement and not a precious object.

  149. Annie B

    Re : JohnB ( January 3, 2016 at 7:29 pm )

    “Maybe such a simple statement could be understood by ill informed ‘bogan’ voters – and blunt their enthusiasm for a return to Federal fiscal surplus.

    The bogan voters might be blunted, but their wished for return to Federal fiscal surplus will be one helluva long time coming. By the time it arrives, the bogans will all have great-grandchildren ( putting it in as nice a way as I can think of ). The fiscal duties and knowledge by this current Government basically are non-existent. They have blown out the deficit enormously, and with the way things are – world wide, it will be many many decades before it is restored to close to a small deficit or small surplus ( preferably a small deficit ).

    Kaye Lee …. I am still in your corner about your concerns over the correct accounting procedures ( and from last look – there IS such a thing !!! ) by the current Government, the RBA, the banks, and whoever else has their fingers in grubby money pies. With all due respects to all who have tried to explain this – particularly John Kelly – it still does not make any sense to me that tax monies – which we SEE listed on our pay-details per week, fortnight or month, cease to be of any consequence and are ultimately ‘destroyed’ ???

    WE don’t get the tax that has been removed, we don’t even see it, so who does get it – and if someone does, why is it ultimately ‘destroyed’ ( electronically I would imagine ). ?????


    I have read all of the above comments – took me ages. And a thought struck me. While all here ( except me ) have some reasonable, some good, some excellent knowledge of monetary dynamics – not necessarily Modern MT, which is only a theory – early stages stuff, commenters here are 1 millionth of the population of Australian voters. The problem then is, that voters – even the smarty pants lot, don’t have the foggiest clue as to what is what, when it comes to federal money, it’s management, what for and why it is used, how its’ use ( and abuse ) reflects back to ourselves, and what the hell we can do about it. Some have an inkling, some don’t care a hoot, and others simply don’t have one clue …. it’s like we go to the polls with blindfolds and blinkers on, when it comes to our Commonwealth fiscal welfare.

    Not a good thing – no matter who we vote for. Isn’t there a simpler way of explaining things ? Surely – there has to be.

    …… Cheers …….

  150. Florence nee Fedup

    This is probably silly. We think of money having value in it;s own right. Maybe we should be seeing it as a means of exchange representing something else.

  151. JohnB

    Annie B January 4, 2016 at 11:42 pm,
    The deficit level doesn’t matter provided all govt. debt is denominated in $AU.
    It is mainly money owed to ourselves via an asset swap – it is no-risk bonds interest bearing provided for financiers to park profitable park their spare reserves. The govt. doesn’t ‘sell’ bonds – financiers seek and buy them as needed for maximum advantage.

    The main concern with this present govt. is profligate waste and misdirection of our nations resources and citizen generated common wealth.
    Money that should be building our nation is going offshore to wealthy tax evaders, being dispersed to transnational corporations, their political sponsors and private business interests for little or no benefit to the populace of the nation, subsidising fossil fuel interests while hobbling AGW/renewable energy action.
    No expense is spared when it comes to their own entitlements.

    The citizens needs are not their priority – cuts to education, medicare, hospitals, NDIS, NBN, CSIRO womens crisis centres, indigenous health etc, etc. demonstrate that reality.
    Their domestic infrastructure investment is mostly in roads – and even that investment is to increase the wealth of companies that need work for their tunnel machines and road building equipment – the NBN project has been bastardised so as to feed Murdoch, Telstra and various other parasitic entities that will suck on the citizens teat for decades to come.

    Everywhere one looks they are wasting our common wealth away to private interests.
    Instead of building our nation they are building bigger more powerful corporations to fleece us into the future.

  152. JohnB

    @John Armour January 4, 2016 at 6:41 pm,
    Thanks for that link.
    I am familiar with Stephanie Kelton’s work – though I have not read her paper you linked to.
    Have viewed some of her youtube videos and have run across quotes from her in my internet travels.

    Am pleased she is advising Bernie Sanders – Bill Mitchell is travelling to the US this week and will probably meet up with her – (though I have no direct knowledge of Bill’s plans).

    Will look through the Kelton’s paper over the next few days.

    I think we worry too much about the fate of money taken from circulation – a hangover from the gold standard days.
    It is no longer active in the economy, physical money (if any) has little or no intrinsic value, digital numbers aren’t money either – just historical records of past moneyflows.

    It is the efficient, stable and equitable management of the ‘live’ economy we should concentrate on.

  153. Annie B

    John B ….

    Thank you for your explanations and comments about the mis-management of our common wealth, by the current Government. That’s what I meant actually, without putting it in detail, when I said ” The fiscal duties and knowledge by this current Government basically are non-existent.” – and – ” federal money – – – – – how its’ use ( and abuse ) reflects back to ourselves ….”

    Then I went on and got all tangled up in the deficit thing, and proper accounting methods. Admittedly, I am in the age group where I remember well, the basis of the gold standard – which now is extinct. And as a total klutz when it comes to monetary theories and maths in general, I probably shouldn’t even make any comment. !! 😉

    You have shed some light on a couple of the queries I have, and for that I thank you. Although the ultimate outcome from this governments’ indiscretions, are not at all good.

  154. Jennifer Meyer-Smith

    Thanks JohnB,

    I’ll have a look and try to take on board what Bill Mitchell advises.

  155. John Armour

    Kathy, Jennifer, Annie B,

    Here’s a simple metaphor I once used that some said was helpful.

    The way money enters the economy is not unlike a hydro electricity scheme.

    The dam that feeds the turbines has an infinite supply of water (from free rainfall) similar to the way government can create all the money it needs with keystrokes.

    Water flows through the turbines generating electricity before flowing to the sea, after which that water has no further use as it has lost its hydraulic head (pressure).

    It would make no sense to pump that waste water back up into the dam because rainfall (as in “the government”) keeps it topped up. The same applies to taxes.

    The electricity generated drives the economy, gets us off our butts to produce all the goods and services we demand as a functioning society, leaving nothing behind but those goods and services.

    Government spending is a one-way flow, not one cent of which is borrowed, despite the repetitive and misleading use of that word.

    In the limit, every cent of government spending “flows to the sea”, even money that is diverted into savings because it too will be spent (eventually) and nibbled away by taxation.

    Superficially it might seem that the argument about whether taxes do, or don’t, get recycled is one of semantics but this misses the critical point: if the public can be tricked into believing that taxes do fund spending, it’s an easy sell to convince them cuts to welfare are what fiscally sustainable policy demands, and we cop it.

  156. kathysutherland2013

    I always thought my taxes WERE paying for social programs and infastructure. That’s why I was happy to pay them.

  157. John Armour

    “I always thought my taxes WERE paying for social programs and infastructure. That’s why I was happy to pay them.”

    So was I Kathy. Most however see tax as theft and the Right is happy to foster that belief.

  158. kathysutherland2013

    All this is really, really depressing. I am trying so hard to undersstand all this – following the links, watching the videos that everyone has posted – but I’m struggling. I don’t know what percentage of Australians would be making this effort – not everyone has the time, let alone the motivation – so the Government holds all the cards and can say what they want. The thing is, we’re full of misconceptions that are so hard to shift! I’m grateful to everyone who’s trying to clear it up, but I must be incredibly stupid!
    Where’s that red wine?

  159. Kaye Lee

    Kathy you are not stupid. In my opinion, the problems arise because MMTers think accounting is irrelevant and that is always going to cause problems for the rest of us. Hold onto the thought that our spending is not dependent on or constrained by taxation revenue or bond issuance. When they start talking about money destruction and overnight interest rates etc, it just gets confusing. They are right in saying that we can spend whatever we please (within certain parameters ie there is unused productive capacity in the economy eg underemployment).

  160. Jennifer Meyer-Smith


    just a suggestion to do as I’ve just done:

    “I just gave my details to GetUp to help as a volunteer legal advocate for their People-Powered Legal Action.

    GetUp is also still looking for donors to The Grata Fund, Australia’s first public interest fighting fund. A Fantastic grassroots initiative.

    Get involved and feel good about being part of the reason for a reversal to the crimes being done by the Government and public officials regardless of the consequences to our quality of life and the protection of the environment.”

  161. JohnB

    Give it a rest for a while kathy – you need time to absorb the newly discovered reality. Time is needed to consolidate and rationalise your thoughts.
    Because your deeply ingrained perceptions of national economic management have been turned on their head a period of confusion is common.

    I found that watching this Bill Mitchell video Framing Modern Monetary Theory was a break away from absorbing complex detail.

    Analysis of the language, analogies and metaphors used by neoliberal conservatives reveals much about how cleverly they manipulate the public’s economic naivety and ignorance – also contrasts fiat MMT empirical experience vs entrenched ‘gold standard’ myths.

  162. John Armour

    “Hold onto the thought that our spending is not dependent on or constrained by taxation revenue or bond issuance.”

    If you accept that Kaye Lee, there’s really nothing left to debate for that’s the core insight of MMT.

    It’s misleading however to say MMT dismisses the accounting, as a core strength of MMT lies in the sectoral balances, which is totally ignored by mainstream economics.

  163. Kaye Lee

    John, I accepted that a very long time ago. I thought I had made that abundantly clear. I don’t think I am debating. I am asking questions, many of which remain unanswered in my mind despite repeated attempts by all of you very patient people.

    When I say accounting I am talking about government balance sheets, not sectoral balances. That is where my problems lie.

    I also am not comfortable at all with explanations as to why bonds are issued. They seem completely unnecessary to me.

    Also, you say when money is paid to the government it is destroyed. I say it is just sitting there waiting to be paid back into the private sector.

    You say taxation creates demand for a currency because it must be paid in that currency. I don’t follow that either because it’s all just keystrokes.

    It’s those sort of issues that cause me problems.

  164. John Armour

    “I also am not comfortable at all with explanations as to why bonds are issued. They seem completely unnecessary to me.”

    Your instincts are correct. If it wasn’t for vested interests bond issuance could be dispensed with.

    But that would let the cat out of the bag wouldn’t it.

  165. diannaart

    Thank you Kaye Lee, for finding the words I am incapable of locating while my primitive reptile brain keeps screaming – “it is all bullshit, clean the slate and start again”.

    Is MMT an attempt to fix an already, beyond hope, broken system?

    (slinking off, knowing I probably have no credibility left – except for the bizarre compulsion to express my own sincere understanding – such as it is).

  166. Kaye Lee


    The way I feel about MMT is it is a realisation of the possibilities that having a sovereign currency provides where you can create money as you please (that’s what they are getting at when they talk about fiat currency not tied to a gold standard).

    They say it is the way things operate now but I disagree with that because if it was, then we wouldn’t be issuing bonds. The fact that we do issue bonds means to me that we are not operating this way at the moment and looking at government balance sheets only confirms this to me.

    But I am patently not an economist.

  167. diannaart

    Thanks, Kaye Lee

    I was thinking it (MMT) was a method to manage present situation (big mess).

    I really think there is a lot of each-way betting going; money can be issued any time through a sovereign currency except when it isn’t; bonds

  168. John Armour

    Bill Mitchell:

    “I often read comments like “if we introduced MMT …” or “under MMT policies …” or “when MMT becomes the norm”, All of which, implies that MMT is a regime that we would move to if society was more enlightened and would open up a new range of policy options that a truly progressive government might pursue.

    This is tied in with other comments, specifically about the Job Guarantee, which suggest that MMT is a progressive doctrine or a left-wing approach to economic policy-making and what is holding MMT back from being introduced is the right-wing conspiracy to maintain hegemony.

    I understand all these comments are well intended and people are genuinely attracted to some of the policy options that MMT proponents advance. This is notwithstanding, what I consider to be some doctrinal and irrational resistance to proposals such as the Job Guarantee.

    But the conception that we might move to an MMT world where enlightened policy will free us from the yoke of capitalist exploitation is plain wrong.

    The fact is that we are already living in the MMT world. We interact with each other every day in the MMT world. The monetary system, whether it be in the US, Australia, Japan or any of the Eurozone nations, is and MMT-type construct.

    So it is not about moving to some new Shangri-La, which we might call the MMT world – we are already in, the world that is.

    What MMT provides is a new lens to view the world we live in and the monetary system operations that are important in our daily lives.

    This new lens opens up new insights into what is going on in the economy on a daily basis. It’s not something to move to, it already is.

    MMT, as a new powerful lens, makes things that are obscured by neo-liberal narratives more transparent.”

    “Friday Lay Day – ruminations on MMT and the Job Guarantee”

  169. Zolbex

    Excellent link John B, I started fishing for it too before I got to your last comment.

    So here we all are trying to prove and dismiss certain points and we get hung up on specific terms, like “taxes destroy money”, even though we (mostly)agree on the principle that taxation does not fund (or limit in a direct way) government spending, for instance.

    Bill Mitchell is right to also focus on the framing of the debate. It is really difficult (and frustrating) to explain complex concepts with already embedded terminology, hybrid terminology or newly created terminology. John Armour may remember that I once lamented that I don’t even like the term Modern Monetary Theory because it can suggest that it is an untested theory waiting to be utilised (and be shown as a failure or success), which is not true. The neo-classical megaphone is full of rubbish terms, like “budget black hole” or “intergenerational theft” (although the latter can be classified as a misrepresentation of an otherwise valid occurrence). These rubbish terms only make sense in the context of neoliberal (though not exclusively) framework. Similarly, some ideas, explanations only make sense in an MMT (though not exclusively) framework.

    And we didn’t even talk about the biggest lie which is the framing of national debt. National debt, if we phrase it as such, just further muddies the water. Steven Hail suggests that we should use the term “government money” instead of national debt, which would be just as misleading though a lot closer to the truth. For instance, if we replace the word “debt” with the word ‘liability” we get a lot closer to the true implication (meaning), given the fact that a monetary sovereign is responsible, liable for all the currency it issues, that is in circulation, regardless of the money’s shape or form. The minuscule amount of Australian Dollars in my bank account, for instance, is part of the government’s liability (debt). So if I would accept Steve Hail’s term “government money” it would lead to obvious confusion: how can my money be government money, why can’t it be the other way around?

    We mostly agree that bond sales have little to do with deficit spending, yet it creates that illusion. The government’s (and the opposition’s) argument for “budget savings” and “how are you going to pay for it, costing policy announcements”, which are destroying our society as we know it, are mainly hinging an the misunderstanding, misrepresentation these two concepts which have CHANGED their meaning with the abolition of the Gold Standard.

  170. Zolbex

    Further to John Armour’s comment (1.16) MMT is not a new way of operating a broken economy but to liberate us from SELF IMPOSED policy restrictions.

  171. John Armour

    “They say it is the way things operate now but I disagree with that because if it was, then we wouldn’t be issuing bonds.”

    Bonds are issued by the central bank to manage the cash rate, exactly as MMT and the RBA describes it.

    The truth of the statement “MMT describes the monetary system we actually have” does not turn on whether bonds are issued or not.

    The relevant point is that MMT and the RBA’s depictions of bond issuance both contradict the widely promoted fallacy that bonds fund government spending.

    So in this respect, MMT accurately describes “the system we actually have”.

    This is a different thing entirely from MMT adherents saying bond issuance could be dispensed with (and replaced by the central bank paying the cash rate on reserves).

    Bond issuance or interest on reserves, it makes no difference to the core insight of MMT which is that a government that issues its own currency is not financially constrained.

  172. Matters Not

    I watched the video “Framing Modern Monetary Theory” and while I found it ‘useful’, I also found it somewhat ‘painful’. Mitchell takes far too long to make simple points. In that video his OHTs, for example, fail a Year 7’s efforts. And so on.

    I note that he’s working with ‘linguists’ and others to improve his communication, words chosen and meanings given. I suggest he continues with those efforts.

    At one point, Mitchell says we shouldn’t begin (start) an argument with ‘facts’. A big mistake. Most, if not all people, argue on the basis of ‘facts’. ‘Facts’ for the vast majority of people are the basis of logical argument. (I believe I understand what he is trying to convey but he doesn’t do it very well.) It’s not the ‘facts’ that are problematic but the meaning given to same.

    Same applies to concepts such as ‘deficits’. You are not going to stop people using the ‘word’ but maybe you can change the ‘meaning’ you give to the ‘word/concept’. History is littered with examples of ‘concepts’ that once evoked meaning X and now evoke meaning Y.

    That’s what he’s saying, in part, I believe.

    His notion that systems (including economic ones) are constructs is quite useful and that we should begin with ‘what we want’ and then make arrangements ‘fit’ is also ‘useful’.

  173. Kaye Lee

    “Bonds are issued by the central bank to manage the cash rate”

    I call crap on that. Bonds may be TRADED by the RBA to do that but they are issued by Treasury and according to Treasury they issue them when they need money to pay for something.

  174. Matters Not

    according to Treasury they issue them when they need money to pay for something.

    While I don’t pretend to understand MMT in any depth, is it possible that your citation is bound up in the logic of the present system? (and in so doing bring about conformity to it). And is evidence that Treasury is also proceeding on the basis of that same logic? When in fact they don’t need to proceed down that track at all?

    If ‘fiat’ currency is ‘liberating’ then why not ‘create’ the money to ‘pay’ and then be liberated?

  175. Kaye Lee

    Matters Not,

    That is exactly what I think. I don’t believe they NEED to issue bonds but they continue to use that tool. What happens to the bonds after that is something entirely different that could be achieved through different means as could the financing of our expenditure.

  176. Matters Not

    don’t believe they NEED to issue bonds but they continue to use that tool

    Going down the ‘same path’ is always a problem as is probably ‘continuing to use that tool’. But it’s just ‘common sense’ isn’t it? Perhaps it’s in the same vein as we (some) here in Queensland ‘pray’ for rain and when it happens in abundance we ‘pray’ for it to stop.

    That the rains do ‘start’ and then ‘stop’ is taken as ‘evidence’ of an external power. The one we pray to. (LOL)

    I think that Mitchell et al are saying, we (including economists) are the creators of a particular and peculiar ‘reality’ when it comes to defining same. And we have the power to change that same (as defined). But what it requires is a different ‘common sense’. A changing of the meaning we give to concepts such as ‘deficit’, ‘surplus’ and the like.

    Much to offer I think. But will always be (politically) dependent on how they create a new ‘common sense’. Or perhaps not

  177. Kaye Lee

    I think what they say is right (in the main). I think the way they say it is crap. I may be biased but I think economists and politicians need to employ teachers to get their point across. Get rid of marketing people – they don’t understand anything except how to sell a turd.

  178. Matters Not

    think what they say is right (in the main).

    Your view of what is ‘right’ and (implied) ‘wrong’? Not that I have a problem with what I take to be your main point

    the way they say it is crap

    Indeed, while they advance the argument that we need a new ‘common sense’ re understanding as to how the ‘economy’ works, the ‘way’ they say it needs much refinement.

    As for:

    employ teachers to get their point across

    Perhaps? But having being on both sides of the lectern, as it were. I find that teachers (because of their ‘education’) tend to advance the notion that there is ‘truth’ out there so listen up.

    Kuhn et al changed the way we think about ‘science’. New ‘paradigm’ and all that.

    Seems to me that Mitchell et al are attempting to do the same.

  179. John Armour

    Kaye Lee: “I call crap on that. Bonds may be TRADED by the RBA to do that but they are issued by Treasury and according to Treasury they issue them when they need money to pay for something.”

    You’re entitled to your opinion Kaye Lee, but this is how Guy Debelle, RBA’s Assistant Governor (Financial Markets) describes it, and exactly as MMT describes it.

    “The operational target for monetary policy in Australia is the overnight interest rate on unsecured loans between banks, known as the cash rate. The target for the cash rate is established at the monthly meetings of the Reserve Bank Board, currently it is 6.75 per cent. To keep the cash rate as close to this target as possible, the Domestic Markets Department of the Reserve Bank conducts operations in the cash market every day.”

    “In providing or withdrawing funds from the system, the Reserve Bank has a number of options. Firstly, it can buy or sell securities outright, which is the textbook description of open market operations. If the RBA buys a government security from a bank, the RBA credits the bank’s ES account with the funds. The bank’s ES balances rise as the RBA injects the cash. If the RBA sells a government security, the money is paid from the counterparty bank’s ES account.”

  180. Andrew Church

    This is great learning, but not helpful for framing the right message.

    Remember, MMT does not support left over right, or vis versa. There ARE real and absolute constraints on government spending with respect to ‘good’ outcomes, we still have to argue the case for the competing progressive reforms we support, and we can not advocate for all of them. MMT forces transparency from both sides.

    I have online study deadlines now, lets flesh this out later, because John Kelly’s 7 busted myths as presented is good way to rally the troops, but if the Libs could tie Labor or Greens to faith in K’s 7 claims that everyone on the right, and Hawk and Keating and “new Labor” as it was in the UK, AND the vat magority of the Austrailia electorate (left or right) are idiots or liars then the LNP could be in for ANOTHER long run

    If you try and argue MMT, you’ll do worse than John Hewson did trying to explain the GST on a birthday cake.

    Check out Bill Mitchell on the language for reframing the debt in the UK, and keep in mind Australian progressives don’t have the level of crisis (yet) of the UK, meaning nothing like the percentage of people that are desperate enough to try something new. Even those hit hardest by the GFC decided “better the devil (bullshit) you know…” when the option of ‘radical’ reform was presented. So there is a real problem.

    K’s 7 claims would be the perfect gift to the Liberal party, you guys (multi-gender*) need to put on political hats, and explore the right rhetoric, as in Aristotleian rhetoric, that will convince the AUSTRAILIA voters of which ever progressive reforms we think should be taken to the next election.

    I see the big problem, how do we claim all reforms will be fiscaly responsible, ie will not try and spend beyond Australia’s capacity to deliver, yet deny any ambition to balance the budget – WITHOUT trying to explain MMT, which will give the LNP all the ammo to stay in power for a decade.

    MMT can give Bill Shorten extra resolve, to know the Libs policies are the worst possible for Australia. Argue the case for good social reform, argue the case that in a fragile global economy – it is fiscaly IRRISPONSIBLE to move the budget even in the direction of surplus.

    Labor can’t go near MMT if they want the next election. Should they forgo that and start now for 2019, or maybe the Greens could start softening up the ground for MMT.

    Later folks

    * I believe gender is a spectrum in humans as it is through the entire plant and animal kingdoms.
    i.e. guys is wrong, girls is wrong, guys and girls is wrong, guys or girls is wrong. All equally wrong, therefore all equally correct. That’s my argument for using guys, incase anyone had probs with that. Not an argument for anyone wearing a political hat, something I could never do.

  181. Kaye Lee

    John Armour,

    Your post validates my point. The RBA does not issue bonds. It trades in them. The AOFM/Treasurer decides to issue bonds and at this point in time they say they do so to cover spending (and I agree they do not need to do so and are wrong in this thinking).

    Also from the RBA….

    The Australian Government issues CGS in accordance with the Commonwealth Inscribed Stock Act 1911. Under the Act, the Treasurer borrows money on behalf of the Commonwealth by issuing Treasury bonds, Treasury indexed bonds and Treasury notes.

    The move away from the ‘tap’ system of issuance toward auction-style issuance for short-term securities in 1979 and for longer-term securities in1982 represented key financial reforms that imposed a more disciplined approach on debt management and helped to separate it from the implementation of monetary policy. Prior to 2006, the Reserve Bank conducted tenders on behalf of the government (and retains the capability to do so as a contingency). From October 2006, the AOFM assumed direct responsibility for issuance.

    The AOFM develops an issuance program each financial year based on the Australian Government’s expected financing requirements as set out in the Budget and as updated in the Mid‑Year Economic and Fiscal Outlook. In developing this program, the AOFM considers a range of market factors in determining the types of securities to be issued and their characteristics (such as their term to maturity). It does so with the objective of meeting the financing requirement, while having regard for the ongoing cost and risk of the debt portfolio and broader development of the Australian debt market.

  182. Kaye Lee

    Matters Not,

    There are good teachers and bad teachers (far too many of the latter in my experience but what can we expect with the entry requirements and pay).

    Being a maths teacher I dealt more in facts than most but technology liberated us to explore how those facts could be used. We no longer had to waste time doing long divisions or using log and trig tables.

    The best teachers are those who instil a love of learning, who encourage their students to be critical, to ask questions, who give their students research skills and the ability to judge the credibility of sources. Unless we encourage creativity we will never discover new stuff. Students should not be bound by their teacher’s knowledge.

    My somewhat flippant line about using teachers to communicate was because I believe that good teachers are able to express things in ways their students understand. I hate our reliance on spin merchants. We need policies explained, not sold.

  183. diannaart

    To whomever stated Mitchell just does cr^p on – a lot.

    I had started a deconstruction of Bill’s writing on environment + MMT.

    I got about halfway through, developed a headache (found out today the reason for so much pain was my patch had come off) anyway, still not up to finishing, by the time I do the timing will probably be all wrong.


    Just to comment; Bill Mitchell is by no means above criticism but I do believe he would be open to a thoughtful discussion – which isn’t too bad, considering how precious everyone gets with their fave religion/economic theory/ideology.

    I agree with much of author Naomi Klein’s latest book ” This Changes Everything ” – I haven’t read the book in full, maybe she would include MMT as part of the change, but what I do know so far, is our current westernised/subdemocratic/neocon/capitalistic way of doing things will not work for much longer.

    I don’t believe, thus far, that MMT is an inclusive enough theory. What is has in common with other econo-theories, is it uses itself ‘economics’ as the foundation for itself – Bill said something to this effect, but I cannot find it now.

    The environment/planet needs to the foundation closely followed by the well-being of all life – then we can start to add value.

    How we can do this – I do not know – but if we can comprehend such a thing it is possible.

    However, that said, will we ever create a truly sustainable system of living on this planet? Not in my lifetime.

  184. John Armour

    We are arguing about different things Kaye Lee.

    To you, the important thing seems to be who issues and who trades (bonds).

    I regard the AOFM as part of Treasury which along with the RBA is part of consolidated government, so the distinction is one I’m not particularly concerned about or interested in.

    To me it’s just another layer of the institutional smokescreen.

    But having said that, you are quite correct: Treasury issues the bonds, and it’s the RBA that trades them.

    For me however the only issue of importance is the reason bond issuance, and on that point I’m not sure where you stand.

    In 2 successive posts you have said contradictory things:

    “Bonds may be TRADED by the RBA to do that but they are issued by Treasury and according to Treasury they issue them when they need money to pay for something.”

    “The AOFM/Treasurer decides to issue bonds and at this point in time they say they do so to cover spending (and I agree they do not need to do so and are wrong in this thinking).”

    If the latter is your actual position, then we are in agreement.

    It’s a shame you hadn’t left it there because the quote from the RBA source describing the role of the AOFM just rehearses all the usual neo-liberal claptrap, and is quite unhelpful.

    To wit:

    “a more disciplined approach on debt management” and

    “It does so with the objective of meeting the financing requirement, while having regard for the ongoing cost and risk of the debt portfolio and broader development of the Australian debt market.”

    The use of the term “more disciplined approach” is just code for fiscal constraint (appropriate for a pegged currency perhaps) while “debt management” could mean anything, none of it useful.

    There is no “financing requirement” (for a fiat currency regime) and as for the “ongoing cost and risk of the debt portfolio” that also could mean anything, but the neoliberal bias is fairly obvious.

    And there was no mention of interest rate maintenance, the “elephant in the room”.

    Kaye Lee, if you and I can agree that Treasury issues the bonds, that the RBA trades them, that there is no financing requirement, that the purpose of bond issuance is interest rate maintenance, I’ll pop a complimentary year’s subscription to BillyBlog in the post.

    Finally, you might be interested in this article by Bill Mitchell on the politics behind the AOFM.

    Will we really pay higher interest rates?

  185. Kaye Lee

    “In 2 successive posts you have said contradictory things:”

    No I haven’t. I have quoted what the RBA and the AOFM say. I agree with the first three propositions you pose. I do not agree with “the purpose of bond issuance is interest rate maintenance”. The purpose of bond TRADING is interest rate maintenance but that is not why they are issued in the first place according to the people who issue them.

  186. John Armour

    “I do not agree with “the purpose of bond issuance is interest rate maintenance”. The purpose of bond TRADING is interest rate maintenance but that is not why they are issued in the first place according to the people who issue them.”

    I’m not going to quibble over the difference between trading and issuance Kaye Lee, but do you realise that until the creation of the AOFM the RBA handled all the debt management and issuance for the government?

    That says to me that operationally the new arrangements just blur the underlying real purpose.

    “…but that is not why they are issued in the first place according to the people who issue them.”

    I wouldn’t expect them to say otherwise, but what do you think?

    Do you think it’s to finance net spending, as they say?

  187. Kaye Lee

    Sigh. For the umpteenth time, my opinion is that bonds are entirely unnecessary. It is also my opinion that the government does not yet accept this, or at least does not act on the knowledge, or they would stop issuing bonds.

  188. bossa

    The biggest thing in all of this is TAX. The politics of it is what vindicates, at least in the mind of the taxpayer, the cuts to government social programs.

    Everyone needs to understand FIAT currency and that the myths perpetuated by the elite are the tools they use to rob us of our lives and liberty.

    I can’t see the Labor Party owning this argument, as they just aren’t brave enough, and the Greens appear to be trying to become more “electable” as well… what do we do?

  189. Jennifer Meyer-Smith

    The Greens need to be encouraged by the wider Left, Left-Centre and Centre community to engage in this alternative economic reality of FIAT currency so that the elites DON’T continue to use tools to fool the general population out of a decent quality of life and expectations for the future of the planet.

    That means all the clever economic thinkers on this site making connections with the Greens, who are the only obvious alternative (in the short term) to the LIB/LAB duopoly flipflops.

  190. Miriam Possitani

    what happened to your Alliance ?

  191. John Armour

    Spare me the exasperated sighs Kaye Lee.

    I wasn’t asking you if you bonds were necessary or not. We understand that central banks could do away with bond issuance if they paid interest on reserves equal to the cash rate.

    Under present arrangements however, bond issuance is absolutely necessary to maintain the interest rate. Both MMT and the RBA make this quite clear.

    Your statement that “the purpose of bond TRADING is interest rate maintenance but that is not why they are issued in the first place according to the people who issue them” seems to be having an each way bet.

    Rather than the “umpteenth time”, going by all your previous remarks (I’m referring to the last time this was discussed in May last year) it is not all clear that you reject Treasury’s claim that bond issuance (currently) funds net spending.

    Frankly, I’m not concerned whether you understand this or not, but others here are struggling to get their heads around this stuff and contributions from you like the above just muddy the waters.

  192. Kaye Lee

    I apologise for the sigh. It was uncalled for particularly considering how patient you have been in answering my queries. I assure you I am not trying to muddy the waters or have an each way bet. I am describing what I believe happens now as opposed to what we could and should be doing. The AOFM clearly states that it determines bond issuance based on projected government expenditure announced in the budget. They say they have deliberately separated debt management from monetary policy. From my limited understanding, the purpose of the overnight cash rate and trading of bonds by the RBA is to control the supply of money to commercial banks. Why are bonds essential to achieving that goal? Seems to me the same result could be achieved without them.

  193. Jennifer Meyer-Smith

    Keep asking the questions, Kaye Lee. Your intelligent questions and the helpful answers are helping to enlighten us too.

  194. John Armour

    Thanks for that clarification Kaye Lee, and apologies for the tardy response but I’ve been travelling the last 2 days…

    So let’s start again. Let me say at the outset that the issue of bond issuance might be the most difficult of MMT’s insights to get one’s head around, not because the details themselves are complex, but because the institutional arrangements that obscure what’s really happening make it seem so.

    “The AOFM clearly states that it determines bond issuance based on projected government expenditure announced in the budget”.

    At a very superficial level, that is true; if projected government expenditure will involve deficits, bonds must be issued, but not for the reasons the AOFM would have us believe.

    If there was no issue of bonds, the central bank would have no tools with which to manage the interbank lending rate, beyond paying interest on reserves or letting the cash rate fall to zero.

    However, that simple statement by the AOFM (without reference to interest rate management) will be interpreted by the general public as meaning that bond issuance funds net spending, so I can understand why you may still hold that belief, or at the least believe it has some merit.

    But we know as a fundamental truth, an axiom if you like, that all money in fiat monetary systems is created ex nihilo..

    So why would a government that issues the currency have a need to borrow it back?

    Clearly there’s more to the story than the AOFM lets on.

    “From my limited understanding, the purpose of the overnight cash rate and trading of bonds by the RBA is to control the supply of money to commercial banks.”

    I’d put it like this: when the government deficit spends, the beneficiaries of all those government cheques bank their winnings with their commercial bank, which then banks them with the RBA, where they become “reserves”.

    Because it’s a deficit situation, the flow of tax payments out of the central bank’s aggregated reserve accounts will be less than the government cheques coming in.

    I think you know the rest of the story…the commercial banks then try to offload their excess reserves to other banks in the inter-bank market in the hope of earning some interest. If there is a surplus of reserves right across the banking sector there will be no bid for any bank’s excess reserves and so the bid rate will fall to zero.

    This is where the central bank intervenes by selling bonds out of its portfolio to the commercial banks, mopping up the excess cash in the commercial banks’ reserve accounts and restoring stability to the interest rate.

    This process is incorrectly described in the text books as the central bank controlling the money supply when all it’s capable of doing is controlling the price of reserves, should the commercial banks require them.

    The money supply is determined by the commercial banks and the level of activity within the economy, in contradiction of monetarist theory.

    I found the following articles by Bill Mitchell really helpful. He goes into the politics behind the creation of the AOFM, which is quite fascinating.

    “Time to outlaw the credit rating agencies”

    “Will we really pay higher interest rates”

    Finally, I think at some point you just have to accept that most of what Treasury (or the AOFM) says is bullshit. You’ve only got to look back over some of the utterances of Martin Parkinson or John Fraser on deficits etc to realise that they are just tools serving the conservative cause.

    Here’s an example of Fraser’s thinking:

    “The reality is that Australia has spent its way to a structural budget problem. Government payments are growing faster than government revenues and without action, this trend will continue.”

    “The result would be increasing exposure to external shocks, an erosion of intergenerational equity and a rising premium on our borrowings that would reduce our long run growth potential.”

    Even the newest recruit to MMT would be able to pull these ridiculous assertions to bits.

  195. Kaye Lee

    No problem John. This conversation has been going on for years now.

    It seems to me there are a kazillion unnecessary steps in there. What is the problem with, as you mentioned, paying interest on reserves and manipulating what I call the money supply and you call the interbank lending rate that way? We also have liquidity regulations.

  196. John Armour

    If by “paying interest on reserves” you also mean we cease the issuance of bonds, then we immediately upset a whole lot of interests.

    Remember when Costello was racking up deficits early in the Howard government and it was looking like the bond gravy train might dry up? An inquiry was quickly cobbled together to find “good reasons” to continue the practice even when there was no need to.

    It’s a political problem, how to satisfy interests, not an economics one.

    In a way, that let the cat out of the bag for it was then pretty obvious to anybody watching that bond issuance was just another form of corporate welfare.

    Until the RBA decides to pay interest on reserves at or slightly above the policy rate we are stuck with the necessity of issuing bonds.

    I’m having trouble with your use of the term “money supply” as I’m not quite sure what you mean.

    I think you may be using the term in the conventional context where it was thought the interest rate influenced the money supply (by making reserves cheaper/dearer) but this is incorrect, despite it being a widely held belief, for the simple reason banks don’t lend reserves.

    Nor do they leverage reserves using the so-called “Money Multiplier” as described in text books.

    Have a look at this article by Bill Mitchell, but more for the conversation taking place in the comments section where one of Bill’s regular readers, “Lefty”, asks about the same issues.

    “Time for a reality check on debt”

  197. John Armour

    “Remember when Costello was racking up deficits…”

    How could I make that mistake.

    They were of course surpluses!

  198. Kaye Lee

    I understand that you would prefer to think of “money supply” as financial assets being created or destroyed. I don’t think that is crucial to our conversation. The overnight interest rate is affected by liquidity which is why I mentioned it.

    So are we agreed that the AOFM chooses to issue bonds to cover government deficit spending which the RBA then use as their tool to change the composition of assets held by the government and non-government sectors?

    Are we agreed that the issue of bonds is completely unnecessary to achieve this goal?

    We could achieve this transfer of assets (or whatever we choose to call it) by other means like paying interest on reserves.

    From your link….

    “I would say that the RBA is correct that budget deficits are funded by Government borrowing, in the sense that current practice is to use that mechanism rather than having the Government simply credit reserve accounts.”

  199. achu4112

    Anyone interested in brainstorming specific polices progressives should be rooting for, starting with the assumption MMT is correct?

    To me the most oblivious is the discussion of the GST, in fact all taxes.
    With increasing wage and (even worse) asset inequality, as government puts money into or “creates wealth in” the economy, increasing percentages go the elite wealthy, distorting capital markets.

    So now assume the government doesn’t collect taxes for spending.
    1. Prioritise wealfare increases to those who don’t pay income or assest taxes
    2. Rearrange income, asset and consumption taxes for the most fiscally responsible way to maximize economic prosperity for the greatest number of Australians without any living in ‘unnecessary hardship’. *

    * oops, I defy anyone to define necessary hardship

    Whilst the “balance the budget” troop is false and misleading, is everyone in the forum aware of the “fiscal responsibility” that takes its place. If our responses to 1 and 2 above lead to increased consumption and economic growth, we need to remove an extra amount through taxes, in accordance with the Govt’s economic goals – in accordance with MMT.

    In the old paradim, the above looks a lot like “increase taxes on the rich to pay for the poor”

    Rember there is another constraint, global trade, if we force a more equitable society in Australia, and our big companies don’t make the uber profits of USA companies in their environment of falling single male wages for the last 40 years, such Australian companies could be taken over.


    achu4112 and Andrew Church is same person

  200. Jennifer Meyer-Smith

    Yes Andrew Church, or achu4112,

    I would be interested in contributing to the discussion and learning from what others say.

    I think it is definitely important to develop an equitable and effective MMT policy for progressives to advocate in the forthcoming Fed election.

  201. Kaye Lee

    Policy development should focus on desired outcomes rather than cost. That is the lesson from MMT. We should prioritise our needs rather than thinking about what we can afford.

    I would lift welfare payments by $50 a week and build affordable housing.

    Engage in nation building infrastructure like a proper NBN and high speed rail. The Coalition sold us a dud because they didn’t want to dig up every street in Australia but think of the employment it would create.

    I would invest in renewable energy and water protection.

    I would leave the age pension age at 65 because that age group are increasingly occupied in carers’ roles be it for elderly parents, disabled spouses or grandchildren. They also do a lot of the volunteer work in our community.

    I would liase with business to identify skills shortages and increase vocational education to fill the gap rather than bringing in 457 visa workers. Likewise tertiary education – offer scholarships to locals in areas where there is a need rather than to foreign students.

    I would invest heavily in preventative health measures, many of which are under attack right now. Primary healthcare is much cheaper than hospital.

    I would gather together representatives elected by the Aboriginal community – as many as they needed to send to represent their different views – and work on implementing and supporting self-determination.

    I would stop wasting hundreds of billions on strike force defence materiel and spend the money on disaster response, search and rescue, humanitarian aid, rebuilding, peace keeping and foreign aid to countries of first asylum.

    I would invest in research and not limit that to research that promises a financial return.

    Where is Gough Whitlam when you need him (or Julia Gillard if she had been allowed to get on with things.)

  202. Kaye Lee

    This will be funded by PQE – people’s quantitative easing. The government does not need to issue bonds to cover their deficit spending. They simply pay contractors/suppliers/wages/bills/welfare by crediting an account at a commercial bank. The deficit will be accounted for in the budget by an entry called capital introduced which is equivalent to the difference between revenue and spending.

    Let the investors who are looking for safe investments look somewhere other than an artificial bond market.

  203. achu4112

    Excellent, this is my point.

    Are you aware that everything has a cost, as percentage of our capacity. For MMT it is absolute unlike the fallacious and arbitrary balanced budget, this is Bill Mitchell stuff, so we must prioritise. These will be arguments within progressive ranks.

    If we put out the idea: that there is no constraint and hence not responsibility required on govt spending in Australian dollars, we can kiss goodbye to the next few elections.

    Gough today could have spent 4 billion Australian sure, but in the high interest rates of back then, MMT would demand, by fiscal responsibility, substantial tax increases to avoid hurting most Australians, removing much or even more of the money they put in. But we would have great new wealth in infrastructure to benefit all the population.

    Again, this equal to the old trope: increased spending needing increased taxes, this CAN be true even with MMT, and is always true WHEN there is full employment (ie maximal national productive capacity)

    Fiscal responsibility of politicians does not diminish with MMT, the opposite is true, as they will have an unavoidable bias for spending in a way that will maximize their vote. The blessing and the curse of democracy.

    Bad and wasteful spending must have a criteria under MMT, we need to work out what that is, and use it to add the high moral fiscal ground, to the high moral ground we already have.

    EVERYONE here gets it: that MMT calls the ultra right on their bullshit “we want those things too but we have to balance the budget for the greater morality of not passing debt to future generations” (yet they don’t care about future climate)

    Just shouting LAIR, WRONG, ASSHOLES!… won’t ever win over the voters, until a few weeks ago I believed that bullshit (balanced budgets) OK I maybe an asshole, but for very different reasons than my political views ?

    So if my arguement suggests we need to create awareness of a new higher moral fiscal ground and then OWN IT, that will never happen before the next election and you should ignore me (I’m used to it)

    Above is for big picture/long term.

    For next election? All the dialog with the electorate will be in the language of neo-con, using mostly neo-con artifacts and metaphors. This is not impossible given the sloth of the global economy, to argue MMT supported progressive policies in a neo-con environment without referring to MMT.

    Bill Shorten might be able to do it, fight the charismatic politician with the charisma of great ideas. Could that make Bill the next John Howard?

    Maybe the Greens could soften up the ground for MMT, but Labor? Unlike Labor in the UK, here there’s good argument to keep MMT in the “loopy left” basket til after the election.

    Here’s my worse case scenario, the right get to beat us over the head with “MMT spend spend spend, mad mad mad” then embrace MMT themselves for corporate agenda, abolish wealth and company taxes in place of GST increases and minimal “social safety net” nice of them. By the next 50 years the industrial revolution will have come full circle, and the dictionary will redefine the word slavery to include the average citizen.

    Or have I strayed too far from the pack?

  204. achu4112

    Kaye Lee,

    yes, if only Julia had been able to get on with things. Dumping her was greater insanity than dumping Kevin in the first place.

    Investment, here again the priority is redistributing existing wealth not JUST govt creating new wealth (which it should do only when fiscally responsible to do so).

    We need private sector to invest more of their profits that currently go to shareholders (in a Paul Keating world first initiative) to be reinvested in research n development.

    Govt research funding is argued to be most useful its country when in areas with no obvious financial benefit, hence not competing with private RnD. EG CSIRO exploring cosmology (black holes I think?) came up with WI FI and win patent battles around the world.

    Remember, a government can only spend on things that can be bought, things that no one else is buying, or on productive capacity not currently producing anything. If everything has a buyer, and production is at capacity, govt spending will NOT increase wealth of its citezens (it can only redistribute it if at the same time they increase taxes). Deficits at such a time means a greater amount of money to pay for unchanged amount of good and service to purchase ie inflation.

    MMT means both left and right need to be transparent in their goals and objectives.

    Andrew Church

  205. achu4112

    WTF? everyone gone silent , what did I say?

    Kaye, I agree with your aspirations, but when you say I’d do this, I’d do that – are you claiming the govt should be doing those thing’s?

    We don’t need tha govt to FUND renewables, we need them to stop supporting coal. I don’t know WHAT we do about crazy polices that saw demand for electricity go down, yet govt guarantees to private sector on privatising poles and wires, has seen unjustified private investment in the grid that can never possibly make a profit, and PRICES SOAR! Even if we go off the grid we’ll pay a levy for grid, same as everyone pays for roads and water ven if you don’t use road and your not on mains.

    Governments can’t remidy bad policy by printing money.

    Kaye, what you advocate is spending without understanding the cost, is as wreck less as any right wing extreme agenda and hurts us all in the long run.

    I entreat EVERYONE watch hours of Bill Mitchell, his allies and all opponents. Do research, make notes, work I out AND understand human hubris of orchestrating specific outcomes from complex systems.

    THEN hit us with a wish list PLUS a realistic road map that might just get a quarter of what you want. That would be a great day were it to come true, for who ever is PM at the time.

  206. Jennifer Meyer-Smith

    All of us interacting with you are open-minded, achu4112,

    so I hope you’re listening right now too!

    MMT is not the bearer of ALL great wisdoms. Even I, in my limited capacity, see a gap with your alternative to unpaid work for the dole.

    MMT espouses putting a monetary value to all essential tasks eg painting park benches. Perfectly acceptable, but I want to see MMT recognise and advocate elevatory opportunities for the educated, experienced, skilled, expertised unemployed and under-employed who want meaningful paid work that makes their hearts sing.

    A basic income is essential but not heart-warming for many of us who have toiled in under-paid highly qualified work for decades.

    Lift your sights for the graduates and on-coming talented generations, and those of us mature-age workers who want or need to keep working for a decade or more.

  207. kathysutherland2013

    The question I keep coming back to, as I try desperately to follow these esoteric arguments is, is it possible to educate the Australian general public on these issues?
    Last night, the national TV news on one of the local stations here in Hobart led off, in its headline story, with words to the effect that the Australian taxpayer will be paying a lot more in the welfare budget in 2017. Can’t remember which network or the exact comment, but the point I’m trying to make is that while everyone here is arguing theories and minutiae, the general public is being fed, and accepting, the sort of comments I just alluded to.
    So what’s the answer?

  208. achu4112

    my “unpaid work for the dole” ? I am 57 yrs old on the dole or Ozstudy for uni depending on when I’m part or full time student while helping my parents die. One down, one to go.

    With some ergency, my wish list would be for every nation state in the world to have a Greens led government right NOW, and somehow discover an social system in which individuals can flourish without requiring the economy, production, consumption and population to grow.

    This must happen for long term human survival, or even come close to survive g as long as the dinosaurs, I wish we could survive much longer than that.

    But RIGHT NOW, no matter how big our dreams, we have to deal with the reality of making a difference before the next election, regardless of who wins it.

    What should be our realistic strategy for the here and now heading to the election.

    1. Do we come up with polices to get Labor elected now? OR
    2. Do we want Labor taking policy positions that will loose now, but but change the political debate for the better – to benefit who ever takes power?

    Or how else should we approach immediate options?

  209. Jennifer Meyer-Smith

    Why concentrate solely on Labor? Encourage the political manipulators, backroom boys and Shorten image gurus to understand that Labor alone is not palatable as the true Opposition any more.

    Unfortunately, they have not earnt their stripes in recent years and they’ve squandered the great legacy handed down to them from ALL of our forebears.

    So, in penance, they are expected to form the effective, working, equitable Alliance with the Greens who fill Labor’s social justice shortfalls and the Progressives, who show energy and new ideas in a diverse spectrum where Labor is scared to plunge. Labor is also expected to accept 2 or 3 sane Independents where policies and political agendas align.

    If Labor fails to see the light and form this important partnership with the Alliance, then Labor dooms us ALL to 3 or more years of solitude under this despicable LNP Government.

  210. nurses1968

    Jennifer Meyer-Smith
    I keep seeing you talk of this “Alliance” but just who are they ?
    Of the minor parties in the HOR, Palmer is likely to lose, McGowan will probably struggle , Greens will probably get Bandt re-elected and Wilkie .
    Is including these your ‘Alliance” ?
    You then say that without this “Alliance “…..” then Labor dooms us ALL to 3 or more years of solitude under this despicable LNP Government.” No.
    If the LNP win, we are doomed to years more of them , so you can’t blame Labor, more the voters who voted against them
    Please clearly explain this imaginary “Alliance” and who it contains

  211. diannaart

    The best strategy that I and many (but not enough) to be applied is to vote for Independents and smaller parties – the only weapon against the dichotomy of the LNP and Labour is diversity – it makes for a difficult time for which ever major party is in power, but is the only way for a glimmer of true representation to be achieved in our political system.

    To Labor – relying on people to select you for being the “least bad” is no longer acceptable.

  212. nurses1968

    And when the LNP are returned, who do you blame then, ?

  213. achu4112


    your observation writ large is the environment those fighting for change must accept. You must advocate your case in the language and by the rules your audience understands. That idea goes back to Aristole, and is called rhetoric.

    Let’s argue in the language they believe to be true. Plenty of neo-con enconomists believe in Keynes, which claims: when economy is running at reduced capacity, increase spending, eg welfare, this will increase demand which increases production toward capacity, more consumption, production and more taxes. The individual tax payer feels no extra burden, in fact they feel wealthier because they are buying more.

    Yes your Hobart report is wrong by MMT, but even the correct MMT does not favour welfare over taxes. IF MMT contstraints allow a govt to increase welfare without hurting the economy, then the govt could choose to cut taxes and not increase welfare, which would be socially catastrophic of course.

    MMT is exactly the right thing to show that the right wing argument for budget crisis needs to cut welfare is total bullshit. BUT

    LOGIC101: to show someone’s argument is wrong, tells you nothing about the truth (of the proposition being argued) it’s just a bad argument.

    We still have to make the case for what we believe to be true.

    We need to do a lot more than show contempt for the “budget crisis” mandate claimed by the Abbott govt.

    We argue in a different landscape now, Turnbull seems to be: a more priming of economic pump “by innovation” than “budget emergency” kinda guy. This enables good opposition to challenge with good ideas, such exchanges Turnbull may even be hoping for, a strong opposition gives him the political cover to club his extreme right wing factions to oblivion.

    However, the recent Morrison budget update felt more like Abbott than Turnbull’s rhetoric.

    We fail if we don’t get that kinda welfare cut crap off the table regardless of which of the major parties is in power. A nurse that used to help care for mum at home, was getting some single mother support. Over night the Guillard govt changed their base rate to the level of the dole. Bad for her, disaster out for others.

    Even conservative budget balance economists can argue such cuts hurt all Australians when the economy is slow, weak or underperforming, whilst a MMT guy COULD argue: cut welfare let people starve but cut taxes for the rich to almost zero until their spending returns the economy to full capacity.

    MMT doesn’t support left or right (Bill Mitchell), we have to make the case for the societal values we want. We must do it in the language that best presents our case in the most compelling way to the audience. Very rarely, almost never in a broad public Australian forum will that involve evoking MMT.

    MMT arguments greatly enhanced the conviction of my OUTRAGE at the stupidity of the Abbott govt view of the world, its citizens and justification of its policies. Outrage can fuel our motivation to put together the best possible campaign, but expressing outrage is mostly counter productive. In a successful campaign, there will a few well targeted moments of outrage, sure.

  214. diannaart

    If the LNP are returned (and with MT at the helm it is quite likely) then a diverse cabinet should make it as difficult for them as it was for Labor when Abbott was LOTO.

    Labor is just the “least bad” and that is not good enough.

  215. nurses1968

    ‘a diverse cabinet should make it as difficult for them “?
    It is still the same old LNP, just different bums on different deckchairs .
    In comparion to the LNP , Labor are “good enough” for me .
    If Labor get beat it won’t be my fault ,

  216. Florence nee Fedup

    I suspect the deck chairs haven’t changed, nor many of the bums. Only change apparent is leader, who appears to have little power.

  217. Jennifer Meyer-Smith


    Labor are not “good enough” for me because of their complacency with regards to vulnerable people on welfare, their inhumanity to asylum seekers and detainees, their me-tooism to legislation pushed by the LNP on data retention laws, to name some glaring examples. Labor has deteriorated into a Lib-lite party.

    However, because I still hold a glimmer of hope that some of them will see the error of their ways, and I am very conscious of the claws that the LNP have in a somewhat apathetic and often ill-informed electorate due to a biased MSM, I see Labor’s only redemption is for them to form working and effective partnerships with the worthier of the political parties and forces.

    That’s why I advocate the Greens, energetic and innovative Progressive parties, sane Independents like Wilkie (definitely NOT Lejonhjelm!) and Labor should form an Alliance. Labor is too weak and passionless to win alone and needs strong allies. That’s the only way we will get rid of the plague inflicted by the LNP.

  218. nurses1968

    Jennifer Meyer-Smith
    Even at your best hope, Greens may get 1, Wilkie stands a chance, McGowan has made some fateful decisions, Katter won’t support Labor and Clive looks like getting done.
    There is no one else in the HOR do do deals with and that rag tag lot ,at best would be 3 voices in 150
    The LNP will get control of the Senate, so if you think it has been bad so far, strap yourself in .
    Just in case you get the expected, that being LNP, just remember I didn’t vote for them, no way, no how.
    However, you missed the question .
    Just who would the “ALLIANCE” contain and what numbers from where, or what Party or Independents ?
    It is a bit vague and the election is dangerously close
    But, I do get your point, you don’t want Labor and you don’t want the LNP.
    You have no one to blame but yourself if LNP get back

  219. Annie B

    diannaart — ( re : January 11, 2016 at 7:49 am )

    I agree – vote independent or smaller parties – – – BUT …..

    For heavens sake ( and especially for our sake ) ….. those who DO vote for smaller parties, MUST make sure where the preferences from those parties are going to. ….

    And they sure go somewhere.

    Last election, all the ‘smaller’ parties snuck out of the woodwork, with pamphlets on voting day which most people probably didn’t read —- and most of those directed their preferences to the LNP.

    Funny that ?

    I would like to see a legal look into the way that was structured. But who has got the gutz to do it.


  220. Kaye Lee

    Everyone has control of their own preferences if they take the time to fill in all the numbers. It has become very important to do so.

  221. Jennifer Meyer-Smith


    The Alliance is what Labor should be aiming for. Although realistically the 2016 election is too close to have a fully formed Alliance working parties partnership established to its optimum, Labor should be seen right now to be forming friendships with the Greens and sane Independents like Wilkie, Muir, and arguably Lambie and Madigan. Labor also needs to be seen to be making in-roads into forming friendships with the upcoming progressive, alternative parties.

    Many people have turned away from the major parties because they represent old-school flipflop politics that lacks vision, compassion and equitable values and imperatives for vulnerable, marginalised or discerning voters. Labor is not as bad as the LNP but the difference is nowhere wide enough.

    If Labor is seen to be making important effort to forming such friendships, Labor may find some disaffected former supporters come back into the fold, as well as expanded community support based on the distaste for having another term of the LNP in government.

    2016 might be too close to get the optimum Alliance formed, but by the 2019 election, it needs to be seen to be forming.

  222. achu4112

    Yes, lib lite, I like that.

    Pretty much what New Labor was in UK, which was a study of the Hawke Keating success, and Bill Clinton, many predicted the Libs had been marginalised as right wing and out of business for a long time.

    One of the interesting observations through the MMT lens, is that whole New Labor movement may have done more to legitimise conservative politics than advance the cause of the ordinary citizen. The justification was, they could help people if they weren’t in power, and they’d never be in power if they couldn’t convince the electorate they were economically responsible. It seemed a great triumph at the time. I certainly believed it.

    Yes, we do need plenty of people voting for the Greens, that does influence both major parties. I loved Bob Brown’s expanded world view, and consideration of long term human survival.

  223. Jennifer Meyer-Smith

    Hear, hear Annie B for considering sane minor parties and Independents and using preferences wisely so they don’t flow to the LNP.

  224. nurses1968

    The trouble with voting for these Independents, is you end up with a raffle , as with Cathy McGowan
    Cathy’s votes mostly back government – PressReader wangaratta-chronicle Dec 21, 2015

    CATHY McGowan (MHR, Indi) says she is proud of her voting record
    And when it came time to protecting Bronyn Bishop.
    Cathy McGowan voted strongly for Speaker of the House

    And as Anne B rightly pointed out, it’s the preferences .
    AEC figures show 10% of all Green preferences go to the LNP .
    thats nearly 100.000 votes
    enough to get a couple of Cory Bernardis elected .
    In optional preference states some 50% of votes got exhausted , {QLD} and it always has been a high figures, wasting votes

    Jennifer Meyer-Smith on your Alliance, you have a grand total of 3 {maybe} how will they influence anything in a field of 150, and you seem to be jumbling HOR with Senate, and it just doesn’t work that way , no matter how wishful you are

  225. Miriam Possitani

    The trouble with Cathy Mcgowan seems to be she tries too hard to be half Liberal , which I guess you would expect in a conservative seat like Indy
    It seems the voters there think why bother with half imitations, just bring back Sophie Mirrabella
    As for that Alliance Nurse, in the words of Bjelke “don’t you worry about that ”
    It seems everyone interested thinks the sugar plum fairy will just make it happen without lifting a finger, or talk it up it may happen , because thats all that happens….talk..with little idea

  226. John Maycock

    Ever heard the old saying , blowing smoke out your rear ? that springs to mind on the great alliance caper

  227. Bacchus

    That’s a very important point that is missed by so many, even so-called enlightened progressives Kaye Lee:

    Everyone has control of their own preferences

    100% true in the lower house – ONLY the voter filling out the ballot paper decides how their preferences flow. In the Senate, if you vote above the line, you are abrogating your right to decide how your preferences flow – don’t whinge if you allow that,

  228. Kaye Lee

    Independents and minor parties can cause problems. NIOA TV presented a list of people to thank for their support of gun ownership suggesting everyone should email them.

    To the MP’s that moved a motion of disallowance for the regulation to prohibit the import of the 7 shot Adler shotgun:

    In the Upper House:
    Senator David Leyonheljm

    Senator Ricky Muir

    In the Lower House:
    Hon Bob Katter MP

    Cathy McGowan AO, MP

    John Madigan, Bob, Day, and David Leyonjhelm were also on that ridiculous senate inquiry “to inquire into and report on the application of regulatory governance and economic impact of wind turbines” resulting in the appointment of a “wind commissioner” who will earn more than $600,000 in the three-year, part-time role.

  229. Jennifer Meyer-Smith

    Miriam Possitani,

    keep your sarcasm to yourself. Just coz you won’t scrutinise what Labor has become, don’t blame others for trying to come up with alternative and progressive solutions to good governance in this country that grows beyond the LIBLAB flipflops.

    Aim for proper proportional government representation by opening up Parliament to legitimate smaller parties that are fully transparent in allegiances and values. That’s why I’m advocating the Alliance now of specifically chosen parties and groups that represent Centre and Left and espouse innovative policies based on social justice, environment and economic reforms for a better Australia. In my eyes, those parties are the Greens, the Australian Progressives, sane Independents and Labor (shifting back to Centre-Left).

    Ditto for you too John Maycock. What suggestions have you got besides reinstating lightweight neo-conservative Labor back in? Open your eyes. Modern Australian Labor are a far cry from the great days of Gough and his comrades.

    Kaye, I’m well aware that one or two of those named have not always painted themselves in glory but on other occasions they do. That is where proportional party negotiation, principles and policy prioritisation will play important roles.

  230. Miriam Possitani

    Jennifer Meyer-Smith
    “don’t blame others for trying to come up with alternative and progressive solutions”
    how ? by just waffling on about some grand plan ?
    What have you done other than express a half baked thought bubble .
    You can carry on with this silly little LIBLAB thing, but
    advocating” does stuff all.
    First get a concept, then a plan …………….
    Have Labor agreed ? Greens ? Lambie? PUP?

  231. Jennifer Meyer-Smith

    So that’s your answer to discussion, MP? Shut it down by belittling the ideas raised. Think laterally if you can and build on the discussion with solutions not naysaying.

    My bottom line is there are two conceivable disasters awaiting the Australian people, if we don’t start accommodating new ideas and “some grand plan”, as you so pleasantly describe it.

    Disaster No.1: the LNP get voted back in because Labor, as the alternative government stays ineffectual for ignoring the hearts and minds of disaffected voters by not endorsing strong grassroots’ values and principles and fails to have the guts to advocate them with good conviction into policy making.

    Disaster No.2: it’s in the aftermath of the worst landslide in Australian political history and the LNP have been annihilated. Yes, that would be wonderful for 5 minutes until the complacent, self-righteous and arrogant Labor victors emerge only to perform as Lib-lites.

    If that were the result, I would ask you, what is the point of voting if no matter what you do, you only end up with FlipFlops?

  232. Miriam Possitani

    Jennifer Meyer-Smith
    You do have a short memory or is that deliberate omission to try to score a political point at the cost of Labor ?
    You seem to forget who saved us from the GFC, gave us Major pension increases, Gonski, NBN Medicare etc .
    You have your illusion alliance or fiddle at the fringes and get the LNP .
    Someone a few months back here on the AIMN posted this list.
    I kept it as a reminder of the “flipflopping”

    • NBN (the real one) – total cost $37.4b (Government contribution: $30.4b);
    • BER 7,920 schools: 10,475 projects. (completed at less than 3% dissatisfaction rate);
    • Gonski education funding reform;
    • NDIS – DisabilityCare;
    • MRRT & aligned PRRT;
    • Won seat at the UN;
    • Signed Kyoto;
    • Signatory to Bali Process & Regional Framework;
    • Eradicated WorkChoices;
    • Established Fair Work Australia;
    • Established Carbon Pricing/ETS (7% reduction in emissions since July last year);
    • Established National Network of Reserves and Parks;
    • Created world’s largest Marine Park Network;
    • Introduced Reef Rescue Program;
    • National Apology;
    • Sorry to the Stolen Generation;
    • Increased Superannuation from 9 to 12%;
    • Changed 85 laws to remove discrimination against same sex couples;
    • Introduced National Plan to reduce violence against women and children;
    • Improvements to Sex Discrimination Act;
    • Introduced plain packaging of cigarettes;
    • Legislated Equal pay (social & community workers up to 45% pay increases);
    • Legislated Australia’s first Paid Parental Leave scheme;
    • Achieved 1:1 ratio of computers for year 9-12 students;
    • Established $10b Clean Energy Bank;
    • Legislated Murray/Darling Basin plan (the first in a hundred years of trying);
    • Increased Education funding by 50%;
    • Established direct electoral enrollment;
    • Created 190,000 more University places;
    • Established My School;
    • Established National Curriculum;
    • Established NAPLAN;
    • Increased Health funding by 50%;
    • Legislated Aged care package;
    • Legislated Mental health package;
    • Created 90 Headspace sites;
    • Created Medicare Locals Program;
    • Created Aussie Jobs package;
    • Created Kick-Start Initiative (apprentices);
    • Fu• Legislated Dental Care package;
    nded New Car Plan (industry support);
    • Created Infrastructure Australia;
    • Established Nation Building Program (350 major projects);
    • Doubled Federal Roads budget ($36b) (7,000kms of roads);
    • Rebuilding 1/3 of interstate rail freight network;
    • Committed more to urban passenger rail than any government since Federation;
    • Developed National Ports Strategy;
    • Developed National Land Freight Strategy;
    • Created the nations first ever Aviation White Paper;
    • Revitalized Australian Shipping;
    • Reduced transport regulators from 23 to 3 (saving $30b over 20years);
    • Introduced NICS – infrastructure schedule;
    • Australia moved from 20th in 2007 to 2nd on OECD infrastructure ranking;
    • International Infrastructure Minister of the Year (2012) awarded to Mr Anthony Albanese;
    • International Treasurer of the Year (2011) awarded to Mr Wayne Swan;
    • Introduced anti-dumping and countervailing system reforms;
    • Legislated Household Assistance Package;
    • Introduced School Kids Bonus;
    • Increased Childcare rebate (to 50%);
    • Allocated $6b to Social Housing (20,000 homes);
    • Provided $5b to Support for Homelessness;
    • Established National Rental Affordability Scheme ($4.5b);
    • Introduced Closing the Gap;
    • Supports Act of Recognition for constitutional change;
    • Provided the highest pension increase in 100 years;
    • Created 900,000 new jobs;
    • Established National Jobs Board;
    • Allocated $9b for skills and training over 5 years;
    • Established Enterprise Connect (small business);
    • Appointed Australia’s first Small Business Commissioner;
    • Introduced immediate write-off of assets costing less than $6,500 for Small Business;
    • Introduced $5,000 immediate write-off for Small Business vehicles over $6,500;
    • Introduced a national levy to assist Queensland with reconstruction;
    • Standardized national definition of flood for Insurance purposes;
    • Created Tourism 2020;
    • Completed Australia’s first feasibility study on high speed rail;
    • Established ESCAS (traceability and accountability in live animal exports);
    • Established Royal Commission into Institutional Sexual Abuse;
    • Established National Crime Prevention Fund;
    • Lowered personal income taxes (average family now pays $3,500 less pa than 2007)
    • Raised the tax-free threshold from $6,000 to $18,200;
    • Raised Australia to the richest per capita nation on earth;
    • First time ever Australia has three triple A credit ratings from all three credit agencies;
    • Low inflation;
    • Lowest interest rates in 60 years (average mortgagee paying $5,000 less p.a. than 2007);
    • Low unemployment;
    • Lowest debt to GDP in OECD;
    • Australian dollar is now fifth most traded in the world and IMF Reserve Currency;
    • One of the world’s best performing economies during and since the GFC;
    • AAA+ Credit Rating;
    • Australia now highest ranked for low Sovereign Risk;
    • Overseen the largest fiscal tightening in nations history (4.4%);
    • 21 years of continuous economic growth (trend running at around 3% pa);
    • 11 years of continuous wages growth exceeding CPI;
    • Increasing Productivity;
    • Increasing Consumer Confidence;
    • Record foreign investment;
    • Historic levels of Chinese/Australian bilateral relations;
    • First female Prime Minister;
    • First female Governor General;
    • First female Attorney General;
    • Introduced Small business $1m loss carryback for tax rebate from previous year;
    • Legislated Australian Consumer law.

    Now , what was that flip flopping ?

  233. Jennifer Meyer-Smith


    no disputing many of these achievements. But list-making is not sufficient if what is listed in some cases, is only a bunch of words.

    Community consultation rather than ticking boxes provided by bureaucrats and think tanks alone, would also go a long way to finding the problems and working out the solutions.

    Also, introducing a new scheme eg National Jobs Board means nothing if it doesn’t provide meaningful, direct pathways for wide demographics to directly access meaningful employment. Greater supervision by direct government, and NOT private job employment contractors, of how such schemes operate in reality is imperative.

    Where are the policies for improving welfare for people languishing in unemployment and under-employment?
    Where is the listing for how Newstart is increased to be at the level of a decent minimum wage?
    Where are policies to move asylum seekers out of the hell-holes on Nauru and Manus?

    These are key areas Labor has shame-facedly let vulnerable and marginalised people down in and thus themselves.

    If Labor wants government, I strongly suggest they address these concerns for starters.

    (I’m signing off within the next 5 minutes, so I will continue this discussion tomorrow, if necessary.)

  234. achu4112

    Sorry Miriam,

    JMS is right, LNP has been a little screwy of late, but it won’t be long before Labor and Libs are fighting over middle ground again.

    That list says a lot about you (commitment, passion, willingness to engage etc) but nothing about the Labor party’s recent performances despite the data so provided.

  235. Florence nee Fedup

    diannaart, I suspect Shorten believes the voter will vote for him because he is offering what is best for Australia.

    Turnbull isn’t Labor lite. Anyone that believes that is a fool.

    That list is more than a list of words. They are what was achieved,

    Labor wasn’t into stunts. Still isn’t.

    Shorten big trouble is that he is a achiever, as doer, but doesn’t seem to need the limelight. This is a disadvantage but shouldn’t be.

    The noisy, squeaky wheel does indeed draw attention but little more. It is the quiet wheel that goes further, gets the job done.

    The choice is Turnbull or Shorten. No other is available.Take your pick.

  236. Annie B

    To Miriam ….

    Would like to suggest that ALL actions, begin with thought – or an idea.

    And that is what Jennifer MS has put forward. Good onya Jennifer.

    I am a Labor supporter, through and through, and believe ( some would call me a dill ) … that they will come up at the 11th hour, with the goods – to attempt to put this country back onto a square and equal footing for all. …. That has been their mantra for decades, ( with a few glitches here and there – which party doesn’t have glitches ??? ), but their policy thinking – albeit rather secretive at this time, would not have changed.

    And why shouldn’t they keep it all under wraps. Gives the LNP something to think about – ‘what are they up to’ ??

    Shorten and his apparent siding with the LNP on many issues, I think is playing the dirty game that politics really is. They are ALL good at that. Just depends ( like the outcome of the Australian Tennis Open !! 😉 ) who wins on the crucial and final day.

    Don’t ever kid yourself that politics is anything but a game – for big players. …. Power, money manipulation, the approaches to the populace ( negative at this point in time ) …. are like chess board pieces being moved around for advantage.

    I would be very surprised if Labor just sinks, fades away ( which would make them a non-event in politics at crucial levels ) and throws in the towel. …. The demise of Labor is not on Labors’ agenda – of that I am sure.

    Does anyone really believe they will throw in the towel and walk away ?…… I think not.

  237. Florence nee Fedup

    Annie, Labor has been written off many times in my lifetime. Still going strong. Stronger than many believe.

  238. Annie B

    Yes Florence – you are right.

    And they haven’t crumbled yet. …. and not likely to.

  239. Florence nee Fedup

    We have heard repeatedly on ABC 24 and other media that Shorten has to face questions on Heydons report, as if he would have problems dealing with it.

    Well today he did. Nothing arose out of him being faced with questions from the media. In fact answered every question put to him with straight, direct and open answers. Yes he also defended the union movements and workers.

    No waffle, no stunts, no walking off, no evasive answers. (Yes in the green grocers, as Abbott did. Difference being, he was talking to, among customers).

    What is occurring now is a battle between Shorten and Turnbull to set the agenda for the election campaign that is coming.

    I feel in my gut, Shorten will win. Why they wipe the man off is beyond me.

    Whether Labor wins the next election is another matter. Governments lose elections in this country. One term governments are rare.

    He will give Turnbull a run for their money. Turnbull knows this.

  240. Annie B

    Well said Florence nee Fedup ….. Agree with you 100%.

  241. diannaart

    How many policies on “Labor’s List of Achievements” have been gutted by the coalition?

    How many of those achievements were only made possible by Independents such as Oakeshott or Windsor or small parties such as the Greens?

    How likely, if Labor return with a majority, will they restore those wrecked plans?

    How many times has Labor voted WITH the coalition on mining approvals?

    How many times have Labor voted WITH the coalition on the detention of refugees?

    How many time must smaller parties be forced into deals with either the LNP or Labor to achieve a sort of least worst situation?

    More diversity; more public representation in parliament.

    I think we can all agree that nothing is perfect.

    If we do get a diverse cabinet there will be the Lambie’s or the Katter’s – such is life.

    We also get the serendipitous surprises such as Muir along with a few well-informed such as Wilkie (and maybe the return of Windsor). A 2 party system stifles such possibilities that a diverse representation offers.

  242. Jennifer Meyer-Smith

    Hear, hear Diannaart. I agree with you 100%.

    FnF and Annie B, I too want to see a return of a great Labor that actually cares for the marginalised and vulnerable in the community while also creating diverse and innovative policies that meet the needs of ALL Australians (and OMG, the environment too!)

    The Labor Governments of the last 3 decades have incrementally whittled away this greater Labor and I want to see strong, permanent steps by the more decent, community-connected, competent and socially-economically responsible amongst Labor to bring the party Left and/or Left-Centre again.

    In this capacity, this greater Labor will be suitable to join the electable, effective, ethical and durable Alliance with the Greens, sane Independents and upcoming Progressive parties that I advocate.

  243. diannaart

    If Labor are to repair the damage over the past many years, they will need the support of Independents and small parties such as the Greens and other progressives.

    Labor cannot return to its heartland on its own (and it doesn’t have to be alone).

    I agree, Jennifer, the rot started with many of the ‘reforms’ started by Hawke/Keating and ramped up by Howard… and the rest…

  244. Jennifer Meyer-Smith

    Yes diannaart, your first and second lines are exactly what I have been advocating.

    I agree with your third line and, it pains me to admit that, I believed in those wolves in sheep’s clothing then too like some other continuing devotees on this site.

    That was when economic rationalism was accepted by Labor in the attempt to ward off relentless and empty accusations by the LNP that Labor was not economically responsible. Well, we now know we don’t like economic rationalism anymore – people – so we find ways to work away from it.

    That’s why I’m open to new ideas like MMT, which is a work in progress and must be open to community consultation for us to mould its very best version to be available as soon as possible and for the long term.

  245. diannaart


    I was still voting Labor during the 1980’s, but I returned to tertiary education during that era and felt, first hand, the introduction of HECS (among other changes), so I really began to pay attention.

    Whatever economic move to the right Labor makes we can be sure that the LNP will take it even further.

    I agree an Alliance of the progressive is needed, achieving such while the political zeitgeist remains a binary one will be difficult, but not impossible. Both the Libs and Labor have painted themselves into right wing corners which have given the impetus to the formation and increasing support of small parties and Independents.

    What the coalition sees as a fractured parliament I see as an opportunity for more reality based representation than we have had the past 30 years.

    While the idea of the MMT is good – we do need to do a major rethink on economics – I remain skeptical, am I the only one who finds Bill Mitchell long-winded?

  246. Jennifer Meyer-Smith

    Hear, hear diannaart, it is definitely “an opportunity for more reality based representation than we have had the past 30 years.”

    I also want to hear much more of what true economic reformists like Steven Hail, Joseph Stiglitz, Angus Deaton and others have to say about an economic system overhaul that turns the ‘drip-down’ fallacy of neo-liberal economic repression on its head immediately, so that we 99% have a chance to breathe and enjoy economic security, as well as the means to develop our great plans and projects too.

  247. John Armour

    “That’s why I’m open to new ideas like MMT, which is a work in progress and must be open to community consultation for us to mould its very best version to be available as soon as possible and for the long term.”

    I’m not sure what you mean by “a work in progress” or “mould its very best version” etc Jennifer.

    MMT just describes the monetary system we actually have, so there can be no “versions”.

    Mainstream economics however describes a “version” of our actual monetary arrangements that is totally disconnected from reality.

    By employing devices like the “household analogy”, mainstream economics has most of us believing “there is no alternative” to austerity. We have been “living beyond our means” and we must “tighten our belts”. Et cetera, ad nauseam!

    MMT pulls the scales from our eyes, letting us see simple solutions to problems that mainstream economics says are not possible.

    “What MMT provides is a new lens to view the world we live in and the monetary system operations that are important in our daily lives.

    This new lens opens up new insights into what is going on in the economy on a daily basis. It’s not something to move to, it already is.

    MMT, as a new powerful lens, makes things that are obscured by neo-liberal narratives more transparent.

    It means that the series of interlinked myths that are advanced by conservative forces to distract us from understanding causality and consequence in policy-making and non-government sector decision-making are exposed.”

    “MMT is not a regime we can move to!”

  248. cornlegend

    Labor will never do a deal with the Greens ,
    The Greens are an opposing political party out for the hearts and minds of the voters, just like Labor .
    The Greens have thrown buckets of money at trying to defeat both Albanese and Plibersek {and it’s got nasty at times}

  249. Jennifer Meyer-Smith

    Ok John Armour, excuse my ignorance.

    Now that you know I’m interested in open, new economic ideas that can be borne out of understanding the positives that can be drawn out of MMT enlightenment, I’d like you and other MMT exponents to offer suggestions of how we can initiate the positive, alternative, progressive economic measures and put them into action. What practical outcomes can we hope to achieve?

    These are the values and prospective achievements that need to be advocated to any reforming political forces now so they can be built into true alternative, reformist economic policies and implemented asap.

    By seeing what you suggest can be made available to us in the short, medium and long term, we will be able to add to the list with other brave ideas.


    think laterally. If both the Greens and Labor see that a working Alliance will help them to win the hearts and minds of the voters, they will put aside their Tit for Tat behaviours.

  250. cornlegend

    Jennifer Meyer-Smith
    If you have ever worked on either Albo or Tanyas elections and seen the dirty tactics , it’s a wonder someone hasn’t ended up lateral,

  251. achu4112

    John Amour I agree, very true.

    However, it doesn’t automatically follow that the “reckless Labor spending” myth is destroyed.

    It will be hard to convince the public, the most reckless economic polices have been recent Hockey attempt to move toward surplus simultaneous to economic down, remove industry support and cut welfare.

    Prior to that, the Costello surpluses came at the expense of massive increase in household debt, making lower income families less resilient to Hockey’s proposals.

    That we didn’t tax and spend wisely during the mining boom, is a lost opportunity, wealth opportunities for poor Australians wasted. Not govt spending now can make up for it, the productive capacity of Australia has DECREASED during the mining boom, THAT means that MMT, the govt can spend less, print less money now than it otherwise could and still be fiscally responsible.

    MMT is not a ‘magic bullet’ and doesn’t have really solutions for intractable problems facing the global economy, which, for the foreseeable future, are forced to be apart of by our own choices and largely for our won benefit.

    MMT shows the myth of the right’s argument to cut spending. BUT PLEASE do ya home work to understand the real and absolute contraints a govt faces on taxes and spending and they ARE very munched linked in MMT.

    Yes we (gift) should be spending more right now, MMT (and other economics) say the is good for all if it: increases production, in the longer term increases our productive capacity, and doesn’t have adverse effects like inflation.

    I’m in a safe Lib seat, will prob vote Greens, prob in the senate too.

  252. achu4112


    …lateral collateral ?

  253. cornlegend

    I can’t help myself, :-} I grew up in a house where “The Strangler” was a frequent visitor and used to love going to Branch meetings as a little kid while he was State member and then Federal Member
    I think a bit of his stubbornness rubbed off.
    Geez, I might nick off and buy a hat like he wore :-}

  254. diannaart


    You wrote: “The Greens have thrown buckets of money at trying to defeat both Albanese and Plibersek”

    Are Plibersek & Albanese as progressive as they claim? Please understand that I still, very much, want to believe they are progressive but….What have the Greens been doing to Bill Shorten and the rest of the right-faction?

    I am not being deliberately provocative, however I can understand why the Greens get nasty because; Quid Pro Quo, Labor have hardly made friendly overtures towards the Greens.

  255. Florence nee Fedup

    Has anyone created similar list achievements for this government.

    Needs to include the defunding and reduce defunding of community based bodies, along with such things as young people’s boards to advise government.

    Where they haven’t cut funding, have muzzled their advocacy voice on behalf of their clients.

    Much harm has been done outside budget, by regulation.

    Labor builds. Liberal demolish.

  256. cornlegend

    “Are Plibersek & Albanese as progressive as they claim?”
    I have my own personal opiniion about them both {which I won’t bother you with} but hey Labor is trying to win Government and if you read around the traps {here on IA as well] Albo is the peoples choice and Tanya is well up there .
    How many ALBO for Leader comments have you seen .
    My point is they are KNOWN and have performed.
    I think the Greens stood Nancy and Norman Nobody against them :-] {and don’t get me started on my local fool }
    Now given {it seems} the bulk of voters seem to make up their mind on the way to the Polling Booths, familiar faces are necessary
    “What have the Greens been doing to Bill Shorten and the rest of the right-faction? ”
    I’m not big on the faction thing . Some of the past “Left wingers” have been absolute scumbags and some branded “right” have been pretty good .
    The Greens, to me are just another political Party to beat .
    They have the same ambitions
    They want to beat Labor ,
    along with all the rest :-}
    IF, you know the best you can do is maybe one MP, you can have all the wonderful sounding policies in the world, simply because you know you never have to deliver .
    You don’t have to try to win me over to the Greens, that’ll never happen .
    You need to work on the 91.7 % of the voters who just don’t want them

  257. cornlegend

    Florence nee Fedup
    “Has anyone created similar list achievements for this government. ”
    Yep, Me :-]
    Here it is ……………………………………………
    Dumped Abbott……..
    Kicked Helmet Head out of the Speakers Job…………….

  258. diannaart


    Not trying to win anyone over to anything – I prefer if people think.

    Yes, I have followed both Albo and Plibersek – and have to wonder WHY the Greens would target them instead of the, I don’t know how else to put this other than, “conservative faction”.

    FYI – I don’t believe any large political party is free from factions – not humanly possible.

    I would like to see an Alliance of like minded political groups – I don’t believe we are going to see less independents and the Greens are not going anywhere, other small parties are gaining traction as well.

    I guess for both the LNP and Labor that winning is everything.

  259. Florence nee Fedup

    I keep hearing that over last 3 decades, Labor has whittled away this great Labor. What has exactly been whittled away?

    If the country, politics and people don’t go down path of renewal they will sink into the ether.

    We need to concentrate on what is needed today, not what work a generation or more ago.

    Families are no longer rely on dad to survive. Kids no longer leave school at 14 or earlier. Most go onto tertiary education of some type.

    We no longer slave for minimum wages in factories of 2 or 3 thousand employees. We no longer hold same job for life.

  260. Jennifer Meyer-Smith


    since you seem to be well-informed from the inside of Labor, why haven’t Labor listened to the people’s choice of Albo or possibly Plibersek?

    Labor factionalism stinks just as much as bloody-minded, ignorant stubbornness to stick with archaic political dictates and ideologies of entrenched political parties that are not open to alternative, new ideas that have merit.

    When I advocate the Left and the Left-Centre, I’m doing so from a principles, values base, not a convenient political machinery position. I want all the ‘good people’ in the Alliance, not the party pragmatists who want to win at all costs regardless of the principles and values that would become casualties.

  261. Florence nee Fedup

    No Cornlegend, they have done much. We have lost much. Needs to be listed. Much of the nasties in that first budget were scheduled to come into being this and next year.

    Abbott intended a budget before now, so no one would noticed. Look at the list that turned up on New Years Day. Schoolkids bonus phrases out July. Many won’t miss it until after election. That is just one example.

    Shorten attacking government on blow out of time asylum seekers being held.

    Yes, they support much of their refugee policies, in fact most was Labor’s. They don’t support the cruel way this government administers that policy. This has been clear since last years National Conference.

    Shorten, yes on surface appears to support this government ugly policies. Truth is, Shorten has left himself and Opposition wriggle room to condemn the government.

  262. cornlegend

    “….. Labor that winning is everything.”

    Sure beats coming second mate , :-}

    I’ve had enough,, living through Menzies, Holt, McEwan , Gorton, McMahon Fraser ,Howard, Abbott and Turnbull to do me :-}
    and the bastards just get progressively worse :-{

  263. randalstella

    What are Labor going to do about the bestial treatment of asylum seekers? Are they going to continue to knuckle under to the Liberals?
    It’s a simple question.
    I raised the issue of the death threats by guards against the main witness to the murder of Reza Barati on Manus Island.
    Some Labor supporter here showed no interest in the plight of this man, but was very concerned to obfuscate accusingly; I assume objecting to the raising of the matter. This sensitivity suggests warped priorities. This is the kind of loyalty to the Party that will demolish it. It is voting by old brand name.
    I will not vote for a Party that supports the regime of concentration camps, staffed by unaccountable thugs. Bad luck if that offends sensitive nostalgic souls.

    On the treatment of the most vulnerable people under the supposed care of Aust. governance, the Labor gutlessness stinks to the high heavens. While it maintains this ‘policy’ of gutless acquiescence, Labor are a carcass of a Party. No matter how many of the callous and obtuse electorate they manage to assuage.

  264. cornlegend

    Florence nee Fedup

    Hey, I only listed the good things ,
    not enough years in this old dog to do a complete list of their stuff ups.
    Stuff me, the Mitchell Library would never be big enough hold a list of their crimes against society

  265. cornlegend

    To be bluntly honest, It is my personal view that not much will change, just maybe a bit more compassion thrown in .
    The cold hard facts of day are all the while better than 70% of the population don’t want asylum seekers here , public opinion {and their votes} will govern policy .
    It isn’t much of a fix, but it will be more of the same or maybe a softening up under Labor .
    All the other Parties will have bugger all influence {IMHO}

  266. diannaart

    Sure beats coming second mate , :-}

    Even if the winner is beholden to big-business and economic rationalism?

    I’ve had enough,, living through Menzies, Holt, McEwan , Gorton, McMahon Fraser ,Howard, Abbott and Turnbull to do me :-}
    and the bastards just get progressively worse :-{

    No argument from me

    The Libs turn out a more infected breed of nasty than Labor – but that is not good enough. Each change of government during the past 30 years has resulted in a further shift to the right – it’s getting so we can’t tell who is progressive and who is not any more.

  267. cornlegend

    Jennifer Meyer-Smith
    “why haven’t Labor listened to the people’s choice of Albo or possibly Plibersek?”
    Because the ALP went into the implementation of Rank and file participation in selecting the Leader and at the time, the structure
    produced Shorten as the winner . {after a loong loong month }
    It was peoples, choice, Caucus choice, Union choice , not just on strand
    I made it known then, I voted for ALBO, but accept that the result under the formula at the time produced Shorten

  268. Kaye Lee

    There are people in the background who I think are good. Terri Butler has been impressing me. I think Andrew Leigh is very good. I’m watching Tim Watts – I know little about him but he has been popping up in some interesting places. I think Sharman Stone sees through a lot of the crap. I’m impressed by Larissa Waters. Doug Cameron can be worthwhile but sometimes gets carried away. Scott Ludlum works hard too.

    As far as dirty deals are concerned, the Greens preferenced PUP senate candidates in front of Labor in SA and Tassie and maybe Qld too? We really need to get politics out of parliament.

  269. cornlegend

    I have a place in my heart for Billy McMahon :-} {no, make that hands}
    Years and years ago a mate bought me a ceramic Billy McMahon Beer mug
    Geez he comes in handy mate,
    The more you drink the friendlier the old fool looks and the more you have,and unsteadier you get , the bloody giant ears give a ripper grip
    Me and Billy have drifted into Noddy Land together on a few occasions :-}

  270. cornlegend

    Kaye Lee
    Keep your eye on Terri Butler and Steven Jones , I predict good things there .
    But hey where do my predictions get me ?
    You might need a Billy McMahon Beer mug mate :-}

  271. diannaart


    Loving the visual image – a good point to stop (for now) with a smile.


  272. randalstella

    Not much of an answer.
    A ‘bit more compassion’? Like what?
    The Labor spruikers don’t show much interest in the issue. And yet they say that it turns elections. How strange is that? Why not discuss the issue? Is Labor to to be a furtive weasel of a Party forever? This refugee problem is not going away anytime soon.
    These supporters are like their Party: they just wish the matter will disappear off the map. That seems to be the reason why Labor supported legislation that makes it a criminal offence to relay information about what is going on in these concentration camps. That is support for totalitarian law. They supported it despite the reports of rape and murder from these places. What is the moral climate of a Party willing to do that? What have they become?

    Where would this country be if Labor policy in the past had been dictated to by reactionary forces and an ignorant public?

  273. Kaye Lee


    The refugee problem will not go away so we must have a plan to deal with it. The region has to agree on disembarkation ports, safe places for the boats to head to that have facilities to cope with arrivals, to register and process them, with a defined pathway of where to from there. The destination must have services in place to deal with new arrivals including mental health experts, culturally aware social support, health and education facilities, housing, English lessons, and assistance to find employment.

    Doing this properly will not only help refugees on their path to a new life as a productive citizen but also provide worthwhile employment for those employed in the resettlement.

    Plus it would be a shitload cheaper than locking them up.

    Why is this so tough for our politicians to understand? It is only political fear. If Shorten and Turnbull agreed to let the experts plan this then there is no political pain.

    I would like to see Gillian Triggs, Julian Burnside, Malcolm Turnbull, Bill Shorten, Ricky Muir, and I guess we’d have to include SHY, go on a tour of Manus and Nauru together.

  274. randalstella

    Kaye Lee,
    It can be done. Adversarial Party politics gets in the way.

  275. cornlegend

    Not much of an answer.”
    Mate, I tried to answer you honestly, as to my view of what will happen .
    I didn’t say it was right .
    The thing you have to change first are those 70% of the voters who don’t want asylum seekers, full stop.
    If you dare, you just need to read Bolt or Pickering etc .
    The end of Rudds PAcific Solution just accelerated us to where we are
    The bottom line is, both Parties, LNP/ALP want to win .
    If the perceived notion is, people don’t want asylum seekers, that is where policy heads .
    I don’t wear rose coloured sunglasses, I know Labor make some shocker decision and have had major blews inside the Party over the years , but in my perspective, they do more good than the other lot, and seeing one of the two will win ,I have to accept that I support the majority of policies but not all.
    No LNP for me, no way no how.
    Can you tell me in all honesty if you think anyone other than Labor or LNP will be the government next [ may be 3 months)
    unfortunately, as you say “this problem won’t go away” , but it won’t be a big change, maybe a softening, until the people , that 70% soften

  276. Kaye Lee

    Real leaders wouldn’t need the 70%. If both major parties agreed to do what is right the bogans would just have to accept it. Malcolm Fraser didn’t ask the electorate what it thought.

  277. cornlegend

    Kaye Lee,
    you forget things changed and will probably never recover in any party cooperation .
    Tony Abbott saw to that during his time as Opposition Leader, refusing pairs for funerals, sick kids etc and his outright acts of bloody mindedness and bastardry .
    Some I know will take a long time to forget.
    Leaders need both Houses now to take bigger steps , and it looks like Malcolm will get both Houses

  278. Jennifer Meyer-Smith

    Thanks cornlegend,

    for your answer about people’s choice, caucus choice and union choice that got Shorten in as leader. I understand that but I was wondering if you could shine any light on the dynamics involved? Was it a third, third, third voting power distribution? Or better still, perhaps it should be 50% people’s choice and 50% divided between caucus and the unions?

  279. cornlegend

    Jennifer Meyer-Smith
    Shorten won the contest after recieving 52 per cent of the combined vote of caucus and rank-and-file members, who got a say in the party’s leadership for the first time.

    Shorten Albo

    Caucus votes 63.95% (55 votes) 36.05% (31 votes)
    ALP membership
    (About 30k votes) 40.08% 59.92%
    Overall vote 52.02% 47.98%

    this process is still evolving
    {I want 75 R&F 25% Caucus} :-}

    What may be of interest to you is that Labor {NSW} and now other States have trialled community preselection {2014}
    Any resident of the electorate can vote and the breakdown is
    50% community vote

    50% Members vote
    This has been really a goer in some seats where up to 6000 voted

    “Labor is trialling community pre-selection in five seats, throwing open the votes to ordinary residents as well as rank-and-file party members.
    Over ten percent of the electorate of Balmain has voted in the Community Preselection to select Labor’s candidate for next year’s state election.
    Over 5600 people voted in the primary-style contest online, in person and by postal ballot.

    “This unprecedented result has engaged the community and energised local branch members. Community preselections are changing the way the Labor Party engages with the Community, and they are responding.”

  280. Jennifer Meyer-Smith

    Thanks cornlegend,
    75% rank and file with 25% caucus sounds even better. If unionists want to vote, they can be part of the 75% rank and file.

  281. Jennifer Meyer-Smith


    I also really like the community pre-selection concept of allowing ordinary residents to vote in Labor pre-selection. I think that is a great way to get grassroots people engaged in politics. It’s also a meritorious step forward by Labor to meet the aspirations and expectations of what the community in each respective electorate is concerned about.

    Kudos to the people within the party who had the initiative to think it up and put it into action. More of that type of progressive thinking is needed if Labor is to regain the perception of high integrity in the eyes of voters. Even the least discerning like to know political decision-makers are listening to their voices.

  282. John Armour


    For policy ideas I can’t go past those Kaye Lee detailed above. If the Australian Progressives just cut and pasted that as their manifesto I’d be delighted. I’d just add something about using the fiscal capacity of the government to create full employment as in a Job Guarantee.

    But asking me ‘and other MMT exponents to offer suggestions of how we can initiate the positive, alternative, progressive economic measures and put them into action.’ I think is to be putting the cart before the horse.

    We’ve been living in this benighted neo-liberal free-market paradigm for decades now and we know that the adoption of most if not all of these policies is unlikely.

    Put any one of these progressive policies before any member of the House or the Senate and you’ll be met with the same: “when we get back into surplus” or “ when we find the savings”.

    So my response to your request is to say we’ve got to promote a wider understanding of MMT first, or at least the insights of MMT.

    And the best way to do that at this stage is jump on the various blogs and talk about it.

  283. Backyard Bob

    Kaye Lee,

    Real leaders wouldn’t need the 70%

    So, real leaders reject fundamental principles of democracy? I appreciate the notion of moral leadership but I think a discussion of its occasional direct conflict with broad community attitude is required here. For me it’s a real and abiding difficulty (and has always been an entrenched problem for the theory of democracy).

    If 70% of the population support marriage equality we are happy to demand! a government accept this and act according to the democratic principle involved. But if the same percentage support a policy we disagree with, we suddenly toss that democratic principle out the window and offer invocations to the incredibly nebulous and mosaic idea of “moral leadership”.

    I’m sorry, that doesn’t work. We need to work on the public attitude to this before we can even begin to expect political action of the sort we might desire. We don’t own morality, politically or ethically. If we can’t point our accusing finger at our politicians and say we have majority sentiment giving strength to our arm, are we not being undemocratic? What is it we’re saying? We’re a lefty minority but as you know we’re always right?

    The only way to change the politics, in my view, is to create a community that not only can the major parties not ignore, but one that makes them scared. It’s the only way I can see. We don’t currently have that and that’s precisely why the major parties don’t give a damn. Neither of them is electorally threatened by this issue, of itself.

    The question is how we might change that – obviously with special regard to the Labor Party. My only solution to that, however trite and naive it may be, is for nominal Labor Party voters to contact their members and tell them they will vote for the Greens if Labor does not move on the issue. But this must be done en masse, otherwise it won’t have any impact.

    Perhaps AIMN could think about how to enact such a campaign. Mind you, if you include a petition I’m going to have to enact a form of genocide the likes of which no-one has seen since the last Star Wars movie. I better add a 🙂

  284. randalstella

    I appreciate you engaging in this conversation.
    Yet, surely you are not claiming that the morally depraved knuckledragger Abbott is any excuse for a policy collapse by the Party once great enough to be led by Gough Whitlam and Don Dunstan? Where is that courage now? Labor overthrew its White Australia policy. Did it wait on bigots to change their mind? It set about changing people’s minds.
    You say you are being realistic. But you seem to be missing this basic and constant reality: politicians have always been telling the public what to think. Gough Whitlam did it.
    Deplorably so did that grubby louse Howard. The present evil treatment of refugees was not contrived by the public. Labor have not recovered from Tampa coming over the horizon – as the agile demon Howard announced it. I remember it as a shock, and dread. And it has turned out worse than I feared. And, you’re right, Abbott has a major part in that worsening.
    There needs to be a non-partisan reform to get rid of these concentration camps. Labor could lead in this. The present paradigm just means Labor will stay running scared on refugees indefinitely. But it is a world issue they simply cannot keep running from every time it is mentioned.
    Turnbull is not a truthful man. But he is not Abbott; and Labor and the Greens should be pressuring him on the basic decency of change. The present approach is unsustainable; and its proponents and fellow travellers will have an ignominious place in history. History comes at a rush.

  285. Kaye Lee


    At some point, leaders must make decisions that the majority may not agree with and I would suggest that is the case in both the examples you quoted because they both involve the protection of minorities, something that should be done regardless of what the shock jocks or the religious fundamentalists or the “patriots” believe. Incarcerating innocent people indefinitely is illegal. Discriminating against someone based on their sexual orientation is illegal. Just because the sugar plum fairy in Queensland doesn’t like it doesn’t change the fact.

  286. John Armour

    “However, it doesn’t automatically follow that the “reckless Labor spending” myth is destroyed.”

    And it probably never will Andrew so long as the Right owns the media.

    However, Labor’s had to live with that since the days of Gough but still gone on to win elections.

  287. cornlegend

    No, in a roundabout way, I was saying the politics, worldwide have gone Right .
    Before any Leader now would go out and go against the percieved majority of the community { that 70%} they would need control of both Houses, as Howard did so they can just jam stuff through and hope the electorate forget before the election rolls around.
    You say “Gough Whitlam did it.”
    He did, bloody legend, my hero, but how long did he last after that ?
    As you say
    “History comes at a rush.”
    The next most popular bloke with Caucus in Whitlams Cabinet used to wander around saying .

    ” Give me men to match my mountains,
    Give me men to match my plains,
    Men with freedom in their visions
    And creation in their veins.

    The world has gone Right since those luminaries.
    As for
    “But you seem to be missing this basic and constant reality: politicians have always been telling the public what to think. ”
    not in the world I know, they live and breath focus groups, opinion polls , electorate polling non bloody stop 24/7 polling.
    You have the results of polling and focus groups discussed each morning at Caucus meetings and the arvos questions for QT based around those polls .

    All I was trying to do was give my personal view , and as for asylum policy not much will change {IMO}

  288. cornlegend

    Backyard Bob .
    “. We need to work on the public attitude to this before we can even begin to expect political action ”
    That is all I am forever saying !!

  289. Backyard Bob


    Whether politicians drive public sentiment or public sentiment drives political attitude is a rather difficult matter to analyse. Certainly, one might say Whitlam drove public attitude, but to what extent did he actually tap into extant public desire? I’m not sure we can ever say anything definitive about that dynamic, then or now.

    Tampa screwed Beazley over big time. I was looking forward to him as PM, frankly, because I thought he would be a pretty decent one, but he caved, and in doing so negated that belief. But his caving was in no way aberrant to a consistent Labor narrative on refugees and immigration spanning decades. It was almost as if Beazley resorted to type. It was probably my greatest disappointment as a dedicated Labor Party supporter. I have never quite recovered.

    I’m inclined to think, in the grand tradition of social media commentary hyperbole, that the greatest question facing our country right now is: what sort of man is Malcolm Turnbull, ultimately? Is he, alone, pivotal to out future, at least to some extent? I have a funny feeling he is. I have a funnier feeling we’re going to be underwhelmed by the answer to that question. But I remain hopeful I may be to some degree wrong.

    I will say, without fear of my Genever running out, that the Labor Party’s stance on refugees and asylum seekers will not improve unless some mechanism can be devised to make them electorally concerned. But that observation is, in itself, cause for deep ennui because it suggests that Labor’s contemporary moral substance is now altogether poll rather than ideology driven.

  290. Backyard Bob

    Kaye Lee,

    At some point, leaders must make decisions that the majority may not agree with

    At what point and in what context? Do you concede the difficulty that I articulated? The current Government is effectively making a decision on marriage equality that the majority don’t agree with. So, that’s ok, then?

  291. Kaye Lee

    At the point where their stance is illegal which, in both those cases, it is.

    Likewise action on climate change. The vast majority of the population are not capable of understanding the science. Whether they want a price on carbon or not, we are going to have to have one in some shape or another. Our politicians have the best brains available to advise them. Once they have been elected they are entrusted with the responsibility of making decisions which are in the best interests of the people regardless of whether they like it or not – like taking your kid to get vaccinated or to the dentist.

    The weak-kneed pandering to focus groups and polls is not governing – it’s what toady no talent no vision suck-ups do. It is their job to explain what must be done and why, not to react to populist crap from ill-informed bogans. That is no way to run a country and I have no respect for people who are led by advertising.

  292. Backyard Bob

    Kaye lee,

    At the point where their stance is illegal which, in both those cases, it is.

    I’m sorry, I must have missed those cases. They are?

  293. Kaye Lee

    In my opinion yes. Seeking asylum is not illegal and you cannot punish someone because of their method of arrival. It is against international law. And it is against the anti-discrimination act to discriminate against someone based on their sexuality which we are most definitely doing by refusing to allow them to marry.

  294. cornlegend

    Kaye Lee,
    Don’t know much on the subject but I was told by a gay friend that the anti discrimination act isn’t effective against .
    “The Australian Marriage Act 1961 is a law made by the Australian Parliament which regulates the rules for the recognition throughout Australia of marriages. The 1961 Act has been amended a number of times. The Act applies uniformly throughout Australia, and States and Territories are precluded from making any law inconsistent with the Act. Australian marriage law does not recognise any other forms of marriage, including traditional Aboriginal marriages,[1] same-sex marriages, nor polygamous marriages”
    I have been told it over rides the anti discrimination act,
    Do you know if that is the case ?

  295. Kaye Lee

    Oh I dare say it does when we come to the courts cornie but only because they choose to interpret it that way. I hate the legal system. I am talking about the spirit of the law rather than the letter of the law.

    How can you have a law that acknowledges homosexuals should have all the same rights as heterosexuals, that it is illegal to treat them any differently, and then say except for this. It makes no sense.

  296. Florence nee Fedup

    Politics is the art of the possible.

    One can do little out of power.

    Therefore getting elected is the first hurdle to be overcome if one wants to do good.

  297. Jennifer Meyer-Smith


    good principles, strong convictions with merit and good policies advocated in advance of elections are what sway the public to listen and to vote for a party. Being seen to make allegiances with other political parties of strong conviction also helps to mobilise the public to listen and prepare for the elections.

    What you say is ofcourse important; nobody is disputing the practical need for majority votes in our present system and even when proper proportional representation begins to happen. Without conviction to good principles and policies, then there will be limited support in the community.

    I beg to differ also regarding “One can do little out of power.” You seem to have forgotten the teachings of Windsor and Oakeshott who were able to negotiate significant positions for themselves and the people they represented by having LNP and Labor vying for their attention. Gillard was the victor because she took them seriously and Abbott sooked for 3 years.

  298. randalstella

    Thank you cornlegend.
    In a roundabout way you have been acknowledging some of the reasons why I can’t vote ‘1’ for your Party.
    You add to them your criticisms of the populist poll-driven responses that substitute for policy.
    For example Bill Shorten is back from leave, it seems all polled-up for action. ‘A 15% GST is a bad idea’, goes Bill, mentioning ‘15%’ as often as he mentions ‘GST’. So, can we pencil him in for, say, 13 or 14%?
    The problem with this poll-driven response is that it makes all politicians seem about the same. I suppose to his credit, Bill appears shifty when he does this.
    I know Bill’s saying ‘15% GST’ over and over to get it into the MSM grabs. But policy is an extended and detailed thing. I would like to know what his policy might be. Not just the Media-tailored grab. Bill’s no Paul Keating on anti-GST hype.
    I like some of the Greens’ policies which could not possibly be drafted merely on a short-term motive of a sloganeering advantage for a coming plebiscite. Consistent with your critical observation on poll-driven politics, you cannot castigate the Greens for putting up what they believe to be right, rather than instantly popular. You wouldn’t do that at all, would you?
    Besides the Libs, a common enemy is the pro-Liberal MSM; pivotally the ignorance and shallowness at the ABC.
    Thank you anyway.

  299. randalstella

    If the processes of so-called democracy provide circumstances for rape, murder, and victimisation – then bugger the processes of so-called democracy. I write as a stickler for due process and law and order.

  300. randalstella

    Thank you BYB,
    I have no doubt that politicians have a much greater long-term and opportunist policy leverage on the public than vice versa. I have never met an entrenched pollie not one million miles away from the public. Even the populists. Perhaps even especially them. It’s a distance to be wielded like a handle.
    I remember the Tampa for exposing how Labor – by then a Party with Economic Rationalist ambitions – had lost any resolved idea on immigration and refugee rights. What threw them was the surge in support for Howard’s Nuremberg bit. They went along with it – and have seen no way back since.
    Politicians need to have a better developed sense of moral responsibility and a better trained reflective intellect than the general public – or else we would be governed by opportunist liars and troublemakers. Heaven forbid that this could ever happen here.

  301. cornlegend

    “Greens for putting up what they believe to be right”
    It’s been what ? 30 years and they still can’t get past 8.3%
    I’d rather a Party that got a lot of things right and got a chance to make change than one that doesn’t seem to have the ability to get off the blocks .
    Still, give them time,
    a dozen more LNP Governments ?

  302. cornlegend

    Florence nee Fedup

    “One can do little out of power. ”


  303. Florence nee Fedup

    Pray how does Labor have any leverage with LNP when in Opposition.

    Yes, agree they can have some influence if they get crossbench on side. Most of the time, they can only prevent legislation being passed.

    Labor can’t put their own policies into law.

  304. Florence nee Fedup

    randalstella, 15% Super contributions sound much better. Finishing off what Keating began.

  305. cornlegend

    “But policy is an extended and detailed thing”
    Not necessarily.
    It can be detailed, and discussed within the Party {as it is being done now} and ready for release
    Julia Gillard learnt first hand not to put anything out too early or you just give the Government, their tame media and hangers on too much time to spend lying, deceiving and twisting it .
    It also gives the Government an opportunity to cherry pick bits that miight suit it and claim it .
    Shorten would do well to have a raft of policies ready for release as soon as the election is announced .
    Who could forget the hammering Julia took for just announcing the date of the next election, months in advance .

  306. randalstella

    So, back on the same old theme. You are such a broken record. So, suck up to bogans and trick your way into power? And then let loose the real policies, right? Where has that got the mighty strategists of the Labor Party? It has got them into long-term Opposition.
    Labor have enormously more resources than the Greens. They have as main opponents the Liberal Party that represents in interests less than one percent of Australians. And where are Labor now?
    The Labor Party are complicit in concentration camps for refugees. Where murder and rape occur. Where anyone leaking information on what happens there is to be treated as a criminal and subject to arrest. What makes up for that?
    Name the policies that make rape and murder of the defenceless not worth making a fuss about? What a brave and dauntless Party. Is it to be running scared on refugees forever? Because this might mean it is seldom in power.
    This is killing off Labor in order to support the brand name.

    You can’t pretend to be chummy, deploring the populism that dominates so much politics; and then fire back what is effectively a populist defence.

  307. cornlegend

    “I know Bill’s saying ‘15% GST’ over and over to get it into the MSM grabs. But policy is an extended and detailed thing. I would like to know what his policy might be”
    Now I thought that would be easy enough ,
    NO increase in GST
    what else can he say ?
    He did Challenge Turnbull to a debate at the Press Club, but I don’t see that happening

  308. Jennifer Meyer-Smith

    Yes, the cherry-picking argument is always given in response to the call for a look at the policies to be offered.

    I accept there could be negative consequences if not handled properly. So, why not announce 000’s of public meetings ALL around Australia every two weeks until the election in significant venues for the public to attend public outlines and discussion sessions of public policy making. Good for two main reasons.

    One, Labor is informing the public of the direction of its thinking in broad brush strokes.

    Two, it’s receiving much needed feedback from the public as to its response and how practicalities and needs can be met, so that the policy is seen to be worthwhile and not just a lemon.

    That would be leap-frogging the LNP coz they could not be seen to denigrate what ordinary members of the public have helped to form. Also, Labor would not be giving away too many details which the LNP could manipulate and negate.

    Repeated meetings around Australia will build momentum and interest in the communities, making people more powerfully election ready for when the election is scheduled.

    I agree with you randalstella. Labor has to show some backbone and not just suck up to the bogan vote just to get into power. The bogans will expect Labor to continue like bogans afterwards.

  309. cornlegend

    “why I can’t vote ‘1’ for your Party.”
    I like the way the ALP has moved to electiong leaders and some R&F involvement in the process .
    I can’t handle the idea of a Party I might join , having a few hush hush background meetings, put the plan in place, give the ones they are trying to shaft {Bandt in this case} an hours notice , hold a meeting of a dozen or 13, elect a Leader and 2 Deputies, behind closed doors, refuse to divulge the vote , and then let the members find out off Murdochs Media or the like .
    Not much point raising it at Conferences either, as they are lock up closed door jobs as well .
    I only know this because a former Green member told me, and Lee Rhiannon sounded off about it .
    Meanwhile, Christines gone, Adams hamstrung and the reports are Di Natale is taking the “Right”
    ah the joys of politics

  310. randalstella

    This Greens gossip reads like a tinytown version to the stand over tactics by factions in Labor branches. I am not an uncritical supporter of any Party; and I have concerns for openness to procedure. I will vote Greens because I cannot in conscience vote Labor.

    Why do you not answer my questions? You pluck phrases out to suit some defensive reply and avoid the main questions.
    I will repeat them again. When is Labor going to stop running scared on refugees? The issue is not going away soon.
    Does the dreadful state of the concentration camps not concern Labor supporters; I mean personally? I don’t think some pseudo-realism about the current state of politics is any respectable reply on the abominations occurring in these horrible places.
    What do Labor supporters think about the Party’s support of the legislation banning any unauthorised information from these places – where a murder and rapes have occurred?

  311. cornlegend

    Jennifer Meyer-Smith

    “So, why not announce 000’s of public meetings”

    My understanding is that, right now Shorten is on a Tour of 200 locations , today Eden Monaro
    Lisa Chesters MP today joined staff at the Uniting Care Emergency Relief Centre on Forest Street as they prepare to help a growing number of local families who are struggling to cope with increasing costs of sending children back to schools,
    Terri Butler is firing folks up re an early election and having a community BBQ
    Stephen Jones MP
    at 3:35pm ·
    Two million osteoarthritis sufferers will be paying more for pain medication under this Coalition Government.
    Mark Dreyfus , today
    The Federal Government has again refused to release the telecommunications metadata of Attorney-General George Brandis,

    SAVE AUSTRALIAN HEARING PETITION LAUNCHED IN HUNTER Monday 11 January 2016 Federal Member for Hunter, Joel Fitzgibbon has today launched a…
    Joel on Twitter
    Rubbish.Joyce has given Tas farmers no drought help. Indeed took $10m off them

    They are all out there
    What can they do if Media don’t cover them .

  312. cornlegend


    “Does the dreadful state of the concentration camps not concern Labor supporters; I mean personally?”

    I can’t answer for Labor members “personally” no more than you can for the Greens

    “Why do you not answer my questions?”
    I have tried, just continual asking won’t get the answer you want .
    Would you like to give me the answers you Want, then me form a question ?
    IN MY OPINION, there will be little change to Asylum seeker policy , regardless of which Party form Government.
    I believe that Labor will have a softer approach than the LNP
    I believe that while elections are decided by popular vote, and continuously, 70+% of those voters are opposed to Asylum seekers coming here , not much will change
    When those concerned work on community attitudes ,things might change somewhat .
    Your question “”Does the dreadful state of the concentration camps not concern voters” is more the question to ask, and on that I would have to say no

    What else do you want me to say ?

  313. randalstella

    Do you seriously think that is a reply on the moral issue? Would it make any difference whatever happened in those places?
    I’ll take it as support for Labor policy. That’s what you want, isn’t it?

  314. Jennifer Meyer-Smith

    I have a recommendation for Labor, cornlegend.

    We can reduce the yearly intake of economic migrants to accommodate a larger number of asylum seekers to be allowed in immediately upon timely, humane, equitable processing. This means the gulags aka detention centres will be a thing of the past saving innocent people from torture and insecurity, and saving the public purse from wasted funding for Transfield aka Broadspectrum and Serco and other parasites.

    It is up to Labor and the Greens and other honest politicians to differentiate correctly between, who an economic migrant is and who an asylum seeker is. Because the case of the asylum seeker is far more urgent and life/death defining, the balance should be pointed in favour of asylum seekers.

    That way critics in the community, who oppose humane relocation of asylum seekers and refugees into Australia on the grounds of diminishing job opportunities and housing availability, would be more conducive to allowing more prompt treatment of asylum seekers.

  315. cornlegend

    “I’ll take it as support for Labor policy. That’s what you want, isn’t it?”
    How can you do that . in all seriousness.
    I know you have been looking for an angle but please don’t invent things .
    “Do you seriously think that is a reply on the moral issue?”
    I was answering your question as a “political issue”
    That is what the voters decide on .
    The question to them is always posed. “On the issue of asylum seekers…”
    Not “On the moral issue of Asylum seekers….”

    Jennifer Meyer-Smith
    “I have a recommendation for Labor, cornlegend.”
    May I suggest you email your suggestion off to Labor.
    As it is now, Labor are in Opposition and are in no position to act on your suggestion, even if they wanted to .Greens either .

  316. Miriam Possitani

    I have read back over all your comments and find your frank honesty very refreshing as well as educational
    Can I ask, where do you get your patience ?

  317. Kaye Lee

    cornie is a realist with experience on the front line. I have respected and enjoyed reading his contributions for a few years now.

    I agree with the statements by all contributors.

  318. cornlegend

    Kaye Lee
    The respect is mutual mate ,
    Yep, I guess we do go back a few years eh ?
    Trouble with age mate, the older you get the steeper the bloody rollercoaster gets :-]

    Miriam Possitani
    experience? school of hard knocks , with honours :-}

  319. randalstella

    Kaye Lee,

    How can you agree with the statements by all contributors?

  320. randalstella

    It is a simply untrue to claim that Labor has no effect on Government over policies related to asylum seekers.
    For example, Labor could have opposed the legislation that bans all unauthorised information coming from the detention centres.
    These are the places where one man has been murdered, and rapes have occurred. What else could be happening there? Does Labor care?
    They voted for this totalitarian law. Basic decency is beyond them? Is this what is meant by ‘politics’?

  321. Florence nee Fedup

    Are some saying that governments shouldn’t take notice of what 70% say they want. As much as I disagree with them, they believe they are right. They have a right to be heard,

    It is called democracy. Life is not perfect. We can never have all we want,

  322. Kaye Lee

    I realise saying I agree with all contributors when a debate is going on is hard to understand but I do. I abhor what is happening. I am very critical of both major parties for their stance on asylum seekers and I think all it would take is for the two leaders to go there together as I have said before.

    That being said, I also understand what cornie and BYB are saying is true. We must change how the community feels and for this I also blame the media. The reality sux big time and it should not be this way. We should have leaders who refuse to make refugees a political football but we don’t so we must work with what we have and try to force change. Getting rid of idiots like George Christensen and Andrew Nikolic next election would help enormously. As Tony Windsor said, it doesn’t really matter who puts up the plaque as long as it happens.

    I am willing to pursue whatever gets these people out of the hellholes we have created. I hate Labor’s compliance but I believe they will at least allow oversight which will cause the change I want albeit slower than should happen. If the International Court and the UN can’t force us to stop this inhumanity then we have to find the way and, as others have mentioned, whilst the Greens stance is the only conscionable alternative, they will not be in power to be able to help these people.

  323. Annie B

    @ randalstella ….

    I hesitate to bib in here, but having read the last 100 or so of the comments here, something stands out – hits me in the face actually.

    cornlegend said : ” Julia Gillard learnt first hand not to put anything out too early or you just give the Government, their tame media and hangers on too much time to spend lying, deceiving and twisting it .” (January 13, 2016 at 5:59 pm ).

    This is SO correct. Why give the opposite team, your game play ? I suspect, and sincerely hope, that Labor is sitting on a swathe of policy to be produced at the right time. They all play a dirty, crafty game, and Labor will play it as well – and if that means sitting on policy for a while – so be it. It’s the end game that counts ….. The Grand Final !!!


    You have repeated your chagrin and disgust at the murder, rape and isolation of refugees on Nauru and Manus etc. with which I agree totally —- it is beyond despicable. …. But it is of no use to blame Labor for not upending it, nor to blame the LNP for endorsing this wicked state of affairs, and worse, doing absolutely nothing about it.

    The problem is ( at this present time ) – – – politicians ( no matter of what party or persuasion ) care not ONE IOTA for the suffering of these ( or any ) people. It is not politically expedient to do so at the moment – even though normal, decent and humane thinking voters in Australia ( largely ) clamour for an answer and for a successful end to these vile practices.

    It is the way politics works. Always has, always will. There is absolutely NO honour in those Canberra halls of legislation, in kindergarten Question Time, or in the clever and sauve rhetoric put out by a smiling PM – who is nothing but a wolf in sheeps clothing.

    Could you tell me ( one example will do ) when ANY poltical party in power, has bowed to the dictates of the people ? … exactly as the people have demanded. My suggestion is – – – NEVER. Not in the true sense.

    They ( to a man / woman ) will give good rhetoric about it all – promise all and deliver nothing, and then throw the concerns of the people – their voters ( no matter which party ) on the scrap heap – or into the ‘too hard’ basket.

    Of the two ( 2PP ) parties, I think the only ones who might – – – that is MIGHT – give a rats’ backside about what the people want, is the Labor party. …. The LNP certainly will NOT. …. They are on the side of the big wigs, the moneyed bods, those with wealth – et al, needless to say.

    Meanwhile, true democracy takes a massive beating – and honesty, integrity is out the window. I cannot see proper democracy returning in my lifetime ….

    Pollies are all tarred with the same brush randalstella ….

  324. John Maycock

    “Labor could have opposed the legislation that bans all unauthorised information coming from the detention centres.”
    And what good would it have done .
    The LNP even with the minors against them would still pass it by 30 votes
    Sure for a Media stunt, knowing full well they couldn’t win the vote they could have opposed it but the result would remain
    It is just like opposing the sun rising in the morning , you can do it every day but the result never changes
    but I suppose with 1 out of 150 {Bandt} the Greens could have voted against it for propaganda purposes

  325. Annie B

    @ Kaye Lee ….

    The International Court and the UN ( Convention of Human Rights ) … as regards actually doing something about the insufferable, dastardly occurrences on these ‘detention centres’ ( read ‘prisons’ ) … are cut from the same cloth as all power hungry bods across the world. The leaders in that load of indiscretions and ‘care less’ attitudes, are the politicians. ….. Everywhere.

    Yes, we do have to find a way – we, the people that is, in regards to our own country. …. Because it is only us who might effect a change. …. The bastards at the top will NEVER do that. … Doesn’t suit their grandiose self-important agendas.

    I don’t claim to have any you-beaut theories – except to say – at the ballot box. THAT is the only say we truly have. …. I do believe a whacking great change in the way we vote, might do the trick – put a grenade up the arses of the powers that be, ( and would be ) in this land …. and give them much to think about.

    Will it work ? ? ………. who knows, but it is worth a try.

  326. randalstella

    Kaye Lee,
    Yes, let’s wait 55 years for ‘the community’ to change its view. How is it to change without leadership, from a major Party? Everything of importance needs moral initiative, not ‘political’ answers. How the hell would Australia have withdrawn from Vietnam under such an attitude of appeasing reactionaries? We’d still be there, (I would not put BYB and the legend in the same basket. I think one at least might object.)

    I could not even get the Labor bods here to acknowledge the plight of the man under repeated death threats. It was like reference to him is taboo. They refuse to answer on the support by Labor for the suppression of all information from these places. So, Labor ‘policy’ on this is to obfuscate and distract with oblique replies? i thought this was a discussion site, not one subject to Labor spin merchants.

    Let’s not beat around the bush on this. If I am to spend time here discussing this issue, and not waste my time, I have to say what strikes me in the Labor cronies’ response. It is very much hard-wired to the current policy. They do not give a stuff about that man – if they can milk a few lousy votes from bigots and buffoons.
    I know there are good people in Labor appalled by this, and they are fighting for some basic decency. It seems a weird experience to attend this site, raise this important issue, and get not those people, but these Labor cronies replying.
    And fortunately I hadn’t eaten before I read the mutual admiration binge. I have zero interest in your old mateship. It’s all a bit corny to me.
    You might go back a long way. But I don’t know any of you. So, you are nothing more to me than your responses on issues now that I think important.

    I think the idea – hardly new – of a non-partisan review and visit, might just work. It seems naive and unlikely. But is it anymore unlikely than the current policy, including Labor’s slavish and timid support for it? Something has to be done. How many woeful years is it since Howard’s Tampa speech? The rotten little creep is still in charge on this policy.

    Kaye, instead of just writing here, are you willing to make contacts to see if this approach could be worth a try? I am willing if you are.You will get zero help from old Labor hacks. With the greatest of respect.

  327. Kaye Lee

    John Maycock,

    Shame about the Senate huh? They can pass whatever crap they want in the HoR but they aren’t having much luck getting any legislation through, reason being they have crap ideas.

  328. Miriam Possitani

    the insults are finished the rant has ended ,what now after the dummy spit, get the bat and ball and go home .?
    I read it all, you carried on like a spoilt little kid because a couple of commenters wouldn’t play footsy, you got angry because a couple of people on here had known each other for years ,
    You tried to badmouth a few commenters but anyone reading back over it will see, you really did make a goose of yourself

  329. John Maycock

    ” Kaye LeeJanuary 13, 2016 at 11:12 pm

    John Maycock,

    Shame about the Senate huh? ”

    I’m sure you are well aware that it was not a Bill and didn’t have to go before the Senate .

  330. Kaye Lee

    “How the hell would Australia have withdrawn from Vietnam under such an attitude of appeasing reactionaries?”

    I had a moratorium badge when I was in primary school. We marched in our thousands. We gave some politicians the courage to join us. We challenged government policy.

    “If I am to spend time here discussing this issue, and not waste my time, I have to say what strikes me in the Labor cronies’ response.”

    Hopefully that is what you have been doing. We all must express our opinions. We must talk things out. We may be small fry here but we speak to other people. As the Buddhists say, one small act of kindness can reverberate around the world. The same is true for truth. Keep speaking it but also acknowledge that we all fight in different ways. We all contribute as we can.

    “fortunately I hadn’t eaten before I read the mutual admiration binge”

    That was uncalled for and beneath you. We too have spoken for a long time and I respect you too. That requires no approbation or approval from you or others.

    “Kaye, instead of just writing here, are you willing to make contacts to see if this approach could be worth a try? ”

    As you have mentioned, you don’t know me or what else I do, and yes I am absolutely ready to do whatever I am able to help.

    We will be more constructive if we value input from others and listen to what they say. A goal is one thing. A way to achieve it requires cooperation. Your approach sounds more like a challenge than an invitation to help find a solution at times.

  331. randalstella

    OK Let’s do something.

    Please let me know what you are up to.
    You can get my private email from Michael or the admin. (You’ve probably got it already.)

  332. Kaye Lee

    I guess what I am saying is, do you see the value of the ripple in the pond as opposed to a tsunami? Are you prepared to strive for achievable goals rather than total capitulation to your (our) demands?

  333. Kaye Lee

    John Maycock,
    No I was not aware of that though I was speaking in more general terms. If the Coalition were to have a majority in both houses I would be very concerned.

  334. Annie B

    @ randalstella —- ( re : your post – January 13, 2016 at 11:05 pm ).

    ” I know there are good people in Labor appalled by this, and they are fighting for some basic decency.”

    So very pleased to see that you acknowledge that randalstella — thank you !!

  335. Kaye Lee


    I can see the email you use for comments. If that is not the one to use I will get it from Michael but I know he is on holidays and I go away myself tomorrow for 9-10 days with my g/fs. I suspect I will be incommunicado enjoying a lot of laughs with women I love and have known for decades.

    I will hopefully come back refreshed and, after getting the BAS out of the road, ready to join the fray. Keep in touch and keep spreading ideas of how we can be constructive.

  336. cornlegend

    Happy to get that little spray off your chest .
    “If I am to spend time here discussing this issue, and not waste my time,”
    That is up to you sunshine, the AIMN was around before you and will in all likelihood be after .
    What are we to do, wait around to hang on your every word of {no, wisdom isn’t the word I was looking for }
    And what a cheap shot this was
    “And fortunately I hadn’t eaten before I read the mutual admiration binge. I have zero interest in your old mateship. It’s all a bit corny to me.”

    Let me state, I don’t know Kaye Lee personally, never met the woman and know nothing of her private life .
    We have however crossed paths on various sites over the years and have made comments {not always in agreement}
    I respect Kaye Lee, enjoy her copious writings and acknowledge her tireless fight
    sorry if that makes you squirmish

    “I have zero interest in your old mateship”
    No one asked you to, can’t you zoom past some comments
    and as for a couple making a little comment being ,in effect , enough to make you throw up , makes you a sad sad person

    “I have zero interest in your old mateship”
    maybe if you had a mate , you wouldn’t be such a sad individual .
    Randalstella, you self righteous indignation has worn out with me .
    Go annoy someone else,cause I really can’t be bothered with you

  337. randalstella

    What a silly little fellow.
    Is that another of the ‘political’ replies? Looks like the approach at the Branch meetings when concerned people would raise the issue of asylum seekers. I know the abuse and hostility people have had to endure when they have expressed their dismay about this caving in to Abbott.
    I could not give a stuff about what you think, self-styled ‘legend’. You have not answered honestly.You have just done vague Labor spin. It was you who replied to me. ‘Political’ replies you eventually called your support for the Party. Maybe you could have said that from the beginning. Or not replied, given that you were only ever going to give the Party line; the hypocritical regret bit about political reality, that people like you reinforce.
    This is meant to be a forum for discussion, not for placating Labor hacks, and being an avenue for the advertising of reactionary policy, humanising the inhuman.
    It is easy enough to see why the Labor Party has some atrocious policies. Inhuman, totalitarian policies.
    For example when Labor supported the Border Force Act, they pretended like little scared varmints that they were actually protecting whistleblower rights under the Public Disclosure Act. The way to protect those rights was to oppose the specific suppression provisions of the Border Force Act. As if they did not know. It is jackboot legislation.

    Not a word of support for the asylum seeker under death threats. Clearly that’s not Labor policy. You attack Abbott, while you adopt his worst policies. What heroes you are.
    If this site is taken over by insular Labor hacks, its function for open discussion is finished. I hope that does not occur.

  338. randalstella

    Kaye Lee,
    You have the contact address.

  339. randalstella

    Thank you Jennifer. (You’d better duck you head.)

  340. randalstella

    Yeh, I saw some of that.
    It was one of the reasons why I persevered.

  341. Kaye Lee

    I am rather disappointed that you feel there is a “pack” at work here. What I see is a group of people who want to contribute towards making things better. You don’t need to belong to a party to comment here but nor should you be excluded if you do. People are throwing round ideas. We don’t all have to agree but the discussion is worthwhile unless it degenerates into trading acerbic barbs.

    (I really have to go pack….the bag variety as opposed to the attack variety)

  342. Jennifer Meyer-Smith


    when referring to ‘the pack’, I respectfully do not include you and most contributors to this site but it doesn’t take a genius to see the ascerbic, personal comments made by some, who are not interested in making positive contributions. They’d rather denigrate others for suggestions they make. When they interact with other specific similar types, then that is the pack to which I refer.

    As a former teacher like me, surely you would recognise the cowardly syndrome?

  343. cornlegend

    Jennifer Meyer-Smith
    as randalstella comments seemed directed more at me, and a lesser degree Kaye Lee,
    could you point out where I was part of a “pack” , attacking you ?

  344. Jennifer Meyer-Smith

    Not you either, cornlegend. You have been graceful in your responses.

    Not knowing your current Labor status, I might have been expecting you to be able to shake this sleeping, complacent Labor Opposition up more than maybe you can.

    If however, you are still closely connected and influential, I would ask you to listen to these constructive criticisms and advocate to Labor wheeler and dealers how they can be seriously implemented into Labor thinking so to bring back the Labor spirit and courage that many here would want to see return.

    This would mean Labor is not frightened to advocate for asylum seekers, whistleblowers representing asylum seekers, better welfare rights for unemployed people etc, and Labor also would not be mediocre in its opposition to outlandish moves by this disgusting LNP Government when it performs one of its Border Force stunts or introduces restrictive and threatening data retention legislation to confine social media’s freedom of speech under the guise of terrorism. Kaye’s list above (somewhere) would be a good start for your Labor colleagues to show some commitment.

  345. Florence nee Fedup

    “Everything of importance needs moral initiative’ Agree completely.

    Would occur if we lived in a perfect world where everyone seen that moral initiative in same light as me.

    Truth is there is no black and white when it comes to morals, like everything in life. Many see as moral the policies this government when it comes their asylum seekers policy. Even see the treatment on the Islands as justified.

    Some actually believe that welfare causes harm to those it sets out to help.

    In fact, we humans can rationalise anything to fit in with our wants.

    It is sad, but one must respect the beliefs and politics of another, Attacking people in this manner leads no way.

    Secret is to have hope that things can be changed, they can be convince what many of us believe is good for them.

    Seems Whitlam did it. Seems neoliberals have been successful up to now.

    No good hitting out of all. Will lead to failure, as one can’t fight on all fronts. Not even armies do this, I believe.

    One chooses the battle they fight carefully. One choose when it is the best time to take fight back. In the meantime, one prepares for battle, working quietly behind the scenes.

    Neoliberalism is one of the biggest political dangers I have seen in my lifetime. It is a fight that spreads across the globe.

    Fight the policies we find disgustable and hateful. Forget left and right.

    Yes, I am a Labor supporter whose first vote was DLP. That doesn’t stop me from supporting policies that other parties put forward if they merit it.

    Will and have supported many Greens efforts. Many of the Independents have good ideas. Even like some of Palmer’s utterances.

    In the past of have like some that has come from Liberals. Sadly that is many moons ago.

    This sounds like lecturing or sermonising. I don’t intend it to be.

    We need to stand together, the only way to win. It will take all the energy we got to get the message across.

    That is how democracy works. We have to be louder and clearer.

    My words are aimed at no one.

  346. Florence nee Fedup

    Thanks. One needs to focus on the battle if one wants to win. Means we have to examine closely our own bias, prejudices. We all have them. I have many.

    As a young person, a woman having baby out of wedlock was deemed immoral by all. Was seen as disgracing her family. The child was labelled and treated as as a bastard. Many living happily in sin, raising good families were terrified of being found out.

    That was the morals of the time.

    I always felt this cruel and the way society treated the mother and child as immoral

    What is moral changes over time.

    Receiving the Old Age pension when it came in was seen as weak and immoral by many. As a child, I still recall the debate that occurred at the time. My mother arranged it for her father behind his back. Not well received. Wouldn’t spend it. Left it in the bank. He had nothing but my mother to care for him. Some still see all on benefits as immoral today.

  347. Florence nee Fedup

    ““Labor could have opposed the legislation that bans all unauthorised information coming from the detention centres.”

    Labor could have wasted their time fighting an unnecessary battle, that is true.

    Labor believes the legislation to be impotent. These people are still protected under other existing laws.

    Time will tell who is correct.

    One could say, Labor has left it to due process and judicial system to sort out.

  348. Miriam Possitani

    It wouldn’t hurt if some were consistent in their argument and not just use every opportunity to slam any Party who is not Green .
    The culprit stated earlier , was a stickler for due process and the upholding of law and order .
    He then for gets this for the next umpteen comments to bag other parties .
    The case being Labor failure to act, to the degree he expects on ” the murder, rape and isolation of refugees on Nauru and Manus”
    Both PNG and Nauru are sovereign nations who uphold the laws of their countries .
    It is within their right to tell other countries to stick their head in their arse when it comes to law enforcement in their countries .
    Now a stickler for the rule of law would have known that {but not much political mileage if you can’t slander the other parties is there ?}
    So that would be “stickler for the rule of law…………..sometimes ?]

    ps, I do notice zero to none attacks on the LNP, why is that ?

  349. Florence nee Fedup

    Miriam good point. Why waste time and effort attacking each other?

    All parties I suspect are like the curate’s egg. Good and bad in parts.

    My problem is, I find little to like in this government. So much so, I want it gone.

  350. Miriam Possitani

    Pardon me for asking but this
    ” a non-partisan review and visit,”, to Manus and Nauru
    What would be the specific aim ?
    If most were politicians , they would not be able to speak out with out Party approval .
    Would Nauru and Manus issue visas ?
    Would the Press ban still be in place ?
    How do you get “non partisan” if most were politicians .

    How about this for an idea .
    We ship all 150 past 2013 election Greens candidates to Nauru and Manus to observe .and report back to the Minister, Dutton and the LNP Cabinet, After all, they make the rules and would need to adopt any reccommendations coming forth .
    Given the Greens run the largest number of candidate in Federal elections {more than Labor, or the Liberals, or Nationals }
    That would mean every electorate in Australia had a pollie {sorry, would be pollie -1 } on a jaunt

    good luck with it .

    I genuinely do want answers as to the aims ,objectives and expected outcomes, if there are any

  351. Jennifer Meyer-Smith

    And I was just starting to feel nice about this particular discussion after FnF’s sensible words earlier! If you genuinely want answers, stop the negative talk.

    Pity you didn’t want the answers earlier before Kaye took off because she was the one to first suggest “a non-partisan” visit to Manus and Nauru, in the spirit of parliamentary responsibility. However, I will attempt to assist.

    I assume the idea is if non-partisan, it would be a good chance for both major parties to fact-collect together in order to assist problem-solving dialogue that could be agreed by both. I wouldn’t anticipate Nauru and Manus refusing visas, would you? Considering Australia is a great source of funding to the local economies! (Trouble is the visits would be forecasted visits and all the nasty stuff that goes on out of the public view, would be swept under the carpet while they’re there, I anticipate.)

    As for your suggestion of all Greens going again, I bet they’re more prepared for the event than most in the major parties have shown themselves to be. You might remember Hanson-Young already went?

  352. Miriam Possitani

    Jennifer Meyer-Smith
    Thats right , Hanson Young went , what was it she achieved again ?
    In the spirit of good will may I put forward a suggestion to assist in this folly .
    I read on another site a while back {by cornlegend , or shouldn’t I mention :that silly little man ” }
    Now I don’t think he wrote in jest, but apparently Scott Morrison LNP and Jason Clare ALP go off on jaunts together, and in fact spent a couple of weeks, some time back trekking PNG
    Not sure when, but according to him {cornlegend} it happened

    Give ’em a call

  353. Jennifer Meyer-Smith

    Are you serious, Miriam? You call that a sensible suggestion considering the seriousness of bringing a just resolution to the crimes against humanity happening on Manus and Nauru?

    And, the only time I would ring Scott Morrison’s office is to condemn him for his human rights abuses in his former role as Minister for Department of Immigration and Border Protection, his abuses while Minister for Social Security and now his incompetence as the Treasurer. If it is true that he and Clare are back trekking buddies, then Clare has gone further down in my estimation.

    Hanson-Young at least made the effort and in her short stay she was able to ascertain, and so were we, that Transfield and Serco both were on edge with her being there thus the allegations of spying on her when in her privacy. If such allegations are credible even with this poor excuse of a MSM, think about the impact of a non-partisan visit from senior parliamentarians!

    But like I said earlier, this was Kaye Lee’s idea, so if it were me, I would definitely want Di Natale, Bandt, Ludlam, and ofcourse Hanson-Young there too plus the sane Independents like Wilkie, Muir, Xenophon and anybody else who can be trusted to think in a balanced, fair, human rights manner.

  354. cornlegend

    Jennifer Meyer-Smith
    The Clare/Morrison thing was right but it isn’t a bad thing .
    It was a few years ago, they live in bordering electorates so they got a group of disadvantaged young people from local high schools {from memory } and took them to walk the Kokoda Track for a week or two and learn the history of that famous landmark .
    BUT, to just touch on Miriams comment , if this thingy is to be ” a non-partisan review and visit,” , surely that would include politicians of ALL political persuasions , or it’s not very non partisan
    You can’t preclude because you don’t like :-] {if that was the case, I’d be sending a Labor delegation} :-}
    I have to say your wish list of “candidates” sounds more a green picnic
    and.. can I smell the seeds of an alliance being fostered there ?

  355. Jennifer Meyer-Smith

    Oh damn cornlegend, you’ve caught me out! Actually, I’m simply filling in a few details that I think Miriam is having trouble with.

    Whatever way it happens, it needs to be a diversely-represented parliamentary venture for fact-collecting in the interests of detainees’ human rights; government and bureaucratic transparency; and accountability to the Australian people. The clear goal must be to find expeditious, effective, ethical solutions to process and settle asylum seekers and refugees so that they do NOT continue to languish in detention. And, I’m NOT saying they should be fobbed off to Cambodia, PNG or another struggling third world country.

  356. cornlegend

    Jennifer Meyer-Smith
    I really do wish a sound reasonable solution could be found but after playing in that playground of politics/unions all my life , I am the eternal pessimist .
    I don’t see a hope of a delegation, let alone an asylum solution anytime soon and that is my political realism .
    I have kids and grandkids and I don”t want to hand this mess, on all things ,not just asylum, onto them
    One of my “adopted kids” today set foot in Cuba where she will be enhancing her skills in medicine with some of the best in the world .
    She worked with them in Sierra Leone {ebola} and then almost immediately went to Nepal to help out there .
    I just wish the world was as safe a place to buzz around as it was when me and the missus were young

    enough waffling :-}

  357. diannaart

    Every time Greens and Labor fail to communicate, the entire LNP high-5 each other – well they would if they knew how to high-5.

  358. Jennifer Meyer-Smith


    Kudos to your “adopted” daughter. We need a world full of people like her.

    If it were possible to get one of your and Kaye Lee’s cross-party/independent delegations organised to do what is right for asylum seekers, Australia’s human rights reputation and the future of our self-respect, I would support it.

    But if both the LIBLAB flipflops prove they can’t measure up to the task, then I’m perfectly happy for an Alliance delegation to go, made up of conscionable parliamentarians whoever they may be.

    I bet there would be numerous Greens and conscionable Independents and Progressives. There might be even 3,4 or 5 Labor people prepared to break ranks. I can imagine there might even be at least one LNP person such as Sharman Stone but then one cannot be sure of the LNP.

    Addendum to diannaart: 🙂 🙂 🙂 and 🙁 for if we don’t get our act

  359. cornlegend

    Jennifer Meyer-Smith

    “If it were possible to get one of your and Kaye Lee’s cross-party/independent delegations organised ”

    hold up, I’ve got nothing to do with that .
    not me , no way

  360. Jennifer Meyer-Smith

    As I remember Kaye Lee first suggested this delegation idea made up of Shorten, Turnbull primarily, and I have attempted in the meantime to value add other credible participants, I automatically thought you wouldn’t mind the elaboration of including you in the brilliant idea. I apologise if my presumption has caused you offence!

    Therefore, we’ll have to settle for my interpretation of a proper delegation and that is the Greens, some sane and brave Labor people, some sane Independents, conscionable and energetic Progressives and maybe even a LNP person who still retains a conscience.

  361. cornlegend

    Jennifer Meyer-Smith
    I wish them luck with it but don’t see much hope .
    I find it better to not get involved on online stuff anymore, just drop in for a day or two every few months to check out the goings on ..
    Things have to be much more black and white now it seems .
    Better to leave it to others as I don’t feel we left them much of a start .
    I much more now prefer to do as I please, nick up to Question Time pretty often , see old mates and let the world roll on and stay involved in my own way .
    I think this little spell on the AIMN has been the first for a few months although I’ve drifted in for years

  362. Jennifer Meyer-Smith

    Everything counts, cornlegend!

    If you can put a few correct, well-guided words into the correct ear of a receptive participant at the opportune time, then I ask you to advocate what is being offered as constructive criticism on this site.

    Remember, everything counts!

  363. Jennifer Meyer-Smith

    Thanks cornlegend,

    I had a good read about Francesca’s emergency volunteer work during the Ebola epidemic in Sierra Leone and the earthquakes in Nepal. I admire her and anyone like her, who put their own lives on the line for desperate people in other places. I learnt also that she holds the Cuban emergency response teams high because they were committed for the long haul to combating Ebola.

    I was also reminded about the political and financial manipulations that scumbags associated with the LNP use to profit from the desperation of others. Thanks for reminding me about how Aspen Medical appears to have profited by $100 million for treating only 200 people when logically one would think that number should have been 10,000 people or more.

    If I had a magic wand, I would be sending a bill to Bruce Armstrong, the CEO of Aspen Medical Pty Ltd for over-payment of funds intended to help multitudes of Ebola sufferers. When the over-payment was returned, it could then be re-funded to actual Ebola sufferers or for the re-building of Nepal after the earthquake destruction.

  364. diannaart

    Further evidence economic-rationalism is truly stuffed:

    Aspen Medical appears to have profited by $100 million for treating only 200 people when logically one would think that number should have been 10,000 people or more.

  365. achu4112

    Yes diannaart, well and truly rogered.

    It’s encumbent on us* to reclaim the meaning of ‘economic rationalism’ ie to value everyone’s quality of life, and that which supports life.

    [* us: those who’d like humans to survive long term, in a ‘world’ where life is such that everyone would choose to continue living]

  366. diannaart

    You may be interested to read the following:

    Founded in 2003 to provide global diversified healthcare services, Aspen Medical is now a beacon for what private and family owned businesses can achieve, and was recognised at the BRW and PwC Private Clients Aspire Awards held in Sydney last night, winning the award for Private Business Growth and Transformation for organisations with revenues of $100 million plus.

    The Aspire Awards showcase the innovation and transformative entrepreneurialism of Australia’s legion of private and family businesses.

    I guess this is what Turnbull meant by “innovation”.

    Nice to see the “family businesses” get a mention. In fact, I’d say “private and family business” is the new, upgraded to 4 words, slogan for 2016.

    The LNP – stands for Capitalism and cutesy sound bites that appear to include actual people.

  367. Miriam Possitani

    Jennifer Meyer-Smith
    Now see, there are some things we agree on .
    Francesca is one brave young woman and I did write on that site 3 months ago
    “Some people do make you so proud of the human race and give us the ability to point to that person and say, there is a role model for all of us even though I doubt I would have the courage .
    Francesca, you make me proud to wave the Southern Cross, and Bighead you too for publishing articles that show the good in the human spirit”

    On further reading of other articles it appears the one and the same Cornlegend as above is one of her major sponsors though he has never acknowledged it

  368. Jennifer Meyer-Smith

    Yes Miriam,

    I noticed your comment after the article.

    It doesn’t surprise me we have things in common. We want the LNP to be annihilated. We want Labor to do Australia proud. We just differ on how the latter can be achieved.

    Working together through smart negotiation and respect between the reforming parties and Independents for combined, proportional political benefit will achieve both outcomes.

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