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Good and Bad Debt from Dumb and Dumber

Finally something of interest came forth from the mouths of our good Prime Minister and Treasurer this week.  They began talking about good and bad debt. It sounded a bit like funny money, at first, coming as it did from two staunch economic conservatives who hate debt of any kind while having little understanding of it.

What they were trying to tell us, albeit quite badly, is that they see no way out of the debt (so called) spiral they have been taking us and want to redefine it in such a way that shelters them from the harsh realities of their own incompetence.

They have looked into the crystal ball, sought to find a way out of the mangled economic mess they have created and save some of what they think, is their credibility. In doing so, they have exposed their ineptitude even further.

As a former banker, Malcolm Turnbull would make a good janitor. As a former tourism director, Scott Morrison would make a good cleaner. Neither indicates that they have the slightest idea how money works.

This latest move on trying to explain the difference between good debt and bad debt is like a parent explaining to their five-year-old why they have a mortgage. The detail is right, so is the reasoning.

The problem is that the parents forget the number of times they told the child that money doesn’t grow on trees and how some things are not affordable. The result is an utterly confused child who thinks it’s all too hard and goes outside to play. And anyway, didn’t money come from daddy’s bank and mummy just kept it in her purse?

If ever we had proof of the level of incompetence Turnbull and Morrison have sunk to, Thursday’s announcement delivered it.

“It can be very wise for governments to borrow, especially while rates are low, to lock in longer term financing and invest in major growth producing infrastructure assets, such as transport or energy infrastructure,” Mr Morrison said.

Has it really taken them over four years in government to realise that? Where was this sort of thinking when they were crucifying Labor over the cost of the NBN? Where was this sort of thinking when Joe Hockey boasted he would return the budget to surplus in their first year? And how’s that working for them these days?

If yesterday’s announcement had come from Bill Shorten, just imagine the outcry from the unadventurous, mean-spirited, let’s screw the little guy to help our rich friends, conservative camp. How quickly would they have warned the nation against the reckless, high-spending, debt laden foolishness that we have come to expect from Labor governments. But there’s more….

“But to rack up government debt to pay for welfare payments and other everyday expenses, is not a good idea,” Morrison continued.

No, it’s not. So why don’t they do something about unemployment beyond talking about it? Why not put welfare recipients’ to work with a job guarantee? Why not demonstrate, in practical terms, how utilising idle resources (the unemployed and underemployed), by creating value-adding projects, can stimulate an economy and benefit the nation as a whole?

If last Thursday’s announcement about “investing in major growth producing infrastructure”, was a genuine mea-culpa from this mindless duo, one could be a little magnanimous and say better late than never. But that’s not their plan or their vision.

Like everything else they do, it’s all just cheap politicking. Their inability to articulate a sound platform for arresting the housing spiral has run its course and now they are trying something else. It sounds suspiciously like the budget numbers are revealing a bigger deficit than projected in the forward estimates and this has to be explained somehow.

So, without admitting their inability to stop the debt spiral (so called), they have decided to redefine debt. Their jealousy over state governments’ taking the credit for infrastructure projects financed with federal money is their first target. They want some (perhaps all) of the credit.

What hypocrisy! After spending the last four years flogging off anything that moved, these princes of privatisation want some equity in infrastructure. They now want to own stuff. Really? What brought about this 180 degree shift in thinking?

It’s the fear that the upcoming fiscal statement (the budget), will expose them as failures. They have looked into the crystal ball and seen their legacies trashed. They have decided to embrace debt rather than demonise it.

Well, that’s fine. Better late than never, but they still don’t understand it. They still think it has to be repaid. They still think money they create has to be repaid to someone. They still have such a long, long way to go and they will never get there until they understand the power of a sovereign currency issuer. They probably never will.

 

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74 comments

  1. Freethinker

    Perhaps they are preparing the ground to justifying borrow money to lend it to Adani?
    Money for the expansion of the Snowy Mountains system?
    Anything it is possible but for sure the big proportion of that borrowed money will be finish in the pockets of few.

  2. stephentardrew

    Great post John thanks.

  3. Andreas Bimba

    Labor are not blameless. During the GFC Rudd and Swan did the right thing and ran a sizable budget deficit so as to stimulate a vulnerable economy however for their next budget they cut federal government spending way too fast which slowed the economy and substantially decreased taxation revenue and increased social support costs which actually resulted in an enlarged deficit down the track when those clowns Abbott and Hockey took over after the election. Even more spending cuts by Abbott and Hockey actually worsened the deficit due to the suppression of economic activity.

    At least Turnbull and Morrison now no longer appear to be so obsessed about attaining a balanced budget probably due to the Senate blocking more damaging cuts.

    As John well knows, we could instead have full employment and a healthy economy if our hopeless governments realised that substantial ongoing federal government deficits are nearly always beneficial and not something just for emergencies. For a currency issuing government like our federal government, no debt need be incurred and inflation is likely to be negligible provided real resource limits are not exceeded.

  4. diannaart

    John

    Dumb and dumber have hardly reached any type of fiscal epiphany, they sound more like they have found a grail full of Trumpisms. Such as, “I didn’t think it would be this complicated”.

    While they may appear to be on a road to enlightenment, I believe they have already wandered off the path, with Morrison’s concerns that Centrelink is an example of “bad” debt.

  5. Harquebus

    More rubbish from John Kelly. He, along with most, will just have to learn the hard way.
    Producing an infrastructure maintenance legacy in the face of diminishing energy returns is not good anything.

    “The world is full of so-called economists who in turn are full of schemes for getting something for nothing.” — Satyajit Das

    Cheers.

  6. Kronomex

    Mal Feasance showing Scumbagorrison the selfie of himself going back after the media had left to get the five dollars he “gave” to the man on the pavement. He actually thought I was going to let him keep it, and laughs were had by both men.

    Debt is debt no matter how you put spin on it. Yet another sign of desperation from the “adults” in Canberra.

  7. Freethinker

    Harquebus , with respects, with not intention to insult, I just wonder why you are here, why you being so out of place with the authors and fellow bloggers and participate in this site?
    What you are getting out of it?
    I am flabbergasted

  8. Alan Luchetti

    Yes. A really good post. Unlike some others who savage the Libs for not meeting their own budget balancing standards, thereby endorsing those stupid standards.

  9. Alan Luchetti

    Harquebus, that was a Henry Hazlitt quote. And he is an idiot.

  10. Tresca Cullen

    They’re just doing their usual ‘mansplainin’ to us poor ignorant, uneducated, smelly masses. Poor us, we just don’t understand how hard they’re working to help us.

  11. Halfbreeder

    great post john. just like to add that the terrorisation of the australian public with fears of debt and destitution by LNP for the last 4 years has only arisen because of an accountancy or book keeping methodolgy that has been nothing more than a ruse. That’s also what costello did when the Howard gov was elected..an accountancy ruse where costello credited only nine months of the financial year to the gov accounts but debited a full 12 months of expenditure against those credits creating an oestensible budget deficit. costello did this by bringing forward the budget date. That’s just a sick ruse. Further, if the debt is greatly reduced it would mean that if the corporate tax cuts were reversed the national
    budget would in fact be about $23 billion in surplus. What’s appalliing is that these scumbags have instilled fear, created stress and inflicted hardship on many australians simply by use of an accountancy methodology and that is sick. Since when do bean counters, book keepers and accountans run economies and nations. The LNP are just immoral incompetent dishonest trash. In the case of their sick budgetary strategy over the last 4 years, i dont see why they aren’t considered to be terrorists as well.

  12. Harquebus

    Alan Luchetti
    Thank you for that correction. I will follow that up. Satyajit Das, who I got the quote from however, is not an idiot.

    Freethinker
    I would be wasting my time preaching to the converted. They already agree with me.
    What do I get out of it? Nothing so far. Why do I do it? Because I do not want to perish in a desolate landscape that was of our own making.
    Cheers.

  13. Cheryl Garner

    To balance the books of a country, incomings (income tax & value of exports) must be more than outgoings (domestic expenditure & value of imports)! When we give our natural resources such as coal and gas away virtually for free and allow multinationals to rape us of income tax owed, we can’t balance the books!

  14. Royce Arriso

    Spot on, John.
    Gobsmacked to see the deceit and confusion which surfaces in this govt and which displays not the very first grasp of macroeconomic realities. However, have come to be convinced that the so-called ‘household analogy’ is not merely a preferred model of operation. It is in fact Neoliberalism’s lynch-pin whopper, upon which a host of lesser whoppers depend.
    And that Turnbull and co are only too aware of how effectively its prosecution results in wealth transfer, widening inequities and most of all, the deliberate creation of a US-style ‘working poor’.

  15. @RosemaryJ36

    Harquebus: Being rude makes you no converts and you are clearly out of step with the majority of contributors and readers on this site. You not only are not preaching to the converted but you are contributing little of value here so why subscribe?

  16. Vikingduk

    Yeah, Harquebus, you, too, can be part of the echo chamber. Simply read thru comments, look at what is trending and keep your comments within this framework. As you well know, dissenting opinions aren’t welcome by some. Communication can be a discussion of opposing opinions conducted in a civil manner or it can be an opportunity to verbally/physically bash each other.

    Prost.

  17. Henry Rodrigues

    Please excuse my loud language, these two bastards are the biggest and most unrepentant hypocrites this country has ever seen. They are stealing Labor’s ideas after abusing them for years, aided and abetted by the mainstream media. Hope to they rot in hell for their lies, mismanagement, and cruelty to the less fortunate in our great country. Especially the smarmy wanker from Wentworth, dressed up in his black leather jacket, taking selfies on suburban trains.

  18. Harquebus

    @RosemaryJ36
    Not only do I not want to perish in a desolate landscape of our own making, I do not want to see you and others do the same.
    John Kelly is yet another fool who is contributing to this outcome. What value is there in that?
    I like my 21st century living and hope to salvage something of it.
    Cheers.

  19. Michael Taylor

    John, me thinks it’s going to be a very hard budget to sell. But not worry, the Murdoch media has already written how great it is.

  20. Michael Taylor

    Not only do I not want to perish in a desolate landscape of our own making, I do not want to see you and others do the same.
    John Kelly is yet another fool who is contributing to this outcome.

    Harquebus, what an absolutely ridiculous statement. It surely ranks high among the most pointless comment ever published on this site.

    How on earth can anybody – who expects to be taken seriously – possibly blame John for what is happening to this planet?

    To use your own word, you are a “fool” if you believe that.

  21. Halfbreeder

    the new budgetary strategy and methology adopted by LNP shows that the debt issue has been fabricated and fake news for four years. the government is the ultimate purveyor and source of fake news and opponents of gov have adopted the fake news approach to counter the false claims and lies of gov…fighting fire with fire.

  22. John Kelly

    Harquebus, as I have told you many times before, I lament what is happening to our planet, I lament we don’t have the leadership to do something about it. If I was to write about it as passionately as you, I might sleep more soundly but I doubt I would change anything. So, I work to change what I think I can, in unison with likeminded souls who, with a broader vision of the future, happily acknowledge that we must crawl before we walk and walk before we run. I did not vote for the conservatives who happily continue to encourage raping the planet. I voted for action on climate change, for full employment, for universal free health and free education, all of which, in the long term, will give us the leadership to address the needs of the future of the planet. So tell me, what are you doing beyond slinging personal abuse at someone who actually agrees with you, but like you, feels powerless to achieve a better outcome?

  23. Kaye Lee

    “Communication can be a discussion of opposing opinions conducted in a civil manner or it can be an opportunity to verbally/physically bash each other.”

    “More rubbish from John Kelly.”

    “John Kelly is yet another fool who is contributing to this outcome.”

    Easy to see which option Harquebus prefers.

  24. Freethinker

    Just to see his verbal abuse to others and the arrogance in which he have reply to my questions it is enough to stop debating with him.
    IMHO it will be no constructive to continuing replaying to his posts.

  25. Harquebus

    John Kelly
    You might lament what is happening to our planet but, you do nothing about it except promote more of the same of that which has got us into this predicament.

    “I voted for action on climate change, for full employment, for universal free health and free education”
    There isn’t going to be full employment and it just so happens, high unemployment is something that is required. Universal free health and education are not going to happen unless, our course is reversed, not just changed.
    Did you vote for economic contraction, reduction in consumption, population reduction, a moratorium on energy guzzling infrastructure? Do you even advocate the same. No. Therefore, you have done nothing to reverse the things that are causing our own destruction.

    What am doing? Reducing my consumption, repairing, reusing and improvising instead of discarding. I am developing a no dig garden without the use of pesticides and fertilizers. I regularly contact politicians, journalists and as many others as I can advocating degrowth and conservation, without any success I might add. Current events and circumstances are evidence of that.

    It is the likes of you that promote unsustainable solutions that are hindering the likes of me.

    Michael Taylor.
    As much as I respect you, you also are part of the problem.

    Freethinker
    You are another who will just have to learn the hard way. A pity. I did try.

    Cheers.

  26. Kaye Lee

    Fook you’re annoying.

  27. Harquebus

    Kaye Lee
    What did you think of that video that I recommended for you? Did you learn anything?

    John Kelly
    You might get something out of it.
    Dr Albert Bartlett: Arithmetic, Population and Energy
    https://www.youtube.com/watch?v=e_VpyoAXpA8

    Silkworm
    Nasty is coming. We ain’t seen nuttin’ yet.
    An angry mob is one thing, a hungry mob is a completely different animal.
    Re: Venezuela.

    Cheers.

  28. silkworm

    “It is the likes of you…”

    Nasty.

  29. Michael Taylor

    Aah yes. John and I are conspiring to bring down the planet, to destroy humanity and the environment, and to bring on another depression.

    Who wants to join us? Anybody?

    The damage John and I have already done is immeasurable. We just need a few more people and we can push the planet over the edge.

    Right-wing governments around the world adore us. We inspire them. Have we inspired you too?

  30. helvityni

    I’m giving up. When I called for civility, another blogger told me to take my pleads for civility where the sun does not shine… Another poster told me to learn the art of sledging…

    Taking down tall poppies is loved by many Aussies, so is needling, putdowns, bullying… People coming from other cultures find it hard to get used to. It’s sometimes playful, but more often very hurtful.

    Disagree with someone’s opinions, but do not start name-calling, or dishing personal abuse…

  31. Halfbreeder

    harquebis. u say high unemployment is required but dont say why. is it to contain inflation or curtail environmentally unsustainable growth? If th former, then why can’t targetted taxation be used to contain inflation as proposed by modern monetary theorists? Further, who is to decide who gets a job with a livable income and who is compelled to live below the poverty line on the measly dole? Who will play god or, in this case, who plays the goaler imposing poverty on those unfortunate enough to be chosen to be unemployed?

  32. Kaye Lee

    You are right helvetyni. I apologise for my outburst. But I don’t think John’s intentions should be so completely misrepresented.

  33. Halfbreeder

    hey if john and michael are conspiring can i join in?

  34. Harquebus

    Halfbreeder
    “curtain environmentally unsustainable growth”
    Some good questions.
    Equally distributed rations and quotas is one thing that I advocate. Work might be shared however, most will just have to sit on their arses until populations are radically reduced.
    The unemployed, by consuming the least, are actually are doing the most good.

    helvityni
    Thank you for your insight. Sometimes my anger gets the better of me.

    “Using his burgeoning intelligence, this most successful of all mammals has exploited the environment to produce food for an ever increasing population. Instead of controlling the environment for the benefit of the population, perhaps it’s time we controlled the population to allow the survival of the environment.” — David Attenborough

    I have to go but, I will be back.

    Cheers.

  35. Michael Taylor

    Feel free to join us, Halfbreeder. 😀

  36. helvityni

    Kaye, I wasn’t referring to you, I saw your post after I had sent mine… 🙂

    And my two examples were from other sites….but of course it’s happening here too.

  37. Halfbreeder

    controlling the population is repulsive to most religions. catholics and islamics oppose contraception and when China introduced the one child policy they’re accused of being human rights abusers. i agree there are to many humans on the planet but controlling the population is not easy unless you weaken the power of religion…that’s even harder given the grip it has on people’s minds and hearts and its historical prominence. even the after the fall of the athiest USSR the crosses came out after nearly 100 yrs. Unless u envisage a method of population control besides contraception???

  38. Michael Taylor

    We’re doing what we can to stamp it out, helvityni. One of the offenders is now in moderation. If his purpose here is to do nothing but snipe at you, then he’s not welcome.

  39. Halfbreeder

    count me in michael and john…shite i guess it cant be a conspiracy anymore because the secrecy has been lost…the cats out of the bag..

  40. RonaldR

    THE ONLY ‘GOOD’ DEBT IS TO A NATIONAL BANK
    Only a new Commonwealth National Credit Bank will achieve the objective of differentiating between “good debt” and “bad debt” that Federal Treasurer Scott Morrison announced yesterday for the upcoming Budget. The CEC explains its proposal for a national credit bank in its new brochure “Australia sleepwalking to economic Armageddon”.
    Morrison said: “It can be very wise for Governments to borrow, especially while rates are low, to lock in longer term financing and invest in major growth producing infrastructure assets, such as transport or energy infrastructure. But to rack up government debt to pay for welfare payments and other everyday expenses, is not a good idea. This is a critical part of ensuring that Government lives within its means.
    “In this Budget we will be making changes to the way we report Government debt and link it to Government spending, by increasing the visibility on good and bad debt.
    “These changes will make clearer the share of expenditure that is contributing to investment that increases productive capacity and produces future income and the debt that is being incurred to deal with everyday expenditure.”
    Simply changing the way the debt is reported will not solve Australia’s economic crisis. Infrastructure should be financed by a separate institution, rather than from the government’s consolidated revenue or normal borrowing. The institution the government should use is a national bank: a government bank legislated to direct public credit to new rail and road projects, dams, hydro and nuclear power plants, and other nation-building programs. The economic growth those projects drive will generate revenue that can be lent out to new projects over time. The enormous scale of work to be done will create hundreds of thousands of jobs that will quickly reduce the portion of the budget spent on welfare payments, freeing up that revenue for “other everyday expenses”.
    Such a national credit bank should be established in conjunction with a Glass-Steagall separation of the private banking system, so that commercial banks with deposits that serve the real economy are split off from any and all forms of financial speculation. This will ensure that as the credit from the national bank flows through the financial system it is only used for productive purposes, and not diverted into financial gambling.
    Don’t sit back and expect someone else “more qualified” or “more responsible” to act. If you want these solutions in place, take leadership. Join the CEC in this campaign:
    • Order a free copy of “Australia sleepwalking to economic Armageddon”, or multiple copies of the brochure to share with your family and friends http://cecaust.com.au/main.asp?id=Economic_Armegeddon.html

    • Join the CEC as a member
    • Sign the change.org petition: Break up the big banks now—pass Glass-Steagall! https://www.change.org/p/break-up-the-big-banks-now-pass-glass-steagall
    http://www.cecaust.com.au

  41. Vikingduk

    Yep, Kaye Lee, underserved harsh words from the Harquebus, did you think I was supporting those sentiments? I wonder, as does Helvityni, why, so often we resort to insults?

    Nevertheless, this morning, as most mornings, we (faithful wife, faithful hound and me) walked along the beach, watched the sun rise and we all agreed aren’t we fortunate, aren’t we lucky, how good is this,
    bloody beautiful. Even as we picked up the rubbish, the plastic, the detritus of a f*cked society.

    Whales be back soon, those glorious creatures living, playing in this glorious ocean on this glorious planet. Did you know, whilst waiting for the next wave, they come so close sometimes we hear their communication, fortunately, perhaps, they can’t hear what passes for communication from us humans.

    Happy Sunday all, maybe go outside, maybe think how fortunate am I. Or not.

  42. Freethinker

    Vikingduk, the simple things in life are the most beautiful and the most ignored or taken by granted by many.
    Every time that I take my camera for nature photography my soul is recharged.
    Have a wonderful Sunday you as well.

  43. silkworm

    Nuclear power plants? Forget it. It’s never going to happen in Australia.

  44. Terry2

    The reason why debt is to divided into two areas of good and bad is a smoke & mirrors trick to take our eyes off what has occurred under Morrisons’ watch. In March gross debt added for the month was $18.7 billion, the highest monthly increment in Australia’s history.

    The Office of Financial Management released figures showing that gross borrowings at $484.6 billion. Of this, $58 billion is residue from the Howard government or its predecessors. Labor increased it by $212 billion. Another $214.6 billion has been added by the coalition since the 2013 election.

    Hence the Coalition has now more than doubled Labor’s gross debt. It doubled Labor’s net debt in January.

  45. diannaart

    John Kelly is yet another fool who is contributing to this outcome.

    How on earth can anybody – who expects to be taken seriously – possibly blame John for what is happening to this planet?

    Michael Taylor.
    As much as I respect you, you also are part of the problem.

    Freethinker
    You are another who will just have to learn the hard way. A pity. I did try…. ad nauseam

    If 97% of AIMers agree, then who has the biggest problem? Harquebus or everyone else?

  46. Vikingduk

    Thank you, Freethinker, a beautiful life to you as well. There are a pair of sea eagles nesting high on the point, their grace and mastery of flight fills me with awe. A little diversion from topic once more. Debt and deficits, yep, not good, but aren’t these worries being monstered by climate change? Off topic, blah blah blah, someone bound to let me know. Guten tag, y’all, it’s a beautiful life, get out get into it.

  47. king1394

    Re “good and bad debt: who decides which is which. Morrison makes it fairly clear that it would be bad to borrow to support human needs by providing social security – that could be better seen as a good. Improving human lives and investing in their potential to do meaningful activities such as self-education, family caring, and volunteering in the community. Bad to invest in more infrastructure such as multi-story car parks, inner city freeways, coal mines and other capital works that they will then flog off to their mates.

  48. Kaye Lee

    Vikingduk,

    I am blessed to live in a beautiful place where I can see sea eagles and whales from my verandah. I have just been sitting out there. It is important to keep up with current affairs but it is also necessary to regain perspective on just how good life is 🙂

  49. havanaliedown

    “Disagree with someone’s opinions, but do not start name-calling, or dishing personal abuse…”

    But by all means question their gender – apparently

  50. Freethinker

    diannaart, what you mean by saying, quote: You are another who will just have to learn the hard way. A pity. I did try…. ad nauseam ?

    In my 71 years of life chances are that I have been trough more hardship and experienced more that the average person and perhaps you.
    I am disappointed that you have made that comments if I have interpreted it correctly.
    Of course I have a lot more to learn and I bet that I will run short of time to learn all the things that I would like to know but in many issues I can telling you that I am not an ignorant, just see life in a different way than you.
    Can you elaborate a bit more or clarify you comment if I have interpreted it in the wrong way

  51. Michael Taylor

    It is the simple things of life that give me the greatest pleasure. Watching kittens play. Staring at the log fire. Enjoying a colourful sunset. Counting money.

  52. Michael Taylor

    If 97% of AIMers agree, then who has the biggest problem? Harquebus or everyone else?

    diannaart, you give Harquebus too much credit. I’d say it’s more like 99.7%.

  53. babyjewels10

    Can you believe it? Here we have a government that calls investing in its people and it’s universities, “bad debt.”

  54. totaram

    babyjewels10: Spot on!
    But investing is not what it is all about. Investing in what can be sold off to their donors – that is the investment for which you can incur “good debt”. Of course, the NBN didn’t fit in there because it was Labor’s idea, and they needed to show how bad it was, and they hadn’t yet thought up this idea of good debt and bad debt.

    Now, you can’t sell the Uni education and school education and health of your population, so it’s a bad debt. But if you could sell the hospitals, the health system, the Unis and the schools, that would be wonderful, so you get rid of the expenses and “retire” the bad debt by selling off those very things which are causing more bad debt. See? It’s all very simple if you know how!

    I’m sure there is already an article in “the Australian” explaining all this to an adoring readership, so they will lap up the details when they are presented shortly by ScoMo in the fiscal projections (aka “budget”).

  55. helvityni

    babyjewels10, I believe the uni fees are going up again.

    Finland, Norway, Iceland and Germany do not collect tuition fees from their nationals. The Nordic higher education systems are almost entirely publicly funded to support students from lower socio-economic groups to enter universities.

    I believe foreign students now pay for their tuition.

    Living away from home you end up paying for your accommodation, but at least in my time we got low interest government loans, you were able to pay back pretty soon when working. Three month summer holiday also gives the students a chance to earn some money.

  56. Jennifer Meyer-Smith

    I like reading John Kelly’s articles on MMT because they inform us on how the economy works and open up great discussion from other commenters. I even have a theory that the likes of Morrisscum and Turnbullshit are reading our discussions and others because why else the change in language being used from ‘all debt is bad’ to ‘good and bad debt definitions’?

    Even though there is no ‘bad’ government debt in a sovereign currency such as Australia’s, like king1394 stated, I would interpret good purposes for debt to include services, support systems and infrastructures that help people help the community. These include education, health, welfare safety nets, public transport and efficient communication services.

    ………………………………………………………………..

    Thanks Vikingduk, for your poetic and soothing observations.

  57. Kaye Lee

    Freethinker, diannaart was quoting Harquebus.

  58. Freethinker

    Thank you Kaye for your post and sorry Dianna for my interpretation, my “spanglish” some time let me down.
    Perhaps I suffer mix of the effects of an old Latino with hot blood that start become grumpy?
    I was thinking that she put me is the same category of the “other”fellow blogger.

  59. diannaart

    Freethinker

    I always read your comments – I cannot say this for everyone. This is my greatest compliment BTW.

  60. diannaart

    Michael Taylor April 30, 2017 at 1:26 pm

    If 97% of AIMers agree, then who has the biggest problem? Harquebus or everyone else?

    diannaart, you give Harquebus too much credit. I’d say it’s more like 99.7%.

    Two reasons for rating, Michael

    1. Playing on 97% consensus of climate scientists.

    2. I believe H enjoys playing the maverick.

  61. Freethinker

    Thank you diannaart for your kind comment, I appreciate it.
    I also read your posts with interest.

  62. Vikingduk

    A pleasure to provide a distraction. Like Kaye Lee, we can watch whales from our veranda, occurring to me this morning that I was taking this great gift of here and now, this beautiful life for granted. So, a little reminder to me that I chose to share. May we all have those joys and sadnesses of life and may we be forever grateful for this here and now, this life.

    Thank you, you tireless writers of AIMN, may your endeavours make a difference. And, of course the commentators, after all every artistic pursuit needs an engaged and interested audience.

    Near time for us, dear Ruby the hound wants walk, chance that the eagles will be up looking for dinner. Rare and tremendous sight watching as one descends rapidly to catch the luckless fish, flying off with dinner gripped tightly in claws.

  63. Jai Ritter

    Can anyone really take harquebus seriously? A few weeks back he said there was nothing wrong with the copper wiring in Australia. Just a troll, and a poor one at that.

  64. halfbreeder

    Re: MMT. Here’s a great article by MIchael Hudson that explains a lot about the current global situation and the notion of debt in the context of USA dominated IMF. Example, it seems Ukraine owes Russia $3 bill and refuses to pay etc with the support of the US..

    http://www.counterpunch.org/2015/12/18/the-imf-changes-its-rules-to-isolate-china-and-russia/

    In one paragraph Hudson says the IMF seeks to retrict governments dealing in their sovereign currencies. (Obviously to encourage dealings in US dollars). But I have been unable to find any legal restrictions on the Australian Gov issuing debt or making loans etc in Australian dollars or issuing as much Australian dollars as it choses to. I have been able to find a provision in the Reserve Bank Act which says that the Reserve Bank has exclusive right to issue ‘notes and bills’. I have been unable to find any case law that includes ‘digital cash’ in the definition of ‘notes and bills’ in the Reserve Bank Act. I understand that it was only a recent occurrence that the Federal Treasury stopped issuing Australian dollars themselves and restricted its distribution of Australian dollars through the Reserve Bank. I have also found some commentary that stated the power of the Federal Treasury to release Australian dollars directly has not been revoked or cancelled and that the policy of restricting the spending of Australian dollars by the Australian gov to the level of the tax take is ‘voluntary’, Given this situation, I can only conclude that the only legal obstacle to the Australian government producing and releasing as much sovereign currency as it needs, rather than restricting its sovereign currency release to the value of its tax take, is some agreement under the IMF or World Bank. I know the IMF ‘expects’ balanced budgets.

    Can anyone inform me of any legal provision or legal agreement or legal arrangement that binds the Australian government to only generating and distributing Australian dollars in an amount equivalent to the tax take? I am not interested HERE in economic facts or economic practice but only legal arrangements for the moment. I may be looking to do some in depth legal research into this soon. Thanks.

  65. Möbius Ecko

    What do I hear this morning? Chris Richardson from Deloitte saying the debt was actually $6 billion worse over the next four years than the government figures to come out in the budget, and if the government doesn’t rein in spending it will have to increase taxes otherwise its debt will become entrenched.

    This debt is a bad thing because it would be like NEVER PAYING OFF A CREDIT CARD.

    Richardson is an economist who does wide and frequent media appearances.

  66. Freethinker

    Well, they believe that one of the ways to achieve “jobs and growth” is to reduce taxes to the business so the only thing left is increase income taxes.
    This is not looking good.

  67. Bruce

    The idea of good and bad debt sits nicely with the concept of core and non-core promises…

  68. Harquebus

    I am in the minority with my views and opinions. Looking at the results delivered so far by the foolish majority, I do not think that my critics have much credibility.

    Jai Ritter
    My copper phone line is over 60 years old and still works fine.
    Your qualifications are?

    Cheers.

  69. Halfbreeder

    Mobius Ecko. how can a gov that has power and authority to generate its own legal tender currency be in continuous ongoing debt if the loans it needs to pay off are to be repaid in the currency that only it can produce? Theoretically, it can generate the amounts it needs to pay off any debts in its own currency at anytime. Hence, how does that equate to endlessly paying off a credit card? These neo liberal economists, trained in the now discreditted Freidmanist/von Hayek supply side theories, like to use the household and businesses as analogies for national economies but that is a fallacy as nations are sovereign over their own currency and have a monopoly over the generation and distribution of legal tender currency in their nation while businesses and households can’t produce their own legal tender currency. The whole idea of equating households and businesses with national economies is a myth designed to fabricate a ‘debt’, to force privatisations of public assets at bargain basement prices, lower corporate taxes under the false justification that they produce jobs and wealth via investment and to impose austerity on the population to enslave them to endless work and get rid off socially beneficial programms. This has all been made possible by Freidmann’s discredited theories adopted in the USA and propagated globally by the IMF. So could you please explain how national debt is like endlessly paying off a credit card?

  70. totaram

    Half breeder: Unfortunately, the media are responsible for this propaganda, so it is not ME’s fault if he swallows what he hears. Chris Richardson is a typical neoliberal economist, who is trotted out by the media every now and then to give his opinion on everything. This is how the entire population of this country is bamboozled into thinking that the federal govt. is like a household, with credit card etc. The media don’t even go to the Uni’s to talk to economists who might have a different take. It’s all stage managed. As long as you understand that the govt. issues its own credit card, you are free of misconceptions. Rejoice in your freedom.

  71. Halfbreeder

    totarum. until governments relinquish the policy that spending must equal the tax take and anything spent above the tax take is debt, none of us are free. in the meantime i will rejoice in things other than freedom.

  72. Halfbreeder

    update on welfare card. As of 2 May 2017 Stargroup the multinational corporation with gambling interests has now completed the purchase of 100 % of Indue the australian company to whom the LNP granted contracts for the management of the anti – gambling welfare card. Indue aka Stargroup will now be paid $10K per participant in the card programm that it is free to use to expand its gambling interests in Aust and elsewhere. Before the last election Turnbull stated in interview with the Wall Street Journal that the welfare payment and medicare payment systems would be privatised. The welfare card is how it is happening. Soon all australians will be on the welfare card, pensioners, family tax benefit recipients, farmers on farm relief, any one who receives a payment from the gov.
    https://www.businessnews.com.au/article/Stargroup-raises-335m-to-complete-Indue-acquisition

  73. Pingback: Good and Bad Debt from Dumb and Dumber | THE VIEW FROM MY GARDEN

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