Cormann was once a little Focker
There was an article in The Sydney Morning Herald and The Age today with the heading, “Govt to tackle head on claims it is unfair and say borrowing against our kids is the most unfair act of all”, by Latika Bourke.
Whoever came up with that headline needs fatigue counselling, but putting that to one side, it is the content that, if accurate, displays an incompetence within the ranks of government thinking, which is simply mind-boggling.
For a start, “borrowing” against our kids is what successive Australian governments have been doing for 100 years. It has made us what we are today. How is that unfair? We allow them to attend the schools and universities that were built. We allow them to use our hospitals. We let them travel on our trains, buses and trams, all of which were built for us as well as provide a future that would prepare them to become productive members of society. How is that unfair?
Does Mathias Cormann think that his generation paid for all of today’s infrastructure? When he says, “No parent would keep putting a chunk of their grocery bill on to their credit card every week through their whole life and ask their kids to pay it off after they go,” what does he think he has been doing most of his adult life?
Of course we ask our kids to pay some of it off, but not until the little Focker’s have left home, got an education and a job and taken over from us as we start to retire. What sort of fantasy land does our finance minister live in?
Does he not realise that he is paying now for things his parents helped provide for him? Does he think it all came off their credit card? That is how government works. We build stuff, we create stuff that we expect will last a couple of generations before it needs to be updated or replaced. When it does, that generation replaces it and successive generations thereafter help pay it off.
A handful of examples spring to mind: the Snowy Mountains Hydroelectric Authority, the Sydney Harbour Bridge, the Melbourne Underground Rail Loop, the Australian Submarine Corporation, the Commonwealth Bank, the Ord River Project, the Melbourne/Sydney/Brisbane Rail line and so on. Does the minister think these projects were all paid for by the generation who built them? No, minister, You and I are doing that now!
And just to labour the point, his and my little Focker’s will be sharing that load too. Has he forgotten that he was once a little Focker?
There is a name for all of this. It is called deficit spending. Since Federation in 1901, 112 years ago, 82 of those years involved deficit budgets. There have been 18 surplus budgets over that period, 10 of them came during the Howard/Costello years, a period where private sector debt soared to record levels. They were the most unproductive years since federation. There have been just 12 balanced budgets.
If anything demonstrates the failure of sustained budget surpluses, surely that does. Successive generations have always paid off deficit budgets. Budget surpluses make no contribution to major infrastructure projects whatsoever. They do the opposite. They starve the country of money to build infrastructure. Name one major project the Howard government dreamt up and built that we are not paying off today. Did they build anything?
In the article, the main thrust seems to be the minister’s concern for rising unemployment; and well it should be. It is his government’s policies that are forcing unemployment up. The article also claims that former Howard government minister, Peter Reith said unfair industrial relations laws were stopping young people from getting jobs and he criticised Prime Minister Tony Abbott for not doing anything to solve the problem.
Far be it for me to criticise anyone who criticises Tony Abbott, but the former minister is quite wrong. It is not our industrial relations laws that are preventing people from getting jobs but a failure of government to provide stimulus spending that would generate demand. Demand is what creates jobs, not laws.
Little wonder a former minister of the Howard government would think that way. He had lots of friends, who today, have no idea of how little they did for the nation.
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Enal Kreeny
Return to home pageThe little ignorant Focker grew up to be a great big dumb Focker.
Tell him firmly and with rational clarity John while he puts his fingers in his ears and shouts “I can’t hear you”.
Anything Reith says is poison so best ignore the conservative department of dumb Fockers.
The problem is, it will not be possible for governments nor the public to pay off debt. The fractional reserve banking system requires debt and constant inflation but, peaking crude oil production is going to end all that. Debt is how money is created. Peak oil mates, peak oil.
Leaders at the recent G20 have signed off on bank bail ins because of this fact.
http://peakoil.com/publicpolicy/the-global-bankers-coup-bail-in-and-the-shadowy-financial-stability-board
http://www.infowars.com/its-official-the-worldwide-bail-ins-are-coming/
http://www.huffingtonpost.com/ellen-brown/new-g20-bailin-rules-now-_b_6244394.html
The GFC which, never ended, is going to look like a picnic.
Cheers.
Corman the Con man is a brainless pheasant plucker….
“I am not a pheasant plucker, I’m a pheasant plucker’s son.
I am only plucking pheasants ’till the pheasant plucker comes.
I am not a pheasant plucker, I’m a pheasant fcker’s son.
I am only fcking pheasants ’till the peasant fcker comes’ “
If this lot had been in power back in the day, the Snowy Mountains Scheme would never have been built. Here in Tassie we have a road up our mountain because we had a Labor premier who decided that men needed work during the depression, we have hydro electrciity schemes providing clean energy throughout our state because Labor governments had vision. LNP governments leave everything to private enterprise, and whilst there are many businesses providing employment and growth all over the country, their focus is on profits for themselves NOT the good of the country, Unemployment is not their concern, GDP is not their concern, social welfare is not their concern. This is the concern of a decent government, this is what we pay tax for, to provide for the future, for our children and their future. This is what our fathers and grandfathers fought two world wars for, and I shudder to think what they would make of the fascists we now have running the country into the ground. I’m a great supporter of migrants generally, but Matthias Corman wasn’t born here, he’s been here for 5 minutes of his life and he has no idea what he is talking about.
Keitha, He followed a woman here, that’s how he came to be here, He followed a woman….tooo funny LOL
https://twitter.com/TheKouk/status/54652375945723084
Many thanks for writing this article. You’ve said what I know and have been saying for ages. This Liberal mantra about kids paying it off is absolute bullshit. Even worse, of course the grocery bill gets fully paid immediately but not the house and the car (i.e. the dams, the railways, the big stuff). Without the stimulus to save us from the GFC we would have had a bigger deficit resulting from mass unemployment and all that comes with that misery. The mining companies were the first to lay off thousands. God, it is so much bullshit heaped upon bullshit. Town water and sewerage schemes are not all paid for in one hit – we all benefit so we all share in the cost, not just those who happened to live in whatever year the scheme was built. The Snowy was Labor’s though it was built mainly under Menzies who fortunately had to go ahead with it even though he was not in favour. Liberals are all bastards. Feel better now.
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Apparently the Cormann family dodged paying back the money (disability support) his parents got from the Belgian government …. by bringing them all to Australia.
http://www.smh.com.au/federal-politics/political-news/mathias-cormann-a-tale-of-two-lives-20140502-zr37g.html
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Looks like the only place the sun isn't shining in Australia is at the "Harquebus" home.
SNAFU.
HT to Casablaca at The Political Sword for this one:
http://theconversation.com/menzies-a-failure-by-todays-rules-ran-a-budget-to-build-the-nation-30823
John well done. Your last point particularly. I still wonder why those funny folk who can’t work out their nationality (Belgian/Dutch/Flemish), find a need to move round the world and Fock other people’s perfectly good systems. I am thinking of course not only of Corperson, but also that weird prick in California with the muscles devoid of a brain.
The other point, regarding the last sentence in your post: “Little wonder a former minister of the Howard government would think that way. They have no idea of how little they did for the nation.” I think you have the tense wrong.
Keitha Granville. You nailed it. A surplus is money, our money, not being spent to benefit us! Any dumbcluck who believes the Cormann nonsense is a dumber little Focker than Matthias!! This bull about spending our kids future? They will have no future!! There will be no jobs in Automotive! No jobs in manufacturing! Those who go to. Uni will be paying off their degrees until they are 50 and trying to live on what their kids can earn because by then maybe common sense will have prevailed and these neo con numbnuts. As for Cormanns statement about putting groceries on the credit card?? Grow up Mattihas some people need to do that to eat on a weekly basis after they have paid all the penalties you lot are doleing out will nilly. Has there ever been a more stupid argument? Even their election campaign of “less taxes” ” more services” makes no sense to anyone with half a brain! They were elected by ignorant racist redneck whom I hope are suffering now!
Oh John, Why did you have to bring up “Peter Reiths” name ? Howards Govt was sickening, but this mob of Loons brings something up in my throat. Have they ever had any idea (good or bad) ? As someone said, it is like they are driving in reverse with no rear vision mirror.
Please bring on 2016, Please.
Bacchus Howard also ran a big government, I believe the biggest as a percentage in our history. It was Rudd and Gillard who began paring it back and increasing efficiency dividends.
I always have an ironic and sad, because of the incongruity, chuckle to myself when I see a right winger go on about Labor big governments and their wastefulness because when measured most Liberal governments were more inefficient and wasteful. Sad thing is that no amount of quoting them facts and showing them the figures will ever convince them that a Liberal government is costly and wasteful, or that a Liberal leader costs the taxpayer far more during their leadership and after they retire from politics.
Sir ScotchMistery, I was never confident of it. I have made an alteration and would appreciate your opinion.
Said Corman, “I’ll be back”. Sorry Mathius, You will be gone Girly Man.
Thanks John, great work.
I put it to Mathias that it’s he and his party that are loading up our descendants unfairly: higher health, education, fuel costs, plus making them work more years til they can access their own super and the latest: work for less pay.
Has he thought about stopping the high end tax cuts, welfare, concessions and tax avoidance schemes right now.
They’ll hardly notice it, as the WA premier would say.
Along the same lines as the question being asked consistently of the head mother focker, I wonder if the focker has renounced his Belgian citizenship?
Hmmm – could it be ‘… how little they do for the nation’ in view of the fact that they are currently the government.
457 workers are cheaper than Australians, at every level and will remain so, till our wages drop enough to reach parity.
Nevertheless it is amazing that abbutt, head of the coalition, a £10 pommie and corman, a European refugee, who pay themselves with public money into the top 1% of earners, who don’t work on weekends or public holidays without large extra payments, who don’t work during school holidays, who have food, accommodation and travel paid for, reimbursed or heavily subsidised, by our taxes are attacking penalty rates for the lowest paid workers.
Time to set up personal websites for each pollie, so their workload is visible. This will prove their worth!
All a bit rich coming from Cormann. Emigrated here to take advantage of all Australia has to offer…and not that long ago. If you were born in Eupen, Belgium as he was,the town that was given a special award by Hitler for “cleansing” it of Jews during second world war, I suppose Australia would look pretty good?
Just goes to prove any dickhead can be a politician.
Spot on.
”Govt to tackle head on claims it is unfair and say borrowing against our kids is the most unfair act of all”,
The above slogan will be repeated again and again (as with all their other slogans), in an effort to brainwash the public into believing this tripe.
Every time cormann talks I want to take an ice pick to my ears! In all fairness, shorten has much the same impact. If someone programmed a robot with the current slogans of their party, would anyone be able to tell the difference between that and cormann? I watched a summary of 2014 politics between Katharine Murphy and Lenore Taylor on the guardian site and they picked cormann as a consistent performer. I have respect for Murphy but in what universe is this dill performing at anything??!! (other than lining the pockets of coalition donors?).
Where are all the Coalition Right wing nuts in this discussion. Have they all gone home. Or does the truth hurt and they have gone to ground.
Ripper Article John. You have absolutely nailed it, and put paid to the coalitions sloganeering and scaremongering about ‘intergenerational debt’. A few simple lessons in ‘economics 101’ might go some way toward exposing the lies this mob are feeding to the public on a daily basis. Keep em coming.
John, what about something on the Billion dollars a day/week/month it is costing us to pay for the deficit? Am I right in thinking that is actually the interest we pay on the government bonds on issue, or am I barking up the wrong tree?
Hi Ricardo29 I agree and also would the fact that interest rates are so low at the moment help. Just a though bubble.
Cormann: “No parent would keep putting a chunk of their grocery bill on to their credit card every week through their whole life and ask their kids to pay it off after they go.
What is fair is for every generation to take responsibility for its own day-to-day living expenses and to do everything we can to leave our country in better, stronger shape than we found it.”
But it’s ok if profit-seeking corporation’s continue to selfishly destroy Earth’s life supporting ecosystems, exacerbating irreversible destabilisation of the planets climate every week through their whole life and ask our kids to live (or more likely die!) in hopeless wretched poverty after they inevitably go bankrupt.
The last sentence of Cormann’s quotation is incongruous, given the vandalous irresponsible ecological impact of his government’s actions – in willful defiance of overwhelming scientific advice to act otherwise to ensure survival of future generations.
@Ricardo29, the “official” interest payments are shown to be of the order of $1 billion a month but it is a book entry only. Interest payments on Commonwealth Government Securities are made twice a year and are paid ex nihilo (out of thin air). The government keeps its books as though it were a business or a household. That, however, is not what the Reserve Bank does.
@Jagman48, no the official interest rate on each bond sale is fixed for that issue although when listed on the bond market can appear to be slightly north of that. The rate is in the general area of 2.75% but it varies. It generally reflects something akin to the bank rate.
I do wish we would call the money the government borrows to ‘build’ with “investment”. I also wonder if Cormann being Belgium has not concept of borrowing to build for the future, after all Belgium was rebuilt after the second world war with Marshall Plan money, which did not have to be paid back. (or so I understand)
Hi John as a 66 year old that is still a great rate to me. Better than 16 or so in my memory. But mate keep on writing. You inspire me.
Wow I am watching hitler’s neighbour????the german ‘intellectuals’ and the ‘rich’ cannot believe how this austrian oaf was elected on a platform of slogans to fix germany’s ills and enrich the people.
Our pommie oaf is a only naive political pair, an ex-soldier and a revhead, away from the modern equivalent of ‘dictatorship’ and he has been borrowing billions giving him a massive war chest. My children will probably be alright but my grandies are 13, 11, 9 and 7????
Australian journalists are like Hans Kaltenborn when we need an Edgar Mowrer. Perhaps someone other than AIM to drive the questions. Are we all short on fortitude???
John Kelly , I have learned so much from your articles , but why does the ALP not get out there and say the same stuff and make the Liberals look foolish – I just don’t understand the ALP’s thinking on this one or are they caught up in the same game as the Liberals
@Peter Ball, you, me and the rest of the MMT world are asking that question of Labor. One would have thought that after they were falsely savaged by the LNP for the “debt and deficit disaster” they would be looking for blood to spill. My guess is they just don’t understand it well enough. If Wayne Swan doesn’t ‘get it’, my guess is Chris Bowen doesn’t either.
Deport “Horse-Shite” Coormann. Either before or after having some-one at least teach him about being a human in a socxial context.
“why does the ALP not get out there and say the same stuff and make the Liberals look foolish – I just don’t understand the ALP’s thinking on this one or are they caught up in the same game as the Liberals”
If Labor points out the lies they then have to admit why they aren’t doing anything about creating full employment – because they too are in bed with big business!
@John Kelly.
if there is one person in the ALP that could explain this to the public it is Anthony Albanese.
Suggest you spend a couple of instructional hours with him – then give him a whiteboard, a handful of markers and watch him go.
Have you seen his analysis of Abbott’s 2014 infrastructure budget? :
He is an under utilised talent.
Someone has got to step up and expose the false ‘household budget’ analogy for the con it is.
@JohnB, I really hope that there is more than one person within Labor capable of explaining MMT but, while Albo does a good job on transport, it is Bowen that needs to be converted. However, access to these guys and girls is the problem. John Armour recently described a discussion he had with Wayne Swan and Swan’s reply was, “I disagree”. How do you overcome that? What we need is for someone like Bill Mitchell to be given air time to start a groundswell of agitation so strong that politicians cannot ignore it. Meanwhile we keep plugging away in the hope that one day someone will sit up and take note.
Pingback: Cormann was once a little Focker | THE VIEW FROM MY GARDEN
Reith didn’t want his little Focker to grow up with any phone card debt, so he gave him a taxpayer funded phone card to use to the tune of $50,000
From a man that trained a workforce in Dubai and took the dogs onto the waterfront. Trouble is, too many still on front bench from that time.
I do not believe, those who come after us, will be happy to inherit a country that has been allowed to run down. A country that does not have the infrastructure of this century. A country that has been allowed to go backwards.
Capitalism alone will not fill the void. Never has and never will.
We are creating a messy broadband system of up to five technologies, very few with fibre to the premises, which they will need to dismantle and replace. Replace with what we should be doing now.
Then we see our young people today, be loaded with debt, which they will carry far into the future, to gain the qualifications needed to join the workforce.
We see our magnificence research facilities that has deliver much, razed across the country.
We leave them the extra cost of dealing with carbon emissions, we are either to mean or stupid to deal with today.
Yes, Abbott and your cohorts are leaving a legacy for the coming generations, that leave us hanging our heads in shame.
We see our manufacturing industry demolished to allowed the mining of ore and fossil fuel. Nothing for future generations there.
They will despise us for being selfish, refusing to invest in the countries future.
One can see it as debt or investment. Personally I believe in investment.
This mob thinks they know the cost of everything. Not sure they do. What I do know, they know the value of nothing.
I still remember similar political outcry about the building of the Opera House. So great it cost Labor government. Yes the Coalition did manage to save a little. Change plans of the building that led it to be inefficient, not living up to what was initially planned. Yes, decades later, hundred’s of millions dollars was spent bringing it up to the standard originally designed for.
When I look at NBNCo, I see the same situation. I give thanks that Lang ensured so many lanes on the Harbour Bridge. By the way, another accused of leaving debt to future generations. Growing up I did not see the debt, but I was very aware of what he built. Hospitals, Bridge and electrifying of suburban rail for starters.
I do not think any today, look at the Opera House, and say it should not have been built, because we could not afford it.
I might have this wrong, as it comes from memories decades ago. It was said that the penniless Onassis borrowed as much as he could get his hands on, oil tankers during the depression. Yes, they were seen as worthless and laying idle. From this debt, he became one of the wealthiest man in the world. yes, debt is indeed bad.
@John K – I was merely pointing out that the use of the word “did” as opposed to “are doing”, since they certainly continue to Fock things hereabouts.
@JohKelly
There are two aspects to MMT.
1) the purely descriptive aspect detailing how modern money is created
2) policy proposals arising out of these insights as well as studies of data leading to certain hypotheses, for which evidence appears to be accumulating(e.g. surplus budgets are followed by recessions)
With respect to the first elements, no one can say “I disagree” without looking like a complete fool. It’s a bit like disagreeing that the sky is blue. So what did Wayne Swan mean? Perhaps he is indeed a fool for trumpeting loudly that he would deliver a surplus, and falling into the “debt and deficit” trap of the coalition.
When you wtite of Cormann, I think that you have misspelt the word focker.
That Cormann argument is such an easy target one wonders at the mentality of the man (no I don’t really – but I like that turn of phrase). Absolutely nothing would ever be built in the way of infrastructure – or much else- if it was not ‘paid off” over generations. Or to put it another way – how dare those spindrift bastards of the 1930’s burden our lives paying off that damn bridge!! An’ as for that completely useless Snowy Mountains Scheme – aren’t we still paying for it eh? And what do we get back? A piddling bit of sustainable electricity production. Sheeesh!
@Totaram
“With respect to the first elements, no one can say “I disagree” without looking like a complete fool. It’s a bit like disagreeing that the sky is blue. So what did Wayne Swan mean? Perhaps he is indeed a fool for trumpeting loudly that he would deliver a surplus, and falling into the “debt and deficit” trap of the coalition”
Swan had said in his speech at a book signing that “if we’re to be Keynesians in the bad times we have to be Keynesians in the good times” by way of justifying his early return to a surplus.
I was quizzing him on his understanding of the Sectoral Balances pointing out that it was an identity that underpinned the national accounts, and that it made the pursuit of a surplus under current economic conditions virtually impossible.
It would require of course that the private sector take on even more debt just for the economy to stand still.
He said he’d of “it” but “disagreed”.
: (
@Harquebus
The problem is, it will not be possible for governments nor the public to pay off debt. The fractional reserve banking system requires debt and constant inflation
Why would a government want to “pay off debt”? The so-called “debt” is a private sector asset.
In that respect it isn’t actually a “debt”.
Any attempt to pay off the “debt” would destroy the economy.
As to “fractional reserve banking” many countries don’t even have reserve requirements, Australia being one of them, so there goes that theory.
To put the household budget and the government budget into a bit of perspective, the household budget is funded by wages/payments from employers/other entities, while in theory the government budget is funded the same way, except read taxpayers for employers/other entities.
The problem is that that to many of the government’s employers are being allowed to underpay them or not pay any of their fair share of “wages” at all, i.e. large corporations (enter your choice of names here…………), many superannuants, and the list goes on.
Of course, we are going to have a “mature” discussion about taxation this year, but it will boil down to raising the GST (a good idea if done properly) and then giving tax cuts to those who don’t need them, making the whole exercise a waste of time and huge sums of money that will be paid to people to tell them what they want to hear.
When one in seven Australians are living in poverty and unemployment is rising I do not think it is a good time to be talking about increasing regressive taxes like the GST whilst advocating a cut in company tax considering all the reports about how little tax our wealthiest pay. Extending the base of the GST to cover fresh food, health and education would obviously impact most, once again, on those who can least afford it. How about we have a new category where TRUE luxury items, and by that I do not mean tampons and sanitary napkins, get charged 20% GST. When rich people want something they don’t care what the price is. The same can’t be said of those buying bread and milk for survival.
Kaye I like that idea of a differential GST but how would you enforce it?
The logistics of sorting luxuries from essentials and others would create a whole new bureaucracy and be a nightmare. Take services as an example. Rich people can afford the best barristers to fight their cases (civil) but how would we classify and charge them?
@John Kelly
Cormann’s credit card analogy is possibly even more stupid than revealed in your analysis John.
As you correctly point out deficit spending on all those big public infrastructure projects in the gold standard era certainly had to be “paid back” but in a kind of “magic pudding” way they paid for themselves through GDP growth. There was no need to raise taxes.
A contemporary of Keynes, Michal Kalecki, writing in that era, observed that “deficits pay for themselves”.
But these days we have a fiat currency so none of that is applicable.
Intergenerational fairness improved by deficits
The only debt we can leave to our children is real debt as in lost education opportunities, lost earning opportunities, and the crushing debt of global warming and the waste of finite natural resources. The government cannot leave a financial debt to future generations.
The macabre irony here is that while Cormann diverts our attention with his phony grocery bill analogy, his government’s other policies that attack education, support high levels of unemployment, and vandalise the natural environment make certain our kids will be loaded up with the kind of debt that can never be “paid back”.
@olddavey
…while in theory the government budget is funded the same way, except read taxpayers for employers/other entities
That ‘theory’, although universally believed, is actually incorrect. The purpose of taxation is to manage demand (inflation) in the economy.
That flows logically from understanding that in an economy where the government is the monopoly issuer of the currency and can create all the money it needs out of thin air, taxes clearly have no funding purpose.
So starting out with a mistake is unlikely to lead to any kind of “mature” discussion.
If tax is all about managing the price level then a GST is probably the best way to go about it. The trick will be in how we build in safeguards to protect the less well off.
Pappinbarra Fox,
I remember the nightmare we had when the GST was introduced. It was rushed in before anyone had any real idea of what would be taxed and what wouldn’t. Trying to set up our tills for the changeover was unbelievably difficult. I rang the tax department to ask what things would be exempt and they said “use your best judgement”. Who would ever guess that shower caps were GST free but tampons were GST taxed? So your point is well made – the differential GST just occurred to me as I was typing so I haven’t really thought it through. What would be better would be a financial transactions tax.
Kaye Lee,
Here’s an article that gives (to my mind) good reasons why company tax might be a bad thing.
Taxes for Revenue are Obsolete
Conflating company tax with the wealthy muddies the water because the wealthy, if one assumes they would get most of the freed up dividends, would pay income tax on their dividends at their marginal rates, so the net result might be no different.
Just think of the benefits to society if all the time and energy that goes into managing and paying company tax was diverted into say, planting gum trees. I’m sure there are lots of chartered accountants who’d enjoy engaging with the natural world in Abbott’s Green Army.
John Kelly,
I guess you’re aware of the debate Warwick Smith has stirred up on The Guardian?
“Repeat after me: the Australian economy is not like a household budget”
I thought it might’ve prompted you to do a bit of editing of your own article on the same subject.
You’ve written some really good stuff on MMT John so it’s a bit of a shame to leave some of those misunderstandings I hesitantly alluded to on the record.
, since you believe that having ideas+opinions should be tempered with one’s time served as a recent arrival wanting to take advantage of the suite of goodies Australia has to offer…. What’s your opinion on economic refugees and immigrants coming here, particularly those with little education and/or who are ESL?
Obviously having wants and needs that are “a bit rich” are out.