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Morrison is not up to the job

It is extraordinary how the mainstream media is protecting the Coalition government by not exposing the true state of the economy.

Right now, the government is between a rock and a hard place and has no idea which way to turn. The latest ABS figures for the Wage Price Index show a further deteriorating trend in the most important category of taxation revenue, wages growth.

The flat wages drift continues and growth is being driven by private sector credit.

In reality, wages growth is important in terms of tax revenue but irrelevant in terms of getting Australians back to work. But our Treasurer can’t see that. His answer for low wages growth is to give corporations a tax cut.

On the ABC’s 7.30 last night, Scott Morrison was asked how the low wages growth issue could be fixed. He replied by saying, “Australians need to earn more AND companies need to earn more.” He then went on to say that the government’s corporate tax plan was necessary to give companies more “headroom” to give their workers more hours.

What utter nonsense! By “headroom” I presume he meant more after-tax profit. But businesses must first make a profit before they pay any tax, so how would a lower tax rate help it earn more? It is a ridiculous suggestion, all the more vindicated when one compares how many of our major corporations pay no tax at all.

3c70f5c030283bb617c5726f4316b763 Leigh Sales put it to Morrison that Australian companies were already fairly profitable, therefore why shouldn’t they pay their workers more. Another ridiculous suggestion. What she should have asked is, “why doesn’t the government find jobs for the 1 million plus who are underemployed and the 700,000 who want work but can’t find it?”

There were 1,011,100 workers underemployed in August 2016.

More jobs would create more hours as well as exponential revenue by helping drive greater demand. The depth of questions asked of our government ministers is pathetic.

If Morrison was a Labor treasurer, he would be vilified by both the Murdoch, and Fairfax media outlets and the ABC, mercilessly.

Morrison is not up to the job. He waffles on about corporate tax rates in the U.K. and Donald Trump’s plans to cut the US corporate tax rate to 15% believing this is what drives an economy. He needs to speak to business more forcefully.

Professor Bill Mitchell says, “The suppression of real wages growth has been a deliberate strategy of business firms, exploiting the entrenched unemployment and rising underemployment over the last two or three decades.”

That strategy continues today with the government trying to pass its anti-union legislation through the senate. Productivity growth used to be shared with the workforce, creating higher rates of spending which then created more jobs.

Today, the gap between productivity growth and wages growth is widening. Morrison could lower the corporate tax rate to zero and it won’t do anything for wages growth.

The workforce will not increase their spending on the credit card forever. And companies will not employ new labour if they cannot sell more of the goods and services they currently produce. It’s not rocket science.

Morrison doesn’t have a clue.

 

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55 comments

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  1. brickbob

    ‘Good article,and yes the media in this country are lazy and corrupt.

  2. RichardU

    Low tax rates “create” jobs, but stable wage rates don’t? Please explain Mr Morrison.

    And on another tack wages are tax deductible so why are lower taxed needed for employers to take on more labour?

  3. Will

    Scott Morrison what a vile creature.

  4. Wayne Turner

    No one in this mob is up to the job,unless you are a big business briber of theirs they don’t care about you.

    This mob has the MSM who are their promotional wing,and sadly enough of the gullible and ignorant public who keep voting them back in.

  5. Harquebus

    What is John Kelly’s answer to the increasing environmental threats and resource shortages that we are facing? Pedal to the metal.
    More jobs and greater demand are the last things that we need. Only fools believe otherwise.
    Scott Morrison isn’t the only one who hasn’t got a clue. Bill Mitchell is overrated and an ignorant moron.
    Cheers.

  6. helvityni

    Wayne Turner, you said it all ; not one competent amongst them, the PM and the Lady Libs included. Morrison and Dutton at the very bottom of the heap….

  7. Gangey1959

    Australia’s Treasurer, the wondermuppet scooter moronscum. What a cockhead. He is still trying to remember what the sequence of digits is from one to ten as taught in grade prep. (He must be private school educated.)
    Anyone with more than two brain-cells would think that raising the employment level, and increasing wages was rocket science. Maybe, considering the governments we have had since Julia was PM, that is why we are in the mess we are in. Let’s face it, Parliament, with the exceptions of Ms Wong and Mark Dreyfus QC, has the collective intelligence of a can of damp Milo. And about as much potential.
    And July 2 was just under 5 months ago. F*ck !

  8. John Kelly

    My favourite responder, Harquebus asks, “What is John Kelly’s answer to the increasing environmental threats and resource shortages that we are facing? Pedal to the metal.” Well, the most obvious answer is to reduce the population. But how? Laboratory tests with white mice have proved conclusively that if you provide more food than they need, they will multiply. But if you only provide enough food for existing numbers, the mice numbers will not increase. If there was a way to ensure food supplies were reduced to the level needed, rather than as much as we want, our population would stabilise and begin to decline. OR you could go the Japanese route and ban immigration. Japan’s population is now in decline.

  9. Harquebus

    John Kelly
    If you and others are not prepared to see that vast majority sitting on their unemployed bums while waiting to die then, don’t bitch and complain as our life support systems continue to be destroyed for the sake of the economy which, has no hope of being rescued.
    Food was not mentioned once in your submission and we are not mice.
    You are correct on population reduction. How is debatable and is also unavoidable.
    Cheers.

  10. Testybarkofanoldbiddy

    I watching The Drum on ABC earlier in the week and they were discussing tax cuts for big business to encourage investment.

    Almost all of them were arguing that Australia had to do this in order to compete with businesses who will set up in countries like Singapore where taxation is very low. But none of them were discussing – apart from one person and I can’t remember his name now, what the outcome of that would be in terms of jobs and growth. It was just assumed that this would be the result.

  11. Chris Peel

    Woolworth’s – large profit, reduces workforce.
    Cole’s – large profit, reduces workforce.
    Big 4 Bank’s – large profit, reduces workforce.
    and so on and so forth……
    …..not seeing any inkling that higher profits create more jobs. If that were truly the case then most country towns might still have a bank.

  12. Harquebus

    I watched theDrum the other day and a corporate journalist complained that whenever she advocated growth, the lefties would jump on her and say, “What about the environment?”. John Barron went “Hmmm” and quickly moved on. At least it is a start.

  13. Matters Not

    Testybarkofanoldbiddy, his name is Sam Crosby and he’s from the McKell Institute.

  14. Graeme Henchel

    It is important to understand the role of people like Dutton in this. Some believe that he is just a right wing loose cannon saying outrageous things. I think his dogwhistling is a deliberate ploy to distract the electorate and the media from analysis of the governments woeful economic performance. What topics get covered on QandA for example, racism, same sex marriage, global warming. Very seldom do you see a program devoted to hard economic issues and analysis.

    Not to say these aren’t important issues but the government hides behind these issues. It is happy to distract the population especially disenfranchised and poor suffering from the effects of the governments Neo conservative policy. Better to distract them of even better attract their vote because of confected issues than to have them realise they are being screwed
    When I say confected issues I mean that in my view racism, same sex marriage and global warming should have been dealt with and in a bi partisan world they would be.

  15. Kronomex

    Scott Morrison, the epitome of the clueless, “I once used a calculator so I know what I’m talking about.” lifelong leech on the public purse pretending to be a treasurer. He’s the LNP’s go-to thug. I wonder if he prays to the strange, unknowable, supernatural, omnipotent invisible being that lives in the clouds for guidance when his calculator runs out of power and he runs out of fingers and toes to count on.

  16. Testybarkofanoldbiddy

    @mattersnot Ahh… thank you for that. He was the only one talking about the lack of positive effect on growth, that this will have.

  17. Robyn Dunphy

    Morrison has a very odd work history. Incompetence has been a common thread, it seems.

  18. Christian Marx

    No LNP senator is up for the job. They are all free market terrorists. Pure evil.

  19. Wayne Turner

    @Graeme Henchel: Spot on.They love to “distract” with their “weapons of mass distraction” egs: bash asylum seekers,bash poor non-white minorities,bash the unemployed,etc,etc…

    All to distract from all their economic failures,such as their lying empty slogan: “jobs and growth”.

    “Jobs and growth” – Don’t forget it.Everytime this mob dog whistles to “look over there” and “distract”….

  20. Miriam English

    Graeme Henchel, I think you have it exactly right.

  21. helvityni

    ” I wonder if he prays to the strange, unknowable, supernatural, omnipotent invisible being that lives in the clouds for guidance when his calculator runs out of power and he runs out of fingers and toes to count on.”

    LOL, Knonomex, and his mouth moves fast, so fast we can’t make out what he’s saying….maybe he’s praying….

  22. Marilyn

    The main stream media are afraid and do what their bosses tell them. Investigative reports that tell the truth about the government are frowned upon and lead to loss of job, Australian Federal Police are also used to investigate any journalist of character who attempts to reveal the corruption in politics. Then there is the fact that there are more cadet journalists than experienced ones. Cuts in real wages have occurred over the past ten years so any journalist negotiating for full time employment has had to accept lower wages in their contract or they are let go.

    It is basically a matter of publish what we tell you to write by the big corporations which is why Murdoch’s rags are so biased. The independent media is where you can find more balanced reporting but the MSM is the fodder the masses consume!

  23. jim

    But if Labor was in we’d hear “Budget emergency” front page news “Labor the Economic terrorists” “Ditch the bitch” and here we have these Liberal /LNP incompetents biggest spending biggest wasting government we’ve ever have had.
    when is enough enough, enough of the LNP biased media would be a start ..Question More..

    From 2013……The facts of the budget show that the current government’s budgetary footprint on the economy is small, running at the lowest level in 35 years, writes Stephen Koukoulas.

    The Federal election is now less than a year away. The budget surplus, government spending, tax and debt are likely to feature prominently in each side’s efforts to convince voters that they are the better economic manager.

    The Liberal Party and many conservative commentators suggest that the size of government in Australia under the current Labor Government is too big.

    Opposition Leader Tony Abbott has said the current government “is addicted to taxes” and that it “is spending like a drunken sailor… mortgaging our future”. In a similar vein, shadow treasurer Joe Hockey says “Labor has shown it is incapable of cutting spending”.

    Either these comments are deliberate mis-truths or reflect the lack of understanding of budget policy from people who, within a year, could well be prime minister and treasurer.

    The facts of the budget show that the current government’s budgetary footprint on the economy is small, running at the lowest level in 35 years. The current small government is made up of both low tax receipts and record cuts in government spending.

    The tax to GDP ratio has averaged 21.1 per cent of GDP in the five years of the current Labor Government. The highest tax to GDP ratio in those years is for 2012-13 where it will reach 22.2 per cent. Under the Liberal Party-lead Coalition, the Howard government tax to GDP ratio averaged 23.4 per cent over its 12 years in office and never once did it fall below 22.2 per cent. In other words, the tax to GDP ratio under the current government is at a level last seen during the Keating government in the early 1990s and before that, we have to go back to the 1970s to see such a low-taxing government.

    The difference between the average tax level of the previous Coalition government and the current Labor Government is 2.3 per cent of GDP. In today’s dollar terms, that is around $35 billion per annum in less tax collected by the Labor Government compared with the previous Coalition government. That $35 billion lower tax take is equivalent to around $4,000 per year for every household in Australia.

    The budget papers also show that the Howard government was the highest taxing government in Australia’s history. In 2004-05 and 2005-06, the tax to GDP ratio reached a record high 24.2 per cent. In addition, there have been only seven occasions where the tax to GDP ratio has been in excess of 23.5 per cent of GDP and all seven were under the Howard government.

    In a similar vein, in the last 30 years, there have been 10 occasions when the tax to GDP ratio has been below 22.0 per cent of GDP and all 10 were under a Labor Government. To put simply, the Howard government was a high taxer, while the current Labor Government is a lower taxer.

    In terms of government spending, there have been only five years in the four decades leading up to 2012-13 when real government spending was cut in real terms. None of those cuts were delivered by a Coalition government. All five times that there has been a cut in real government spending have been when a Labor government has framed and delivered the budget. There were three years during the Hawke government in the late 1980s where government spending was cut in real terms and there have been two occasions in the current Labor administration where such cuts have occurred.

    In what should be an embarrassing fact for Mr Hockey, 2012-13 will see real government spending fall 4.4 per cent, the biggest cut ever recorded. This cut will see the government spending to GDP ratio fall to 23.8 per cent, having previously been ramped up to successfully counter the shock from the global financial crisis. This level of spending is 0.4 per cent of GDP below the average government spending level of the Howard government. In today’s dollar terms, the 0.4 per cent of GDP amounts to around $6 billion.

    All of this suggests that the current government and the Labor Party more generally are low taxing and the only side of politics willing to cut spending when required.

  24. Miriam English

    Harquebus, the economy can be rescued, and it can be done without screwing the people over and without destroying the environment we depend upon. Once again, you are looking backwards. You are just as trapped by old thinking as the idiots in government.

    • By shifting to renewable energy we can let fossil fuels die as they should have done years ago.

    • By fostering research on efficiency and renewables we can continue to reduce the energy required to manufacture them and reduce the amount of energy needed to bring us comfortable lives.

    • By moving into a true information economy we can let those who insist on continued growth actually benefit us instead of destroying our world, because ideas are immaterial. They really can grow without limit.

    • By boosting automation we can finally introduce an age of leisure and with a universal basic income, turn unemployment into a good thing instead of something bad.

    • By making a comfortable, efficient, low-energy lifestyle available and helping to spread it further around the world we radically decrease population growth. (When you raise living standards to a certain threshold, birthrate drops to below replacement.) The rate is already falling. We just need it to fall below replacement level as quickly as possible.

    • Lastly, I know this is going to seem way-out and too science-fictiony for most people, but believe me, it is honestly just around the corner. When we have human level intelligent machines people will start bonding to them. At that point get ready for a truly breathtaking population crash. There are already people who fall in love with their Real Dolls and Fantasy Dolls. How many people will turn to them when the doll can genuinely proclaim love in return, be a comforting shoulder to cry on, and help with problems, instead of having to work hard at a relationship with a real human being? The ultimate contraceptive.

  25. jim

    Labor gets 3 states economy moving….A report into the economies of every state and territory shows South Australia has been improving since late 2015, due partly to the growing tourism sector according to the Premier.

    The ANZ Stateometer put SA’s economic performance ahead of all other Australian jurisdictions, with the exception of Victoria and the ACT.

    It showed South Australia’s economy has been improving since late 2015 and is signifying trend growth…http://www.abc.net.au/news/2016-11-16/tourism-helps-improve-sas-economy-premier-jay-weatherill-says/8029150

  26. iggy648

    Who’s going to start a new business or invest more in an existing one, when they know people don’t have money to spend to buy whatever they make? The average Joe or Josephine is spending so much of their income on mortgage or rent, they are not willing to spend on other stuff. Negative gearing is the most destructive force in play in Australia at the moment. Last time I looked, the average mortgage was $440,000. Repayments on this over 25 years are about $2500 a month. If negative gearing had been slightly less successful in driving up prices, and the average was still at $340000, the repayments would be closer to $1500. That’s about $1000 the average mortgage holder would have every month to buy stuff. Three million mortgages means about three billion dollars a month potentially put into the economy, or 36 billion dollars a year. Instead it goes into banks. Are they using it well?

  27. Zathras

    helvityni,

    Morrison is a member of a Pentecostal Evangelical Church where they “speak in tongues”, which may explain his tendency to babble endlessly during interviews and make political statements instead of answering questions.

    As well as having selective memory, he’s also an example of selective compassion. Before his stint as Minister for Immigration, I recall how he harangued Gillard about the cost of bringing refugee families to Sydney to attend the funeral of the Christmas Island drowning tragedy.

    Despite doubling the amount of previously dreaded Debt and Deficit Disaster it’s been a litany of economic backflips and failures that are portrayed as victories.

    The only certainty is that everything bad that will be announced in the coming MYEFO will be the fault of Labor but any good news will be all his own work.

    And this is man who some see as a future PM?

  28. Percy

    The WANKERS are more interested in chasing old age pensioners like my 71 year father
    Today I received a letter from the ATO threatening action for not lodging a tax return since he has been on the pension
    VIVA LE REVOLUTION

  29. MichaelW

    Morrison is not up to the job? I think you should have included most if not all of the coalition front bench, Dutton, Pyne, Joyce, Ley, Turnbull to name just a few.

    As for Morrison the man who wants to reduce taxes for middle and high earners because of bracket creep. What bracket creep? Anyone had a pay rise lately? If workers receive pay rises they pay more tax and buy more goods, hence more revenue for the government, yet the coalition oppose anyone receiving a pay rise including their own staff.

    As usual when parliament closes for the Christmas break ( do politicians receive 17.5% loading on their 5 or 6 months holidays per year? ) the last item on the agenda will be to vote on recommended pay rises for all pollies, no doubt there will bipartisan agreement on this issue.

  30. SGB

    Harquebus
    Sorry but inspite of the fact that I agree with your concern about world population numbers, I find your responses to John Kelly, rather bizarre.

    In addition I read your submission on Population, thought it was ptetty good, but when praised and presented with credible suggestions to reduce population growth your response was once again bizzre in that you attacked with negativity.

    We all agree with your issue of population growth, but John Kelly is not discussing population growth, he is talking macroeconomics, and whilst there is a link, the link is that the answer to population growth is with education and education cost money, of which the federal government has an unlimited supply.

  31. glasssarah

    Morrison was sacked from a previous job (outside of politics), for not being up to the job. It will have been a lesser job than Treasurer of Australia, so “yes” I think it is very fair to say he is not up to the job.

  32. MichaelW

    Percy,
    My Dad served in the army during WW11, France, Germany, Belgium peace keeping force in Middle East. My Mother was a nurse in a then called mental hospital. Came to Australia from UK mid 1960’s both worked their arses off. Dad passed away over two years ago, Mum has been in a nursing home for five years,she owns the house (interstate away from all her relatives) now, because Dad or Mum haven’t lived in the house for two years it is now considered an asset hence they have cut her pension by $175,00 per fortnight.

    Yet grubs like Hockey get rewarded with an overseas posting and still able to claim his pension. Go figure..

  33. Harquebus

    Miriam English
    We have had this argument before so I will just say, again, that I think that you are wrong. The technical innovations that you propose are not going to happen.

    SGB
    I did not raise the population issue. John Kelly did. My initial response was to oppose the creation of new jobs and greater demand.

    MichaelW
    It is no wonder that politicians are widely despised.

  34. Carol Taylor

    Miriam, on a number of those mentioned we were so close. For example UQ was looking at using unviable farmland for the production of hydrogen from algae. This work was done in conjunction with the Germans and the Chinese..then Abbott was elected and funding from major companies dried up. Yet another opportunity put on hold.

  35. wam

    the media merely thrashed the rabbott’s trashing of gillard and swan exposing the lemon, arseholes like the gibbon and wimps like husic. they would do the same if billy and tanya had any fight or passion.
    this government preys alright sniffing easy targets that hanson, greedyX and the coiffured face can support.

    ps The mouse in the lab has time factors and infanticide. In the wild all animals, including us, ignore any restraint.

    pps
    pay rise michael? with contacts you may be able to outline the automatic pollie payrise that .I believe, flows in full to the greedy double dipping hockeys and nelsons plus pensioners like bronny.

  36. nexusxyz

    Morrison waffles…that’s it. That sums up his minuscule talent. But he will get a nice pension.

  37. kerri

    Could not agree more John Kelly.
    If finance were a lake, Morrison would be waterlogged.
    Well out of his depth and getting deeper by the day.
    Yet some predict Morrison will challenge Turnbull before long?
    I doubt he will get the support needed. If we can see his ineptitude I am sure there are some lazy backbenchers who can also see it and many have their eyes on Dutton as the most anti Turnbull member of parliament.

  38. kerri

    It is astonishing that Morrison has gotten as far as he has given his complete failure at just about anything?
    Is it the power of an adult man crying to his invisible friend?

  39. Miriam English

    Harquebus, of the 6 points I made, all of which you deny, more than half are already happening, despite government inaction.

    – the world is already shifting to renewables — even here in Australia where the government is probably the worst in the world for clinging to fossil fuels. Worldwide, coal is dead already. Oil is following it down the plughole. Gas will take a bit longer, but will go too. Investors have been quick to notice this:
    http://www.bloomberg.com/news/articles/2016-04-06/wind-and-solar-are-crushing-fossil-fuels

    – ever greater efficiency in renewables is driving the cost down. Wind energy is already cheaper to generate than heavily subsidised coal, and solar is on track to get there in the near future.

    – automation has been sneaking in for decades. So far it has mostly been under the radar. Automatic teller machines have replaced human tellers. Desktop printers have made local printing businesses uneconomic. Etcetera. But it is accelerating now. Desktop 3D printing is spreading rapidly and will obliterate much of standard industry. Your desktop computer and smartphone already replace many services you would have previously bought (e.g. tax return preparation, spell and grammar checking), but that is set to snowball with cheap AI (see for example http://numenta.com ).

    – efficiency is making big changes, mostly by shifting to more efficient lighting, though replacing v-belts with synchronous ones, re-use of waste heat, and more efficient pumps and pipes have big effects too. As fossil fuels become more expensive, efficiency will become more essential, and those who don’t adopt it will simply disappear from the marketplace. As climate change bites, more people will retrofit efficiency measures in their homes and businesses. (see negawatt and Amory Lovins’ The Negawatt Revolution

    – I would love for us to make the full shift to an information-based economy. It began a while back, but it has hit a speed-bump lately, largely because of obstructive copyright and patent laws controlled by backward-looking corporations, but I’m expecting things to speed up again soon, for a number of reasons I won’t bother going into here.

  40. Miriam English

    Carol Taylor, I hadn’t heard of that. I knew about use of algae for production of diesel, but not for production of hydrogen. What a pity. Another opportunity lost due to the corrupt fools in government. Oh well, someone elsewhere (probably China) will pick it up and we’ll have to buy it from them, no doubt.

  41. Ric Testori

    I am impressed by this article, well articulated and balanced. Super impressed that the writer included the reference from Prof Bill Mitchell, Australia’s foremost expert and critic on Australia’s unemployment disaster,

  42. Harquebus

    Miriam English
    Thank you for that link. I had already seen and read it. Notice that EROEI did not appear once.
    Too many, yourself and John Kelly included, do not factor the declining quality of resources which is causing the economic decay that will result in supply chain disruptions.
    The last that I recently heard was, algoil still costs about $8/ltr to produce and which, does not including refinery processing and hydrogen will never be viable fuel source because, it seeps from containers and does not return the energy required to produce it.
    There is no magic energy formula nor economic miracle that will enable us to avoid the harsh realities that will soon become very apparent if, one hasn’t already realized them. This why politicians with their absurd economic ideology have failed, are failing and will continue to fail.
    On and on we go further into the descent and still, the vast majority continues to believe the hopium bullshit rather than face physical realities and do what is required.
    Cheers.

  43. Florence nee Fedup

    Where does one stop with global corporate tax cuts? Zero? Who pays for the infrastructure these corporations need to exist? That is all, including highly skilled workforce.

  44. Florence nee Fedup

    who would replace Morrison? Dutton wanted job last time.

  45. Florence nee Fedup

    Bringing in migrants could be lowering births in this country. Migrants don’t add to global population growth.

    Best way to slow down population growth is to raise standard living for all.

  46. lawrencesroberts

    G.S.T. to 15% for a 2 year period while they work things out: coming soon to a country near you.

  47. Miriam English

    Harquebus, I know, I’m a sucker to continue trying to put evidence in front of a solution denialist like you.

    Yes, algae-derived oils are not economical yet… until they are. Yes, there are problems related to storage of hydrogen, but metal sponges have, as far as I know, solved the leakage problem. And the very thing you cite as the major problem for fossil fuels: decline in quality and accessibility of reserves is exactly why, even without further development, alternative energy sources are becoming more economical. But research and development are not locked in the past (unlike you, it seems).

    While you deny all solutions you are part of the problem.

    Waving your arm vaguely and saying population has to be reduced is not a solution, it is a restatement of one of the most pressing problems. And it most especially is not a solution when you advocate draconian governmental enforcement. That is, again, part of the problem.

  48. Harquebus

    John Kelly
    I have just finished reading this and thought that you might be interested.

    “An object widely considered as worthless would never become money in a free market.
    However, today, we all use irredeemable paper money. How did essentially worthless objects come to be widely accepted as money?”
    “Rome’s monetary history shows, governments have engaged in theft from the citizenry via monetary debasement from the very dawn of Western civilization.”
    “If the government had to actually raise taxes instead of borrowing the staggering sums of money it uses to keep its welfare/warfare programs running and keeping the vote buying mechanism well oiled, it would have to raise taxes by so much that it would face a rebellion. Instead government resorts to inflation. From the government’s perspective, money supply inflation is nothing but a cleverly disguised hidden tax.”
    “Few people stop to consider that this policy means ruin in the long run. Over time, the middle and lower classes will see their real incomes and living standards shrink ever more, while the true beneficiaries of inflation – those who get first dibs on newly created fiat money – amass more and more wealth in a kind of reverse redistribution from later receivers.”
    “Government mandated fiat currency simply does not work in the long run. We have empirical evidence galore – every fiat currency system in history has failed, except the current one, which has not failed yet.”

    Why Does Fiat Money Seemingly Work?

  49. Harquebus

    Miriam English
    Time will tell.
    Cheers.

  50. John

    We are not in a recovery and we’re not really in a traditional recession. People think of a business cycle, which is a boom followed by a recession and then automatic stabilizers revive the economy. But this time we can’t revive. The reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we’ve been in what I call, debt deflation. People have to pay so much money to the banks that they don’t have enough money to buy the goods and services they produce.

    Democracy’s Debt Ladder

  51. Miriam English

    Harquebus, your disparaging of fiat currency and love of the ridiculous gold standard makes no sense. All currencies fail, fiat or not. Gold-based currencies have the extra evil that makes it easier for a small number of very wealthy people to control all the wealth.

    Gold standards are also out of step with any attempt to move to an information economy because ideas can be made out of nothing and data can be duplicated for zero cost — this is antithetical to a precious metal-based economy. The gold standard devalues scientific and artistic creativity. The more you create, the less it is worth, because the amount of gold effectively doesn’t increase. It is even more worthless than paper money.

    So many of your concepts are caught up in a mythical past beloved by Conservative, right-wing thinkers that it astonishes me. Will you accept new information? Never, it seems.

  52. Harquebus

    Miriam English
    Forget the standard and just use precious and semi precious metals. Debasing metals, as governments have done, can lead to their failure. Pure precious metals have always been desired as a hedge against a loss of confidence in sovereign currencies.

    Search criteria: paper gold ratio

  53. Matters Not

    John, the stock market is difficult to predict:

    •Canada – Toronto’s TSX index up 31 per cent since January

    •UK – FTSE 100 index up 23 per cent since February

    •Germany – Dax up 22 per cent since February

    •Netherlands – AEX index up 20 per cent since February

    •Norway – All-share index up 31 per cent since January

    •Greece – Athex Composite up 50 per cent since February

    •Russia – Micex index up 31 per cent and RTS index up 67 per cent since January

    •Argentina – Merval index up 87 per cent since mid-January

    •Brazil – iBovespa up 66 per cent since mid-January

    •China – Shanghai and Hong Kong up 23 and 31 per cent since early 2016

    •Japan – Nikkei up 22 per cent since June

    •Saudi Arabia – All Share index up 28 per cent since October

    And so is the relationship between credit rating and borrowing costs.

    •The soap opera about Australia’s AAA sovereign rating is back on again, but does it really matter? While the surge in bulk commodity prices should boost corporate tax revenue this looks like being offset by lower personal tax collections due to lower wages growth so yet another budget blow out is possible. Meanwhile S&P has Australia on negative outlook and has warned of a downgrade if there is any further delay in return to balance by 2020-21. Given the continuous delays of recent years and Australia’s continuing dependence on foreign capital the odds of a downgrade are high. But would it matter? First based on other countries that have been downgraded it’s 50/50 as to whether borrowing costs would actually rise in response to a downgrade. Italy and Spain have lower ratings than Australia and yet have lower borrowing costs. And in any case if mortgage rates do rise in response to a downgrade the Reserve Bank of Australia (RBA) can always cut the official interest rate in order to bring them back down to where it wants them. In fact the main blow from a downgrade would be what it tells us about the deterioration in the quality of economic policy making in Australia.

    Go figure.

  54. Stuart John Pearson

    The majority of Australians are in the $37,000 p.a. to $80,000 p.a. tax bracket for PAYG. I was informed of this matter at a Superannuation Seminar. Add to this the poor under $37,000 this make a joke of providing the corporate elite a tax relief for company tax only benefits the rich CEO’s Chairpersons and Directors on the ASX 200 companies. Tax Relief at the expense of the majority of the population. Plus reduces the chances of the Federal Government providing a reduction in its debt. No wonder this article is bagging Scott Morrison Federal Treasurer and the Finance Minister.

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