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Of Fairy Tales and Sea Stories

The Intergenerational Report has been roundly condemned by most sections of the media, mainstream and social. Edward Eastwood throws in his two cents worth by re-blogging an old post which first appeared on his own site; The Mugwump Post

sea_stories_192202_v1_n1 Do you know the difference between a Fairy Tale and a ‘Sea Story’?

A Fairy Tale begins with the words; ‘Once upon a time’ and a ‘Sea Story’ usually begins with the words; ‘Now, this is no bullshit!

For readers who may be unfamiliar with the genre of a traditional Sea Story; these were novels written around the late 19th and early 20th century by authors such as Jack London (The Call Of The Wild, The Sea Wolf ), or Rafael Sabatini (The Sea Hawk, Scaramouche), and whose hero’s were rugged individuals and decent Christian chaps with a sense of fair play, laughing in the face danger, and always quick to defend a maiden in distress.

Yesterday, Treasurer Joe Hockey spun the Sea Story to end all Sea Stories – the Intergenerational Report.

Before we get to that however, let’s start with the fairy tale which had its beginnings in 1996 with the election of the Howard Government and similarly to traditional fairy tales, used metaphor to convey its message.

“Black holes!” “Balloning deficit and debt!” “The deteriorating state of the Budget!”

Treasurer Peter Costello shrieked these mantras ad infinitum in his efforts to convince the electorate that the Howard government’s agenda to destroy the foundations of Social Contract and replace them with a Neo-liberal ideology of ‘austerity’ and ‘free markets’ under the guise of ‘economic rationalism’, was not only good for one and all but was also an absolute necessity to escape an impending doom.

The metaphors were deliberately chosen to convey images of collapse, of loss of control, of illness that required immediate emergency surgery.

Government spending became ‘living beyond our means’ and the wicked step-mother of the previous government had ‘spent like a drunken sailor.’

Only Prince Peter with his magic formula of ‘Budget Surplus’ could awaken and restore the Sleeping Beauty of the economy to its rightful glory.

Armed only with the weapon of ‘working families’, Prince Peter fought valiantly in the dark woods of ‘welfare dependency’ to save the electorate from the awful fate of having ‘unsustainable debt passed on to future generations.’

Triumphant at last, Prince Peter declared that the magic formula of Budget Surplus had indeed saved the day and the paragon of Australian culture, ‘working families’ were ‘now better off than they’d ever been.’

The Howard Government was able to sustain the fairy tale for two terms but as children grow older and require more sophisticated tales, so too the electorate began to notice that in fact only a certain strata of ‘working families’ were reaping the benefits of ‘Budget Surplus’ while increasing numbers of them were being forced into the deep dark woods of ‘welfare dependency’.

A new narrative was needed in order to forestall close scrutiny of Prince Peter’s magic formula. The fairy tale needed to morph into a Sea Story.

Prince Peter became the faithful First Mate under the captaincy of ‘Honest John’ whose steady hand on the helm steered the good ship Australia through the stormy seas of ‘union corruption’ and ‘Un-Australianism’, the latter being a reference to any member of the Opposition who dared question the ship’s course.

Few did, and the Opposition limited itself to the occasional faint cry of ; ‘Yeah, we’d do that too …’ but in main they stayed silent and allowed themselves to be cast in the role of scurvy Socialist knaves who, at the first opportunity would seize the ship and plunder the treasure of Budget Surplus to their hearts content and therefore ‘burdening our grandchildren with a mountain of debt.’

Is this beginning to sound familiar? But let’s move on to Chapter Two.

The skipper Cap’n John, resplendent in his baggy green cap, navigated the heaving seas of economic uncertainty with his trusty First Mate, Mr. Peter at his side.

Together, they steered the ship of state through perils that would shrink any ordinary politician’s testicles to the size of frozen peas.

By Christ, it was manly stuff!

It was also complete and utter bullshit.

In the case of the Abbott Government, the fairy tale has been forgone in favour of the ‘Sea Story’.

The same cliches and tired metaphors have been dusted off and endlessly repeated and save for a minor re-working of character, the plot hasn’t changed.

Cap’n Tony, a crusty tar soaked in brine, sails the seas of economic uncertainty with his loyal ship mate ‘No-dough’ Joe, the fat controller with N.F.I. who dances a Hornpipe and earnestly tries to convince the electorate; ‘Now, this is no bullshit!’

The only new metaphor added to the narrative is that of ‘heavy lifting’, to carry the image of the ‘tough choices’, ‘hard work ahead’, and the need for ‘all hands on deck.’

As sea stories go, this one is far less Billy Budd and far more Sponge Bob Squarepants.

The reality behind the metaphors both old and new, is simply and factually the following;

“Budget Surpluses are good, Budget Deficits are bad.” Budget deficits are neither good nor bad.

In accounting terms, they represent the non-government (private sector) surplus.

In behavioral terms, they are required when the spending intentions of the non-government sector are insufficient to ensure full utilization of available productive resources.

Budgets are simply the vehicle to achieving socio-economic goals rather than an end in itself.

“We cannot in all conscience leave a mountain of debt to our children.”

There is no such thing as inherited or inter generation debt! Each generation can consume only the goods and services it produces.

“The government budget faces the same constraints as a household or business.”

This is the big lie that underpins the selling of neo-classical economic theory so beloved of Neo-liberalism.

Households and businesses are the users of currency and must finance their spending.

A household or business cannot spend indefinitely, due to the risk of unsustainable debt!

A sovereign government is the issuer of currency and must first SPEND before it can subsequently tax or borrow.

“We’re running out of revenue!”

A currency issuing government such as Australia can never be revenue constrained in the technical sense, and can sustain deficits indefinitely without risk to revenue!

All of the above are the foundation principles for any economic theory, be it Neo-Classical, Keynesian, or any other school of thought.

They are to economics as the circulatory system is to Medicine, or the right angle to Building and Architecture.

Anyone, particularly politicians or economic ‘experts’ (especially those in the MSM), who are adherents to Neo-liberal philosophy or Neo-Classical economic theory and argue otherwise, are simply telling ‘sea stories’.

Hockey’s ham fisted attempt at whipping up scare tactics in order to place pressure on the Senate to pass his budget was laughable as a even a quick glance at social media or even the MSM will confirm.

When well-known Communist front men such as Alan Kohler term the report as fanciful, you know that the Treasurer is simply spinning another sea story.

And that’s no bullshit!


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  1. deknarf

    Sock it to ’em Edward! 😉 There’s probably a sea shanty in this one! 😉 Probably starts; “Twas on the good ship ‘Bullshit’!

  2. jimhaz

    [A currency issuing government such as Australia can never be revenue constrained in the technical sense, and can sustain deficits indefinitely without risk to revenue!]

    Hitler used this to gain power, then went to war to avoid paying it off.

    Although I am fairly certain what you infer is crap, the US does use this strategy. As they do it, supposedly as the US dollar is the “gold standard” and printing money to them just means higher import costs (except that as the US is dominant other smaller countries adjust accordingly as investment money flows in, making their currency rise and leading to a decrease in exports), but other countries do not, then one wonders if the world is really actually controlled in the background by some group. Something that has always worried me about Keating is the floating of the dollar – my appreciation for his intelligence may be wrong. I sort of see it as a way to open up Oz to the fraudulent machinations of other countries.

    I do know it is crap though, as other countries would surely be doing just what you indicate. The proof is in the fact they do not.

    You have not actually said anything other than made statements we are supposed to accept. You are definitely not telling the whole story, such as the loss of international purchasing power in printing cash, making imports more expensive and in doing so lowering the standard of living.

    I will continue to ignore this free lunch stuff.

  3. john o'callaghan

    This is a great and funny article.i enjoyed reading it. Well done.”

  4. edward eastwood

    @ jimhaz; Oh really? How about Norway or Japan? Furthermore, the US has been running deficits since 1776, long before the US Dollar became the ‘gold standard’ as you put it.

    As for ” saying nothing other than making statements we are supposed to accept” where does that leave Joe Hockey?

    Don’t take my word for it though, try the following links to dispel your doubts.

    Taxpayers do not fund anything

    Deficit spending 101 – Part 1

    @ Deknarf; Domo, D-san.

    @ john o’callaghan; Glad it raised a smile John, although I would have to work very hard to even approach the lofty heights of the rib-tickler that the Treasurer delivered yesterday.

  5. Dandark

    Edward I wasn’t sure what was more funnier this week,
    The big announcement that The gig for International Womens Day
    would be held at an all male members club or
    Joe and his graphs and his IGR and his bag of bullshit,
    so when does their”‘good Government” start, I thought it was a couple of weeks ago,
    it wasn’t 18 months ago thats for sure
    I actually rang Captain Chaos’s office today, and said to woman on the other end of phone
    “when I heard the big announcement made by Tones and Co that IWD will be held at an only male members club this year I thought it must be Aprils fool day, but its not, so the Jokes on Tones he is such a “mug” hey,and tell him he can jam his ironing board and his all male club up his ass”……… 🙂

  6. CMMC

    Its a warped form of Malthusian projection, and it further compounds the fallacy about ‘leaners and lifters’.

    ‘There were 7 taxpayers for every pensioner in 1970 and we expect that ratio to become only 3 taxpayers per pensioner’.

    Well guess what, you fat blowhard, EVERYBODY IS A TAXPAYER, from cradle to grave you pay Howards tax on everything.

  7. Phi

    That was a thoroughly swash-buckling read Edward – and I learnt a bit along the way. I wonder if Hockey is immune to ridicule – he certainly has enough stashed wealth and guaranteed government perks for life to help inoculate him. Then again, ridicule really can cut through even the most steely disposition. I do hope so because he gives me the shits.

  8. The AIM Network

    @ Phi; Thanks Phi. Better buckle your swash, because I’ve got the feeling that we’re all going to hear lots more ‘Sea Stories’ before the term of this government is finished.

    @ CMMC; Joe and Tom Malthus have a lot in common CMMC, they’re both from the same era.

    @ Dandark; I’m sure that the all male club would probably fit Dandark, not too sure if you could jam an ironing board in there as well though….

  9. Harquebus

    Households and businesses are the users of fiat currency and must finance their spending.
    Governments have the luxury of printing fiat currency which, debases it and erodes incomes and savings in the process. In other words, theft.
    For the first time in history, all currencies are fiat and throughout history, there has never been a fiat currency that has not returned to its intrinsic value. None, zilch, nada, etc. Our society is working hard for what will ultimately be, nothing.

    “All paper money eventually returns to its intrinsic value. Zero.” — Voltaire.

  10. edward eastwood

    @ DanDark; Gosh DanDark, he sounds so convincing. All that was missing was the part where “they and they all lived happily ever after.”

  11. DanDark

    Edward, I was waiting for the “Once upon a time” where every good fairy tail starts
    Convincing was one thing he wasn’t, it was conniving, cunning, contrived, contorted and total Crap
    The hand actions got me, the concerted effort to pull them in and put them forward constantly.
    His acting abilities are of the same standard as Ronald Reagans and that is zilch…

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