Opposites

[Jovial Monk]

And "lalalalala can't hear you lalalalalala" goes LOW_IQ

And here is another fact:

Keating made major reforms to the economy, like floating the dollar which allowed us to sail through the Asian Meltdown. Tip did nothing, not even the GST, that was Howard's idea and incompetently designed by Nick Minchin, Finance Minister.

[White Indigene]

Eloquent language there. Lack of facts tho.

Youre a lack of fact.

[White Indigene]

Tip did nothing, not even the GST, that was Howard's idea and incompetently designed by Nick Minchin, Finance Minister.

Yeah Yeah

and the GST was gonna sink the nation.

Note to Left; Leftoids in NZ sunk the economy under Madam Leftoid.

Here it produced widespread benefits, sorry for the howling Leftoids.

[JW Frogen]

And "lalalalala can't hear you lalalalalala" goes LOW_IQ

And here is another fact:

Keating made major reforms to the economy, like floating the dollar which allowed us to sail through the Asian Meltdown. Tip did nothing, not even the GST, that was Howard's idea and incompetently designed by Nick Minchin, Finance Minister.

Actually, as the Asian Meltdown started as a currency crises, a floated currency made Australia more vunerable, it was just our other economic fundementals were improving and China, (the main engine of our resource economy) did not have a floated currency, this made them almost immune from the crises.

The first Asian country to recover that did suffer from the crises was Malaysia, and this is because they took their currency out of trading, or rather penalised trading through taxing currency flows, essential temporarily suspending a floating currency.

[Leftofcentresalterego]

I agree that China was largely immune from the Asian meltdown due to it's old-fashioned non-floating currency and that being a big buyer of our resources was good for us, and that what Malaysia did with the ringgit aided their recovery.

But a floating currency is good for us. If the government is promising to exchange it's own domestic currency of issue for gold or a foreign currency then the government is no longer really sovereign in it's own currency.

[Jovial Monk]

And with exporters in trouble our dollar went down which enabled our exporters to sell our produce cheaper in new markets. One bright spot we have ATM is that with our 25% lower dollar rural exports are one of the bright spots in a gloomy economic circumstances.

A lot of the prosperity Australia enjoyed over the last 20 years is due to the Keating reforms: the Howard govt made no major reforms of any consequence. In fact, the C/w govt increased its share of tax revenue relative to GDP at the expense of the states, causing all sorts of problems. But Howard was happy, more money to buy elections.

[White Indigene]

In fact, the C/w govt increased its share of tax revenue relative to GDP at the expense of the states, causing all sorts of problems. But Howard was happy, more money to buy elections.

Yeah Yeah

round and round you go. In an ever decreasing circle no doubt.

Watch you dont disappear.

Its a characteristic of the Left to make day seem like night, and the dark side seem all comfy. Weird, to say the least.

[JW Frogen]

But a floating currency is good for us. If the government is promising to exchange it's own domestic currency of issue for gold or a foreign currency then the government is no longer really sovereign in it's own currency.

I think you have it backwards; floating a currency renders it under less control of the government and more in the control of international market perception. Controlled currencies, tied to either gold or set ratios to the value of other currencies (China's preferred control option) allow for more government control, or manipulation, depending on one's preference.

But floated currencies are an act of government abdication and faith in markets.

[Leftofcentresalterego]

It actually frees up fiscal policy from the situation where a fixed exchange rate caused government to have to use monetary policy to defend that exchange rate. Fiscal policy would push economic growth along which ultimately increased imports, putting pressure on the exchange rate. The central bank was then obliged to contract the economy to reign in imports so as to maintain the agreed parity. So it was a stop-start-stop-start situation.

A floating currency frees government from this situation, allowing (if it chooses) to engage in it's own domestic spending as it sees fit without having to worry about this situation. It is also benificial for the reasons JM has layed out.

[Jovial Monk]

Left of centre:

As I said before Mantra, the money for the deficit does not have to be found anywhere. The debt voluntarily undertaken by bond issuance is something separate (though related by policy – interest rate targeting).

Think hard and then tell me where you think Australian dollars come from. If no one can create them, how did they get here? Did the Almighty make them from the dust of the ground? And if no one can make them, how has the supply grown as the country has grown? We are running a $1 trillion economy. Go back to say, 1970 and see what size it was then. How is it that there are more Australian dollars now then there were then? Did we get them from trade? Did other countries print their own Australian dollars and buy our dirt and farm produce with them? If no one can produce them, there would be a fixed, unchanging supply, no?

Can you accept that there is a currency monopolist (the federal government) who is empowered to create Australian dollars?

That there can be no NET addition to the absolute sum of Australian dollars in existence until the Australian federal government spends more than it taxes (runs a deficit)?

That we ran deficits for many years at a stretch coupled with strong economic growth, relatively low inflation and very low unemployment?

That there is ZERO need for the government to abolish the army, the aged pension or any other kind of it’s own domestic spending in order to pay for anything in Australian dollars since it is the only legitimate source of Australian dollars and may create them as it sees fit.

That policy choices are shaped to a fair extent by public opinion, irrespective of whether or not a widely held opinion is correct – if I believed that government deficit spending was wasting my money and would burden my children with debt (it does neither) then I would vote them out at the next election <we would all be happier if the government did not publish it’s accounts>

That running a deficit when economic growth is anything other than very strong (it may be less than 1% of GDP) is good and that trying to run a surplus budget when we are in recession would reduce the economy to rubble.

And trying to keep the budget balanced in the 1930s meant we had the worst/deepest/longest Great Depression.