Arjen Lentz wrote:
On 7 November 2014 2:27:53 PM AEST, Russell Coker <russell@coker.com.au> wrote:
Right wing politicians talk about running a country like a company.But their political ideas are just bad business. No responsible CEO would plan for short term profits by cutting off the potential for long term profits. But that's how Abbott et al want to run a country. Speaking as a company owner/CEO, I fully agree with this. A country is neither a household (Thatcher) nor a company. Different scales require different strategies. Macro economics is distinct from micro economics - for real sensible reasons.
There was an interesting interview on RadioNational; where the point was made (sorry can't recall date); that it is not only a question of scale. In some ways running a national economy is more like running a bank, than an ordinary company. Consider the question of paying off or increasing 'debt;' in the form of say buying back and selling bonds. Buying back bonds has the consequence of increasing the amount of money in circulation; the US because of it's role as world banker, is able to just print money and buy back bonds; (which in any other economy would produce double digit inflation !) Selling bonds has the reverse effect; perhaps the real question with this form of goverment debt is; does (or will ) the percentage yearly long term return to the national economy; (from infrasructure development; education etc); exceed the long term borrowing cost; ie bond yield less inflation rate ? regards Rohan McLeod