http://www.howtotalktoyourliberalmate.com.au/#budget2015 -- Sent from my Samsung Galaxy Note 3 with K-9 Mail.
Russell Coker wrote:
Perhaps it could be added that unlike the budget of a person, household or ordinary company, where a deficit is unconditionally undesirable; the budget of a government, particularly a national government, in some ways resembles a bank. Where the business model is not zero deficit; rather the idea is to have maximum 'borrowings' (the depositors funds); and to maximise lendings of those at as high a differential rate as possible. In the case of a normal national government, which can't just print money to cover the deficit (eg 'quantitative easing' in the USA), they must issue bonds (ideally at the lowest rate possible). Apart from the provision of services, I would imagine the aim would be to spend money where possible, in ways that would maximise economic returns and thense tax revenue, with respect to the cost of the interest on those bonds ? regards Rohan McLeod
On Tue, 1 Sep 2015 14:18:03 Rohan McLeod wrote:
Russell Coker wrote:
Perhaps it could be added that unlike the budget of a person, household or ordinary company, where a deficit is unconditionally undesirable; the budget of a government, particularly a national government, in some ways resembles a bank. Where the business model is not zero deficit; rather the idea is to have maximum 'borrowings' (the depositors funds);
The aim for a business is to borrow as much money as they can invest to make more money while not taking excessive risk. The aim for a household is to borrow money for major investments such as buying a house or car. It's expected that most families will have mortgages at some time. As an aside the interest on a mortgage is lower than on most other loans so using a redraw facility on a mortgage to fund all other purchases is becoming quite common. -- My Main Blog http://etbe.coker.com.au/ My Documents Blog http://doc.coker.com.au/ -- Sent from my Samsung Galaxy Note 3 with K-9 Mail.
Playing a devils advocate;-) Having decades of unbalanced cash flow is not healthy either. If I have to borrow _more_ money every year, I will come into trouble, sooner or later. Greece is an example for it, at one point the lender is not willing to risk more if he fears that his money will never return. (BTW: That is a risk for the lender.. he makes money by taking the risk so I do not think he needs my compassion if it does not work out once in a while) Anyway, Australia is not Greece(yet). But it forgot to use its good run to improve the balance, and invest in its future. Regards Peter
On Thu, September 3, 2015 10:17 am, Peter Ross wrote:
Playing a devils advocate;-) Having decades of unbalanced cash flow is not healthy either. If I have to borrow _more_ money every year, I will come into trouble, sooner or later.
The traditional Keynesian approach for governments was spend when the private sector is doing poorly, and save money when the private sector is doing well. In part this was replaced by neo-Keynesian "tax and spend" approaches which, rather sensibly, suggested that the public sector could remain in debt as long as its expenditure was on various infrastructure that, through enhancing positive externalities and mitigating negative externalities, increased aggregate wealth. The biggest problem with this is of course ensuring that governments make the *right* investment decisions.
Anyway, Australia is not Greece(yet). But it forgot to use its good run to improve the balance, and invest in its future.
Whilst our total debt is quite high, most of this is (or rather was) private debt. The public debt was a relatively small percentage of the total debt. I must confess that I have checked this recently - I have the horrible suspicion that this situation has changed somewhat under the current Federal government. -- Lev Lafayette, BA (Hons), GradCertTerAdEd (Murdoch), GradCertPM, MBA (Tech Mngmnt) (Chifley) mobile: 0432 255 208 RFC 1855 Netiquette Guidelines http://www.ietf.org/rfc/rfc1855.txt
On Thu, Sep 03, 2015 at 09:17:56AM +1000, Peter Ross wrote:
Playing a devils advocate;-) Having decades of unbalanced cash flow is not healthy either. If I have to borrow _more_ money every year, I will come into trouble, sooner or later.
Greece is an example for it, at one point the lender is not willing to risk more if he fears that his money will never return.
(BTW: That is a risk for the lender.. he makes money by taking the risk so I do not think he needs my compassion if it does not work out once in a while)
a little known fact about the greek crisis is that greece has actually paid back over a trillion dollars servicing that debt. the creditor nations have well and truly got their money back several times over so could easily afford to forgive the debt without asset-stripping the nation and impoverishing the greek people. instead, most of the "bailouts" go back to the creditors as debt installment payments, plus they inflict austerity measures on greece forcing them to destroy public services, and privatise utilties and tourism assets.
Anyway, Australia is not Greece(yet). But it forgot to use its good run to improve the balance, and invest in its future.
that wasn't "forgetting". that was the deliberate policy of the Howard govt, which was desperate to find ways to uselessly get rid of the enormous surpluses being generated by the mining boom, so that they wouldn't have to provide useful services or build useful infrastructure or keep some in reserve for when the boom inevitably ended. some of it went to vote-buying exercises like the baby bonus, but much more just got pissed away for ideological reasons. Tax cuts for the rich for example. And instead of spending more on medicare or expanding medicare to cover dental care, they subsidised private health insurance by 30% and forced people onto private health insurance by allowing insurance companies to charge a premium of 2% per year over 30 years of age that you weren't a subscriber, and an extra medicare surcharge if you earned over IIRC about 60K and didn't have private insurance. what happened in greece and what happened here in australia are the inevitable results of free-market theology ideologues who hate government and government services. craig ps: i'm a "beneficiary" of the private health insurance subsidy, i was forced onto it by the medicare surcharge (i.e. i acted as i was supposed to act and thought "if i'm going to pay extra anyway i may as well get some benefit for the extra payment"). As it turned out, i ended up with serious medical problems and have made significant use of that insurance BUT i still think the subsidy was wrong...wrong in every sense - politicially, societally and morally. The money (billions per year) *should* have gone into medicare, not into subsidising private health insurance. and, in any case, the benefit of the subsidy has been more than wiped out by regular increases to premium prices of around 5+% pa (which also increases the subsidy paid by the govt) -- craig sanders <cas@taz.net.au>
Craig Sanders wrote:
On Thu, Sep 03, 2015 at 09:17:56AM +1000, Peter Ross wrote: what happened in greece and what happened here in australia are the inevitable results of free-market theology ideologues who hate government and government services.
So would you go as far as agreeing with me that : The Free-Market Ideology of zero or minimal regulation; amounts to pathetic, irresponsible, economic fatalism ? regards Rohan McLeod
On 2015-09-03 02:12, Craig Sanders wrote:
On Thu, Sep 03, 2015 at 09:17:56AM +1000, Peter Ross wrote:
Playing a devils advocate;-) Having decades of unbalanced cash flow is not healthy either. If I have to borrow _more_ money every year, I will come into trouble, sooner or later.
Greece is an example for it, at one point the lender is not willing to risk more if he fears that his money will never return.
(BTW: That is a risk for the lender.. he makes money by taking the risk so I do not think he needs my compassion if it does not work out once in a while) a little known fact about the greek crisis is that greece has actually paid back over a trillion dollars servicing that debt. the creditor nations have well and truly got their money back several times over so could easily afford to forgive the debt without asset-stripping the nation and impoverishing the greek people.
Do you have a source for that trillion? I've been following the crisis fairly closely and haven't seen anything like those figures. Debt forgiveness for Greece entails transferring their austerity to the other nations in the €-zone, some of which are poorer than Greece.
instead, most of the "bailouts" go back to the creditors as debt installment payments, Well, that's what it's for.
plus they inflict austerity measures on greece forcing them to destroy public services, and privatise utilties and tourism assets.
What they're mainly doing is forcing them to implement the reforms they agreed to in the previous two MoAs, but never carried out. "Austerity" in Greece today means "living within your means". The only alternative to austerity is to keep borrowing, but no-one will lend to Greece so austerity is inevitable; it's not "inflicted" by anyone. Successive Greek governments cooked the books to get into the Euro, then kept cooking to borrow at unsustainable levels. The "Troika" have certainly made blunders but they didn't cause the crisis; Greece did that all by itself. The private banks took a 50% haircut (a huge debt forgiveness) and the balance of the debt was taken over by the EU (& IMF to a lesser extent) at incredibly generous rates and with maturity pushed out decades (also in effect a debt forgiveness). Greece as an innocent victim of evil bankers is a myth; they did it to themselves through corruption, clientelism and endemic tax avoidance. [SNIP ... not up to date on the state of AU] Anders
On Thu, 3 Sep 2015 03:55:31 PM Anders Holmström wrote:
What they're mainly doing is forcing them to implement the reforms they agreed to in the previous two MoAs, but never carried out. "Austerity" in Greece today means "living within your means". The only alternative to austerity is to keep borrowing, but no-one will lend to Greece so austerity is inevitable; it's not "inflicted" by anyone.
Successive Greek governments cooked the books to get into the Euro, then kept cooking to borrow at unsustainable levels. The "Troika" have certainly made blunders but they didn't cause the crisis; Greece did that all by itself.
There are bankruptcy laws to protect individuals and corporations that borrow more than they can repay. If it gets to the stage where a country can't be effectively run while repaying debts then there should be similar bankruptcy protections in international agreements. When banks lend money to individuals and corporations they know about the possibility of bankruptcy and do appropriate investigations to ensure that the probability of default is low. If they were forced to perform the same investigations on countries then perhaps Greece wouldn't have been permitted to borrow so much money and there would have been a smaller crisis years ago instead of a big one now. Also there's the concept of odious debt. If banks lent money that they knew to be for corrupt purposes (IE not benefiting the citizens of the country) then they should not have a right to claim repayment from the citizens (IE general revenue of the country) but instead from the corrupt people who received benefit from the money.
The private banks took a 50% haircut (a huge debt forgiveness) and the balance of the debt was taken over by the EU (& IMF to a lesser extent) at incredibly generous rates and with maturity pushed out decades (also in effect a debt forgiveness).
How nice for the banks that they could lend money to a country that is unable to repay them and then the EU stepped in to guarantee the loans. It saved them from the effort of determining whether the loans could be serviced and ensured that the bankers got their bonuses. A better resolution would be to cancel the debts, sack the bankers who authorised the loans, and then have the banks (or the banks' creditors) sue the ex-bankers for the lost money. -- My Main Blog http://etbe.coker.com.au/ My Documents Blog http://doc.coker.com.au/
On Thu, 3 Sep 2015 10:12:08 AM Craig Sanders wrote:
instead, most of the "bailouts" go back to the creditors as debt installment payments, plus they inflict austerity measures on greece forcing them to destroy public services, and privatise utilties and tourism assets.
The problem here is the usual neo-liberal plan to cut services for the majority of the population to preserve tax cuts for the rich. The way it's implemented differs in that countries with effective government (such as Australia and to a lesser extent the US) have to actually cut taxes for the rich while poorly run countries like Greece just allow corruption to avoid the tax system. A land tax would be a good thing to consider for a country with serious corruption problems. People can easily hide away large sums of money if they Greece (sic) a few palms, but hiding land is much more difficult - when land tax isn't paid the land can be seized and sold. The rich people in Greece are being very stupid about this. Currently Greece is a hot-bed of right-wing extremism. If a lawful democratic government can't get enough funds to effectively manage the country then they may end up with a despot who just confiscates the propety of people who disagree with them. Greece is definitely the most likely EU country to get a neo-nazi government in the near future. -- My Main Blog http://etbe.coker.com.au/ My Documents Blog http://doc.coker.com.au/
Hi Rick,
Greece is definitely the most likely EU country to get a neo-nazi government in the near future.
Is Hungary out of the competition on grounds of already having one?
I do not see too many differences between Victor Orban's beliefs and actions and Tony Abbott's and his men (and the only woman). To say "we help, we do more" by _not_ increasing refugee intake is brilliant spin. To announce that we help by increasing bombing is brilliant too. And they help to prevent death at sea by building torture camps, exposing women to rape, and threaten people with jail if they report about it. BTW: Germans are starting to ask the Americans to foot some of the bills because of their role in destabilizing the region. That has all nothing to do with Australia's foreign or domestic politics, of course. Regards Peter On Mon, Sep 7, 2015 at 3:57 AM, Rick Moen <rick@linuxmafia.com> wrote:
Quoting Russell Coker (russell@coker.com.au):
Greece is definitely the most likely EU country to get a neo-nazi government in the near future.
Is Hungary out of the competition on grounds of already having one?
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participants (7)
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Anders Holmström -
Craig Sanders -
Lev Lafayette -
Peter Ross -
Rick Moen -
Rohan McLeod -
Russell Coker