News is running an article about Howard's economic wrongs written by a guy from ACCESS economics. Economists looking to ingratiate themselves with the new masters are quick to join the grotty media mob uprising against Howardian Royalty. Avert your eyes, scum, and stifle your all too frequent bodily noises in the presence of him with the divine right to rule. Above all, do not touch. Howards' head may lie in a basket at the bottom of a guillotine but it still has more wisdom in it than all of yours put together.
A guy from Access economics, i'm guessing the same guy, was a regular guest on the 7:30 report this year whenever they wanted some favourable comment on interest rates that tarnished Howard. Is ACCESS's core business economic advice or public relations?
I'd love to spend all day calling their motives into question, but I suppose I should attack their rediculous arguments aswell.
This guy's main beef with howard is his spending 'splurge'.
Mr Richardson described the Howard government's spending in recent years as "positively Whitlamesque", saying the Coalition had handed back more than half the China-driven revenue windfall in a series of personal income tax cuts, with the rest directed to increased spending.
My beef is with all these 'experts' who deliberately misrepresent the information they portray. Why do they keep saying that tax cuts are the same as government expenditure? They aren't. One is when the government takes peoples money are spends it elsewhere. The other is when the give the money back, or better yet dont take it in the first place. In the latter option the money is not necessarily spent. The taxpayers might save on invest it- exactly as the government would do if they did not spend it themselves. A tax cut does not necessarily increase demand. Like transfer payments (welfare, childcare rebates etc) they are not counted as spending when calculating GDP, because the money has been given to another person to spend, rather than exchanged for goods and services.
I repeat tax-cuts are NOT government spending. They are the OPPOSITE of government spending. How can he use the world 'splurge' when the government is not taking the money in the first place? (actually it was the journalist that used this specific work, see UPDATE below)
The argument that both tax-cuts and government spending increase demand and inflationary pressure is not an argument for blurring the distincting between the two. I shudder to think what a left-wing government has planned when they are encouraging the electorate to think that giving them money back is the same as taking it away.
This bollocks started with the whinging of the economically-challenged labor-voters about middle class welfare. Why are the people who support the welfare state all of a sudden against this sort of welfare? Because it's a tax cut that's why!!! The people who earned the money are getting it back, so they can spend it themselves, albeit in ways pre-approved by the government. The left believe that the middle class don't deserve to have their money. End of Story. They are re-distributionists trying to overcome the 'injustices' of the past. They want to take your money are give it to people that didn't earn it. The more permanent their lack of motivation the more they deserve your money.
Of course it's not just those are obviously unproductive who will get your money. Other people who appear to be doing something helpful, but aren't are also in the running. People who provide consulting services to the incoming government will recieve big contracts. People like ACCESS economics. They will get paid your money to oversee the process whereby lost more of your money goes into areas that the government thinks it should go (hint: not your wallet).
Before they get your money they have to toe the labor line. They firstly have to explain that all the rate-rises to come are Howard's fault, and nothing to do with Labor's inflationary IR policy. Next they have to help blur the line between governement spending and tax cuts, so you wont notice you are being bled dry. If you get a feeling that you are, you will experience a confusing sensation as the concepts in your brain diverge from the 'variable certainty'. Will you fall foul of the double-think, or will shake off this creeping malaise and get hang on to reality?
Snap out of it, taxpayers! It's not just your cash they want, but your soul!!!
UPDATE: After re-reading the article I can see that at no stage were tax-cuts actually equated with government spending by the guy from ACCESS economics, but in collusion with the journalist that impression was firmly given. 'Splurge' was the world used in the article by the journalist to talk about the combination of tax-cuts and spending. It was used immidiately after these lines:
But he said much of the growth in spending under John Howard had been in areas such as security and family benefits, and the new Government would require political courage to make cuts in these areas.
We see here that 'family benefits' i'm guess thing child rebates and other tax breaks that families get which fall under the middle-class welfare banner outlines above were bunched together. As stated transfer payments are strictly speaking not expenditure in economic sense, in that they dont buy a good or service, although i think they are counted as expenditure by the Aus govt (but not the NZ govt) because they reflect a passing of money away from the govt. That money happens to be going back to the people that earned it. So as I said it's a tax cut or sorts and doubly should not be counted as expenditure in any serious economic analysis.
Analysing the quote above, the equating tax-cuts with spending could have been the work of the journalist not the econmist. The structure of the sentence includes tax cuts as a part of expenditure, then mentions expenditure seperately, as a part-component of itself ?????
Mr Richardson described the Howard government's spending in recent years as "positively Whitlamesque", saying the Coalition had handed back more than half the China-driven revenue windfall in a series of personal income tax cuts, with the rest directed to increased spending.
The rest spending was directed to spending. WTF??? By implication the other spending , the tax cuts, was also spending. Confused?? It looks like the journalist was. I still place the blame firmly on the economist who lead the journalist, and me and the rest of the public firmly to the belief that tax-cuts are govt expenditure are the same, and not opposites as is truly the case. But i'll call the journalist a conman too if you like.
