Monday, 14 April 2014

Is there excessive spending in Australia?

Yes dear lonely and only reader we have looked at this topic a number of times but since I heard quite a bit about this yesterday in the media I thought I might go over the topic again.

There are a number of problems of believing there is excessive Government spending in Australia.
1) The Structural deficit. We examined that here. The major reasons for the structural deficit has to do with revenue. Indeed whatever problems there were on the spending side have been addressed.
2) Spending in nominal terms fell in the last completed budget of Wayne Swan. Thus if spending is a problem then we would have seen a huge increase in the current budget. In the latest MYEFO documents this is nowhere to be found. The only increases in expenditure since PEFO have come from the current Government ( they almost doubled real spending)and they have been political to make the current budget look 'bad' and future budgets look good..In other words accounting tricks.
3) Cash rates are 2.50% and have been there for some time.The market is expecting future cash rates to FALL! If there was excessive spending then they would be rising and the market would be expecting rises in the future.
4) Nominal GDP is forecast to be 3%. If there was excessive spending it wouldn't be so low.

I might just add in finishing revenue as a % of GDP is forecast to be 23.1%. ( It will probably be a tad higher). It was never at these low depths in the Howard years!

Sunday, 13 April 2014

Bigotry and Racism?

In a quite extraordinary outburst this author outs himself on the topic if Israel and Palestine.

the key sentence is thus. Note what  the author does not say
'Simply astonishing that some people think that Jews, uniquely in the world, shouldn’t be free to live where they choose. '
Note the author does not say there are any disputed territories at all. One can only conclude he believes that it is all Jewish territory moreover only Jews should live there.
It is just unlucky if you are an Arab- Israeli or a Palestinian.

Bigotry is defined thus 'stubborn and complete intolerance of any creedbelief, or opinion that differs from one's own.'
Hence we can conclude the Author is clearly and apologetically a bigot.

Racism is defined thus
'a belief or doctrine that inherent differences among the various human races determine cultural  or individual achievement, usually involving the idea that one's own race is superior and has the   right to rule others.'

I do not think the Author should be given the benefit of the doubt given his history nor his unwillingness to intervene when clearly such comments are made by others here thus the Author is clearly a racist.

No wonder he wants the RDA changed !

Toni Childs

Toni Child's voice simply grated on me however there is one song she sings to perfection.

Nice array of animals as well.enjoy

Thursday, 10 April 2014

Around the Traps 11/4/14

It is time for Around the Traps again.

Refereeing on Saturday and watching my boys and we have guests over on Sunday so I will try to update at some time.


Northern America

Andrew Gelman (Mainly Stats)
Dave Giles (Econometrics)
Dianne Coyle (Quirky + Book Reviews)
Vox wonk

Wednesday, 9 April 2014

I wish Joe Hockey was consistent

I still cannot work out Joe Hockey.

Is he going to bring down a contractionary budget or not?
One minute he says he is and then the next he says that would lead to lower economic growth. ( He is probably right there.)

As far as I am concerned given nominal GDP is forecast to be 3% then imposing a contractionary budget on top of this would be crazy. Ricardian Ambivalence is in favour of this but would want monetary policy to offset fiscal policy.
I am a little sceptical about how much monetary policy could do this under present conditions.Thus I think the risks are too great.
I would let the automatic stabilisers do their job and impose contractionary fiscal policy when the economy will benefit from it.

We will find out next month but I do wish Joe Hockey would cut out his mixed messages.

Monday, 7 April 2014

the WA Half Senate Re-Election

I guess it is time for a comment on the WA Half Senate re-election.
( A by-election only occurs when a person or persons resign or retire. This did not occur here. People in WA had to vote again for the Senate.)

I am not going to comment too much as I live far away from WA. Obviously people voted against the two major parties. it beats me how any sane person could vote for either the Greens or the PUP.

I am somewhat amused by various commentators suggesting one of the reasons for the poor vote for the ALP was the No1 person on the ticket.
Why didn't some-one, anyone suggest it was the No2 person on the ticket. Afterall people knew buggerall about her until a certain speech was leaked. Once they knew her 'strange' circumstances why didn't anyone think people might vote against that candidate.
No-one but no-one has any evidence for any speculation yet it was all one way.
How very politically correct.

Here is one comment. on the result ( almost) I will post further comments if I see any.

Sunday, 6 April 2014

When we lose a loved one

Steve from Brisbane recently lost his mother.

She was in her eighties ninety and for most of her life was as sharp as a tack. Unfortunately she recently acquired Alzheimer's disease.
This is a terrible experience. People who lived as intelligent people decline to feeble people who do not recognise you.

Both my Father and my wife's Father have died. In both cases I was sad but glad. They had lived wonderful vigorous lives but at the end were people who I sometimes could not recognise.
I admit to shedding many a tear after seeing either because of this.

On the other hand I didn't shed any tears at their funerals.

Life can be very hard to explain at times.