"While in general voters expect governments to keep promises..."

and governments expect not to keep them

" that doesn't hold when they think that keeping a promise would be stupid."

I think that cuts both ways. Keynesianism is stupid, as much as believing that we can make society richer by printing money, or by digging holes and filling them in again. The pink batts fiasco is an example of Keynesianism at work, as are the economic crises in the USA and Europe. The problem is not just that Keynesianism doesn't work. It's that it actively produces worse results than would obtain in the absence of monetary policy.

Peter Hume is right - Keynes has no credibility since the GFC and the failure of "stimulus". The horse is dead and flogging should cease.

This government has taken us from a $20bn surplus to over $50bn debt in just four years. Unless it gets control over its own budget, we'll end up like the EU and US. That's political suicide, as shown by Greece, Spain, Italy, etc, and more to come (perhaps including Obama). Labor might enjoy spending other people's money, but they can see a political cliff when it's ahead

I believe the government will manufacture a surplus even if is $1, all for a political game of electioneering.

We will see the greatest redefining of parameters, we will see things hidden, promised for later, deferred and money shifted all over the place, that we will not discover till after the election is all fabrication and sleight of hand.

The ALP wants power, at any cost and they have made it clear their election promises are worthless, more-so than the usual electioneering promises.

They do however want to be able to negate the Coalition's campaign on financial management and if they go in with yet another deficit they are toast, but if it is a surplus, then that will be the entire basis of the election campaign .. fiscal management.

Cynical maybe, but there is no substance to the ALP whatsoever anymore, it is all about power internally and externally.

There are no morals or ethics and if they get back in, seriously we deserve them. A wastrel precious party that cannot abide criticism, cannot abide dissent or any disagreement and imagines it can stage manage a win.

They are so used to power being mainly former union powerful people who are not used to being questioned and do not understand why they are unpopular, so blame it on the messengers, like News Ltd, who they hope to silence.

Then use more of taxpayer's money to tell us what we should think and to discourage criticism of any kind. It gets more like the old Eastern Europe every day in Australia. (I wonder if the proposed internet filter will also censor Australian sites, it seems too big a temptation not to use .. and who would disagree? Fairfax, the ABC .. of course not)

I certainly hope they are wiped out before they completely destroy our working and manufacturing base with stupid pick a winner programs and endless spending.

The budgetary gymnastics are breathtaking, but hardly questioned by the media, who are all in awe or fear of their retribution, a mean and tricky mob for sure.

One wonders how it is that such a piddling surplus means anything at all, except perhaps as a vacuous symbol of the Government's economic sobriety and faux conscience.

Peter,

On the subject of Keynesianism, the term "privatised Keynesianism" has been coined to describe a process whereby governments implement austerity measures by shifting the debt burden from itself onto the public in the form of easier access to credit by private citizens. This encourages and enables citizens to plunge into a regime of unrepayable debt - as happened with subprime mortgages in the U.S. before the GFC.
As it stands at present, to use the U.S. for example, total debt per U.S. citizen is $174,122 - per U.S. family its $659,656...savings, on the other hand, are a mere $7,373.
Western private debt and public debt mirror each other...the whole capitalist paradigm exists in a cocoon of spun debt...wonder what will emerge from it?

Poirot
"As it stands at present, to use the U.S. for example, total debt per U.S. citizen is $174,122 - per U.S. family its $659,656...savings, on the other hand, are a mere $7,373."

Wow.

"Western private debt and public debt mirror each other...the whole capitalist paradigm exists in a cocoon of spun debt...wonder what will emerge from it?"

Yes. Presumably in the end the debt will not be repaid, those who lent to government will take a haircut which perhaps is as it should be, since they had the benefit from government trying to saddle future generations with the debt.

But the worst ravages are what it has done to society and the economy: the inflation, the rising prices, the regressive effect on the poorest, the distortion of the economy into waste and war, the punishment of saving and work, the rewarding of debt, instant grat and political connections, the use of debt to fund unsustainable Ponzi schemes like social security, and the unjust enrichment of the powerful at the expense of ordinary people: in short the debauching of society's value system by debauching its medium of exchange.

And what remedy the Keynesians have to offer - nothing but more money printing!

Both left and right should be in favour of abolishing the central banks, the right for their traditional claim of support for individual liberty, and the left for their traditional claim of support for social justice.

I don't know why you call this mess of centrally planning "capitalist". The lending of money backed by money deposits at the market rate of interest is capitalist. The lending of money unbacked by deposits at a rate determined by government officials is not capitalist, it's socialist, or statist, wealth distribution for socialist purposes like social security, public housing, stimulus packages and other typical socialist policies

(cont.)

However not even socialists ever claimed to stand for the socialisation of the means of *consumption*. The claim was only ever to socialise the means of *production*. They never claimed that everyone should have an equal claim to an apple, or a sandwich, or a shirt - consumption goods. The benefit was always intended to be private; only the means were to be public.

Thus socialism, in its very nature, is a claim for the socialisation of costs and privatisation of benefits. What we're witnessing - government control of the money supply, and handing out a share of the spoils to political favourites - is socialism, not capitalism. None of this would be possible in a free market for money. Involuntary fractional reserve banking would be illegal as fraud, and those wanting the higher returns would have the higher risk, and that's as it should be.

The only mystery is why socialists keep thinking that government is going to do with their grants of arbitrary power what the socialists think government should do. Politicians are not bound by their promises, and officials can get more benefits from banks and rich corporations than they can from poor people.

Do you support abolishing the central banks, and if not why not? Don't tell me you believe they stabilise the economy?