Hi Saltpetre,

Growth is a tricky one because it bounces around. The USA's current annual growth rate is 1.6% Australia's is 3.1%. But this is volatile.

The other criteria where Australia is clearly ahead of the USA, and most of the rest of the world include:

1. gross national income per capita
2. income disparity
3. employment participation
4. unemployment rate
5. women in the workforce
6. superannuation
7. health care
8. pension levels
9. economic freedom
10. interest rates
11. savings
12. home ownership
13. value of the local currency cf the euro
14. value of the local currency cf the UK pound
15. government 10 year bond rate
16. bankruptcies
17. deficit as a percentage of GDP
18. current account as a percentage of GDP
19. debt as a percentage of GDP
20. balance of trade current
21. balance of trade history
22. foreign exchange reserves
23. international credit ratings
24. overall quality of life

All these are measurable. Comparisons are easy to make - both between countries and between periods of Australia's history.

Sources readily available, if required.

It will be interesting to see what happens to the election campaign in Australia if the serious media starts to look at the economy in some depth, rather than accepting shallow and mendacious nonsense like that offered in this article.

Is it true Julie Bishop is a shadow frontbencher?

Cheers, AA

Alan
Do you assume that the credit for the economy belongs to the government?

Putting aside the fallacy of post hoc ergo propter hoc, what makes you think any positive measure is because of any good the government is doing rather than despite any bad its doing?

Hi Jardine,

It's pretty much accepted by observers outside Australia that you have:
(a) the best-managed economy in the world by a mile,
(b) the best-managed economy in Australia's history, and
(c) the worst media coverage of political and economic issues in the free world.

Hence it's no surprise that most Australian's are surprised at Australia's surprising economy.

It can readily be proven that on all these 26 criteria Australia is now travelling better than in November 2007 when Labor took office:

1. income – GDP per person
2. GNI income per person
3. income disparity
4. interest rates
5. inflation
6. people employed
7. job participation rate
8. personal tax rates
9. company tax rate
10. superannuation
11. health care
12. pension levels
13. personal savings
14. productivity
15. current account deficit
16. current account deficit as a % of GDP
17. international credit ratings
18. economic freedom
19. value of the Aussie dollar cf the US$
20. value of the Aussie dollar cf the euro
21. value of the Aussie dollar cf the UK pound
22. balance of trade
23. industrial production growth
24. foreign exchange reserves
25. overall quality of life

How did this happen?

Most economists credit the extraordinary stimulus packages of 2008 and 2009. Only Australia and Poland in the OECD averted recession.

Before Europe knew what was happening, Australia was tipping cash into households. This was followed by targeted infrastructure expenditure unmatched in the world.

In the early months of the GFC the Government handed out a staggering 3.3% of GDP. Next highest was the USA which allocated just 2.4%. Not enough, it seems. All others were below this, mostly well below. The OECD averaged just 0.7%.

Other governments tried to catch up with more spending later, but too late to avert disaster.

Joseph Stiglitz, the Nobel Prize winner from Columbia University, studied Australia in depth and wrote:

"Rudd’s stimulus worked: Australia had the shortest and shallowest of recessions of the advanced industrial countries."

Stiglitz is not alone. Most economists who have crunched the numbers have reached similar conclusions.

Happy to discuss further, Jardine.

Further to our Banks $19 trillion of Derivative exposure.Not only has the Commonwealth refused to publish their risk this year,the RBA has opened a bail out fund currently of half a $ billion.

Is the RBA preparing to pint money for the banks to help bail them out as in like the US Federal Reserve is doing ? This will depreciate the value of our $ thus our spending power.This if done by us is called counterfeiting or by them the banks, as "quanitative easing."

Please explain.

Hi Alan

“Hence it's no surprise that most Australian's are surprised at Australia's surprising economy.”

LOL.

Still doesn’t get you out of your difficulties, I’m afraid. Adding the fallacy of appeal to absent authority doesn’t fix the problem caused by the fallacy of post hoc ergo propter hoc.

“Most people” and even “most economists” is not a rational argument. Besides, most economists also support central banking, and have you seen what that’s been doing to the world lately? And if you don’t distinguish those with a vested interest in government from the rest, then there’s a conflict of interest right from the outset.

In order to understand the effect of economic causes, there’s a need for sound theory. At the very least, it needs to not be based on demonstrable logical fallacies. Saying someone else somewhere else has crunched the numbers won’t cut it. The reason is because the numbers won’t tell us whether an improvement is *because of*, or *despite* a given policy. There’s a need to demonstrate causality, not mere sequence or correlation.

In fact Keynesian theory intrinsically provides no way of determining whether it’s working or not, because it’s a simple logical fallacy to argue “after that, therefore because of that” which is all Stiglitz et al. have got.

All that you have said pre-supposes the validity of Keynesian theory. However we can’t make society richer by digging holes and filling them in again, and we can’t make society wealthier by printing pieces of paper and stamping official incantations on them, and it’s as simple as that.

Keynes famously said: “Pyramid-building, earthquakes, even wars may serve to increase wealth, if [politicians can't think of] anything better.”

This is the level of nonsense that Stiglitz is defending. According to that theory, the government could have made Australia richer by blowing up a few decent-sized cities. Think of all the “aggregate demand”, think of all the “jobs” we would have created then. Sorry, it’s just sycophantic indefensible rubbish.

Arjay
No argument for central banking is it?

JKJ: so a Nobel prize winning economist has got it all wrong, but you have figured it out. Huh? Can we expect to se you on the Stockholm stage this year?