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From punchbowl to prudence : Comments
By Geoff Carmody, published 14/6/2013Martin Ferguson noted we must grow our pie before we can distribute it. Our slices of pie, on average, are shrinking.
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< Martin Ferguson noted we must grow our pie before we can distribute it. Our slices of pie, on average, are shrinking. >
But, sorry, this terms of trade (mentioned 22 times in this short 785-word article) stuff just doesn’t cut it!
Ferguson’s simplistic note also doesn’t cut it.
We need to stop growing the number of pie-slices!
Only then could they actually become bigger as the economy grows rather than ever-smaller despite rapid economic growth!
How this most fundamental point can be left out of any national (or rational) economic analysis is just beyond me. But it happens all the time.
< Falling terms of trade and a weaker $A are telling us it's well past time the policy switches are flipped more decisively from punchbowl to prudence and productivity. >
And one of the most prudent things to do would be to greatly reduce population growth, for two reasons:
To make it possible for the average pie-slice to actually start increasing and
To stop exerting pressure on all our services and infrastructure, all of which demands enormous expenditure just to keep up the same standard for ever-more people without leading to any significant improvements.
Even if we become wonderfully successful at switching from ‘Quarry Australia’ to a diverse value-added economic base, we won’t get ahead if we continue to be critically burdened by enormously high immigration.