Hi again Shadow Minister,

Re: “[Alan’s] projections of what the debt and revenues that would exist if Labor had not replaced the coalition are extremely fanciful.”

No, not at all. They are drawn from either Treasury or the IMF. Politicians had no part in formulating these projections. Neither did journos.

Re: “most of the debt incurred under Labor's spendathon had little to no effect on the economy …”

Not according to Joe Stiglitz and other leading economists. As the links here will show, the stimulus spending in 2008/09 was the critical intervention which rocketed Australia’s economy to strongest the world has ever seen:

http://www.independentaustralia.net/politics/politics-display/we-really-must-talk-about-what-actually-did-save-australia,5644

Re: “the greatest productivity drop in decades.”

Not at all, SM. If you look at this graph, you will see labour productivity has increased steadily for the last ten quarters. Not seven. Not eight, which is two years. Not just nine. Ten!

Don’t believe what the Coalition MPs and the Murdoch press tell you, SM. Remember – as we have seen many times over – they are all liars! Go to the source data for factual information.

Hi again Ludwig,

Re: “if we have a rapidly and constantly increasing demand, then we need rapidly and constantly increasing economic growth just to stand still”

Perhaps. But in Australia the demand is not increasingly rapidly. It seems to be growing at a slow and steady rate which is quite sustainable.

Re: “surely we’d be MUCH better off if we stabilised the demand so that economic growth actually counts for something by way of real improvements!”

Demand in Australia is quite stable and according to all indicators is leading to substantial improvements – in productivity, incomes, wealth and most other indicators of increasing standard of living.

Re: “the greatest economic challenge ahead is to get the powers that be to take heed of one of the most basic principles of economics: that supply is supposed to match demand, ongoingly.”

Correct. Australia seems to have accomplished this remarkably well from 2008 to 2013.

If not, where is the mismatch?

Cheers,

Alan

Alan,
I submitted 1,500 words to OLO on 1st Dec, focused on economic development and environ reasons why such development should be possible to achieve. Although regulars on OLO may be aware of relevant evidence it took the extra 500 words to briefly explain to a new reader.
Let's hope OLO uses it.

<< Demand in Australia is quite stable >>

Alan, I find it quite extraordinary that you would say this.

Demand is constantly and quite rapidly increasing. The only thing that could be said to be stable about it is the rapid rate of increase…. which has been more or less stable now for a long time!

<< …where is the mismatch? >>

Everywhere! Where’s the match?? Where is there actually a match between supply and demand such that the quality of the supply is actually keeping up with demand, let alone improving things?

Look at practically every service and type of infrastructure. Where are things actually improving?

You could perhaps say that in some instances there is a match between supply and demand, such that things are not actually getting worse. But in most instances they ARE getting worse…. and they aren’t getting better in ANY instances, are they??

Alan, why do we have this constant struggle to improve infrastructure and services, given the constant enormous amount of effort that gets poured into them over the years?

One reason: the constantly rapidly increasing demand.

Even if you think that immigration / population growth is not that great, you would surely appreciate that if it was considerably lowered, it would significantly help us balance the books, balance supply and demand and render some REAL improvements right across society.

Of all the things that can be done to improve the economy and improve the quality-of-life returns to ordinary citizens of this country from the economy, considerably lowering immigration has got to be THE easiest… and THE most significant.

AA,

There have been several studies into particular Labor stimulus programs, some of which had little to no effect on economic activity such as the $9bn cash hand out, and some which had only a partial effect such as the BER debacle which spent several times as much as was needed to save jobs.

Don’t believe what the Labor MPs and the Independent Australia tell you, AA. Remember – as we have seen many times over – they are all liars! Go to the source data for factual information.

There is no doubt whatsoever that a considerably lower amount of "stimulus" could have been spent with little difference in the resultant economic output.

As for the Multi variable productivity drop under Labor, please feel free to consult the stats from the ABS which clearly shows a drop under Labor.