Once again well done voters of NSW who can't tell the difference between Liberal party and Liberal Democrat.

David, the idea of buy Australian is a good one, to have government procurement policies to that effect is also a good one.
You would sell out Australian workers to the lowest bidding third world country!

It's a pity that David hasn't got an seat to be held account by. Thank goodness the recent changes to senate voting will see this chap loose his tax payer funded soap box.

Defence spending should be, at least, doubled, and there is plenty of money avaliable; it is being wasted currently on welfare and aboriginal schemes.

Unlike a household, Australia has unlimited credit and forever to pay it off. Therefore as a nation we are always able to spend more than we earn. We should remember that doing so is not without consequences, but we should keep in mind what those consequences are. The negative consequences of spending too much are high inflation and/or high interest rates. But right now those are both low and we have the opposite problem: we're spending too little, especially in South Australia. The penalty for spending too little is unemployment, economic decline and a drop in tax revenue so the nation still can't achieve a balanced budget.

'Tis not the politicians of SA who need gainful employment, it's the people. The economy is primarily run for the benefit of people in the eastern states. Interest rates have constantly been set too high for SA, and the Federal government spends too little in SA to adequately compensate for that. The people of SA require a greater proportion of Federal government spending, be it on submarines or something else.

And nuclear submarines are useless for our purpose as they can not operate in shallow water.

Cobber I strongly disagree. David's economic incompetence is shared by many in the Liberals and Nationals. Indeed the delusion that we could max out our credit card is even shared by some in Labor and the Greens.

But overall, having him in the senate is a good thing as, unlike the major parties, he values our civil liberties. And though he often proposes bad things (as in this article) he's generally opposed by Labor, Liberal and the other cross benchers as well.

George Bernard Shaw once said words to the effect that "universal suffrage was government of the people by its children" meaning that a large proportion of the electorate was ignorant of the ramifications and consequences of the decisions made by the promises of the government they were voting for.

I submit that many of the voters in any election are blind to how the money is made available as long as someone else pays for whatever is promised. If it's not there, "just borrow it, as long as I get my share" No consideration is given to the billions that have to be paid back in interest that could actually be spent on defence, hospitals education or whatever their personal priority happens to be. It's just another version of NIMBY (not in my back yard) The politicians know this and so make all these promises that they then struggle, and fail, to find the money for. However they gained power and that's what matters to them.

We need reform. Everyone says so, but whoever actually promises it inevitably affects a large number of people already on the gravy train, and who will not accept it.

Wrong again Adian. Nuclear submarines can operate in shallow water if the inboard coolant is helium.

However, why in heaven name would anybody want to sail subs in shallow water? Where they'd be incredibly vulnerable, when they could used in deep water and use sound proofing, plus total mechanical inactivity to make them virtually invisible laying on the bottom?

Simply put, there's no way to soundproof diesels, particulaly ones that use liquid O2, to make them underwater capable; and there is no reason why larger aircraft sized, much faster, (50+ knots) already in production, nuclear powered subs (4000+ tons) can't be used almost like underwater aircraft carriers to carry fleets of faster lighter, quicker and deeper diving mini subs to effectively maximise capability/intell gathering, all while minimizing potential casualties!

That aside, our defense spending and companion R+D, pales into insignificance compared to future potential rivals!

Besides genuine tax reform and simplification would likely solve so called spending addiction and unresolvable debt issues.

David's level of income probably puts him in the top tax bracket and opens up all sorts of available tax minimisation strategies than can and does limit personal liability to just 15 cents in the dollar?

Consequently one should advise the Author, to try speaking from a little higher up in future!
Rhrosty.

snake,

I agree that a large proportion of the electorate is ignorant of the ramifications and consequences of the decisions made by the promises of the government they're voting for. Your comments show you're one of that group. You think you understand the ramifications, but you've merely fallen for myths.

Even if we had no debt, you could still argue that the government should spend less than the revenue it receives, so that it can collect interest enabling more spending in future. Would you? If not, why not?

There's a lot more to economics than just finance. Leaving human needs unmet is a bad thing. Neglecting the infrastructure and education spending that would make our economy more productive is a false economy. And having a lot of people idle because nobody is willing to spend the money to employ them is a very bad thing.

Can't you see that it's much better for the government to spend money now when the private sector's weak than later when the private sector's strong? Spending money now will ensure more people are employed, so we get more tax revenue. Those people will spend most of the money they earn, strengthening the private sector and again resulting in more tax revenue. But if the government spending until after the private sector recovers, it will have to employ people who would otherwise be employed by the private sector; not only will there be no new tax revenue, but competition for employees will push up wages unless the government deliberately weakens the private sector by raising interest rates. Either way it works out far more expensive than spending the money now.

If you're still not convinced, how low do you think interest rates would have to go before it would be better to spend the money immediately?

Rhosty,

"Nuclear submarines can operate in shallow water if the inboard coolant is helium."
What is the source for that claim?

"However, why in heaven name would anybody want to sail subs in shallow water? Where they'd be incredibly vulnerable, when they could used in deep water and use sound proofing, plus total mechanical inactivity to make them virtually invisible laying on the bottom?"
Shallow water is where they do the useful work. And unlike nuclear subs, diesel subs can turn their engines off and run on battery power, making them virtually undetectable.

And yes, we could use nuclear subs like underwater aircraft carriers, but doing so would be more expensive than having a fleet of fully capable diesel subs. Submarines can never do what aircraft are able to.

Saying we have spending addiction and unresolvable debt issues is like saying someone without anorexia has food addiction and unresolvable eating issues. There is no problem to solve.

I am really having difficulty in understanding what you are trying to explain Aidan.
It appears to me that you are suggesting some kind of Keynesian programme of government borrowing to pay for all the things the electorate would like to have with the theory that it would kick start the economy. If this is correct, and I'm not sure this is what you are endorsing, I can only point to the fact that you reach a point that so many countries already have, such as Japan the EU and China who have tried this and it hasn't worked. This is because debt has totally over ridden the growth it was designed to support.

Governments are now desperate to create inflation and have also entered into a currency wars by devaluation. Interest rates have become negative world wide and this can only end badly.

The whole world is floating on a sea of debt. Something that has never happened to the same extent in modern times and yet people think that it can all be cured by even more debt. It's crazy thinking.

snake,
"It appears to me that you are suggesting some kind of Keynesian programme of government borrowing to pay for all the things the electorate would like to have with the theory that it would kick start the economy."
Correct. And if you think that's not the best course of action, I suggest you try answering my questions — doing so might make you reconsider some of your positions, and even if it doesn't I'd be interested to know why you believe what you do.

"If this is correct, and I'm not sure this is what you are endorsing, I can only point to the fact that you reach a point that so many countries already have, such as Japan the EU and China who have tried this and it hasn't worked. This is because debt has totally over ridden the growth it was designed to support. "
That's a totally illogical explanation; it doesn't fit the facts at all.

It has worked so far in China.
It  has worked to some extent  in Japan, but they were initially too hesitant to try it  in a big way, and their taxation policy has undermined their efforts.

In the EU, they've done almost the exact opposite. They've prevented Eurozone governments from deficit spending in a big way, and non-Eurozone governments have been reluctant to do so.

"Governments are now desperate to create inflation and have also entered into a currency wars by devaluation. Interest rates have become negative world wide and this can only end badly."
Creating inflation is not the objective; increasing economic activity is.

Governments have an irrational phobia  of debt, so instead of sensibly taking on a lot more of it, they've implemented silly policies like negative interest rates to encourage others to take on debt instead.

(tbc).

snake (continued)

There is also far too much concern about currency wars. In the long term the markets set currency values. Governments should set policies to promote growth; if the markets react by devaluing the currency, so be it.

"The whole world is floating on a sea of debt. Something that has never happened to the same extent in modern times and yet people think that it can all be cured by even more debt. It's crazy thinking."
Apart from the small amount of  money that's physical cash, the world's money supply only comes into existance as debt. Where the problem is insufficient money, there are only four solutions: replace the entire financial system with something completely different, physically print/mint much more money, try to make everyone work for less money, or keep expanding gross debt for ever.

No adequate replacement financial system's ever been proposed, and there's no chance of getting everyone to agree to one anyway. Physical cash is more difficult to work with in large amounts and is more expensive than electronic interbank transactions, and is harder for governments to compensate for if they overdo it. Making everyone work for less money ultimately makes everyone worse off, and it hits the poor the hardest. So ever more debt is the best option. There is nothing to stop the ability to service debt from growing.

Aidan

Thanks for your comment. Unfortunately I don't have the time to try and explain my position which is held by many economists, although not many in the main-stream press I fear. This is not a way of avoiding a reply. Economics cannot be explained in a forum such as this in a couple of paragraphs.

If you want a brief explanation of why I am not confident of the way central banks are manipulating the world economy and creating chaos in the financial world, I suggest you listen to Alan Greenspan here being interviewed and his take on the situation going forward. The interview is very recent.

https://www.youtube.com/watch?v=v8sI1DQvvZ8&feature=youtu.be&inf_contact_key=6189ca75155c1c4f2f9faa362abcc049ef3c94640b76003d806f61e0fff1529c