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The Forum > Article Comments > The Government's balance sheet > Comments

The Government's balance sheet : Comments

By David Leyonhjelm, published 5/9/2016

Each area of government spending should be pared back, with welfare properly targeted to the poor and duplication between the Commonwealth and States in areas like health and education eliminated.

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Jardine,

1. Of course. Though it is so illogical that I'd dispute it even qualifies as a line of reasoning.

2. You're either wilfully misunderstanding me or have failed to comprehend my last answer:
The government’s withdrawal of the capital from its alternative market uses is NOT part of the spending process. IF the government withdraws capital from its alternative market uses then that should be accounted for separately. But the government can spend money whether or not it withdraws it from its other market uses.

When you understand that, please go back and read the rest of what I wrote about this: you'll find it makes much more sense.

3. One example: we know that if the government employs more people AND DOES NOT WITHDRAW CAPITAL FROM OTHER USES then the government's actions are having the effect of reducing unemployment even if the nation's total unemployment goes up because of the private sector's actions having the opposite effect.

4. The number of deaths from it would be zero, as the capital confiscated by government to spend on the interventions you advocate is zero.

____________

I could go on, but until you understand that a fiscal stimulus involves increasing the money supply rather than just redirecting the money, there's not much point – you'd continue to mistake the effects of your own misunderstanding for logical errors on my part.

It might help if you realise that the time there's the greatest need for the government to provide fiscal stimulus is when private sector actions are decreasing the money supply.
Posted by Aidan, Tuesday, 13 September 2016 1:31:42 PM
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