The important thing is to get into the market as soon as possible.

A long time ago my sister in law & her husband had $2000. They used it as a deposit on a block of land in outer Sydney at $15,000. 18 months later they moved to Queensland, & sold their block for $35,000. After paying off their loan they had the deposit for a home.

Today that home is worth well over half a million. I have seen this story repeated many times, & have experienced it myself. You have to get on the ladder to be able to climb it, starting at the bottom is not too bad, as long as you get started.

If this idea of I presume loaning people their own super interest free allows more to get on the ladder we may get back to that 70% home ownership.

Jardine,
You're making the mistake of equating rationality to conforming with your assumptions.

You don't seem to comprehend that there are dozens of variables affecting inflation, not all of them readily measurable, and there is no single criterion to find an ideal rate (and nor do I have the ability to simplify it down to a formula). IMO the most useful criterion is the potential increase in employment in all regions, but even that isn't a good basis for decision making if considered in isolation. The inflation rate itself and its rate of change are also very important indicators, but knowing the reason for the changes is of enormous help to determine what's best to do about it.

Does all this sound like gibberish? Is it all too equivocal? Fear not, because at the moment it's quite simple: the relatively high unemployment, high underemployment and low CPI all point to more expansive policy being needed. Of course the drawback to that, if monetary policy is used, is the risk of a housing bubble. But fiscal policy can be used to stimulate the economy at very little inflationary cost, and has the advantage that it can be targeted where it's most needed.

The more general case whether economic intervention is justified depends efficiency and its effect on production. Again there are many variables and modelling is often needed. I think the best measure would be the ratio of the internal rate of return to the regionally appropriate interest rate, though I don't think there's yet any consensus on how to calculate the RAIR or what timescale to use for the IRR.

I don't ignore the costs of government interventions, but I recognise they're very often much smaller than the benefits, whereas you irrationally assume they're at least as big.

Jardine (continued)

The question of whether taxation and inflation reduce a person's ability to provide for their retirement is far more complex than it initially appears. Inflation reduces the value of cash, but generally only slightly, and how many cash based super funds do you know of? AIUI in Australia most of the money's invested in equities. And all other things being equal, of course taxation would reduce people's ability to provide for their reteirement, but all other things aren't equal; the things the government spends the tax money on may reduce the amount of money needed to maintain a certain standard of living in retirement, and indeed may also enable them to get better paying jobs. So I can not give you a definitive answer.

Aidan

The straw man is all your own, and as usual you are equivocating on all points:

1. government violence is not confined to self-defence and defence of others, so you need either to admit that you support aggressive violence and its ethical consequences, or renounce your support of government economic interventions that violate property rights.

2. You do not identify who you mean by "the rich": pure marxoid strawman all the way down.
But even to take the reductio ad absurdum - the theoretically richest, idlest, person - you neglect the fact that *he doesn't have to invest his wealth - he can alway consume it*. You are back to the Marxist assumption that the existence of private investment somehow proves that the capitalist impoverishes the poor, and proves an anti-social act. But if that assumption is true, why not nationalise all capital? According to your theory - or rather assumption - it will make society better off. It's you who need to get a grip on the basics of economics.

3. Either you're telling us that inflation *increases* the real purchasing power of money and makes society economically better off because it increases the amount of real goods that people can buy; or not.

Which one is it? So far you're having a bet each way.

"So I can not give you a definitive answer."

Thank you for conceding that you cannot justify any policy of inflation; and cannot fault my take on the economics; or my critique of your lack of knowledge.

The fact is: it's obvious. Government, by taking away a huge proportion of the earnings of workers during their working life, sends millions of Australian into retirement broke.

This cannot be justified by airy gestures at the supposed net benefits of inflation and taxation without coming to terms with the economic calculation argument, which you have already admitted you don't understand.

“Economic Calculation in the Socialist Commonwealth” by Ludwig von Mises
https://mises.org/system/tdf/Economic%20Calculation%20in%20the%20Socialist%20Commonwealth_Vol_2_3.pdf?file=1&type=document

Jardine:

1. I said I thought governments SHOULD restrict their violence to self defence and the defence of others. I didn't say that was the status quo.

1.1 The law can be enforced WITHOUT resorting to actions with the likelihood or intention of causing injury. Although you may consider such enforcement to be "aggressive violence" I do not, and I contend most of the population wouldn't either.

2. By "the rich" I meant those who already have substantial wealth. But I've no wish to waste time arguing semantics; feel free to use a different definition if you want.

2.1 Rather than addressing the argument, you seem to be criticising me for making it.

2.2 You're tearing into another strawman! I'm not arguing against private investment, nor the rich, but policies which benefit the rich at the expense of everyone else.

3. Inflation itself, by definition*, decreases the purchasing power of money.
However the policies which cause inflation can make society economically better off because they increase the amount of real goods that people can buy. Haven't you noticed people work more in the boom and less in the bust?

*I know Austrian economists tend to use a different definition of inflation, but they tend to revert to the conventional definition when explaining why it's a bad thing, so my point stands.

3.1 Expansive economic policy makes society economically better off (and only causes a small amount of inflation) when the economy is below capacity, but when economy reaches capacity it causes far more inflation and does very little, if anything, to make society economically better off.

A complication is that the economy reaches capacity in some regions before others. Governments are able to target spending to address this, which is one reason the use of fiscal policy is more effective than monetary policy alone.

3.2 A very important part of the government's role is to increase the capacity of the economy.

3.3 Do you now comprehend that the reason I can't give a simple answer is because the answer depends on the context?

(tbc)

Aidan

You're contradicting yourself.