One of my favourite Russia stories was the money exchange. I happened to be in Moscow when Chernenko died and was forced to stay longer than planned since the city closed down during the mourning period. So I ran out of currency and needed to exchange some. I go to the exchange counter in the hotel. The sign says they open at 9:30. Its almost 10. She refuses to serve me because she has other important tasks. I complain to the manager who advise that she does indeed need to complete her reports to the government on the previous day's conversions. The idea that her main function was to actually do the convsersion was alien to him. I used to relate the story around Russia but almost all Russians agreed that indeed her main function was to do the report to the government rather than actually do the job she was supposedly employed for. I did the exchange on the black market which by 1986 was fairly easy and safe.

Everyone else recognises it as inflationary. So what exactly is it you think "deflationary" means?
Aidan,
You're right it should be inflationary. Didn't even notice when I typed it with all that jargon floating about. In a word it's no good for anyone because it deflated everything it should have boosted.
The Pink Batt saga was not a safety issue to begin with, it became a safety issue after Labor's knee jerk reaction. People have installed Pink batts for decades with no such tragic results.
I put this down as one of the many side effects to the removal of the National service in exchange for votes. When that happened common sense was literally outlawed & the education system literally began issueing degrees for compliance to incompetence.

mhaze,
Firstly, thanks for the Soviet information.

Secondy, you completely misunderstand the economic policy I advocate. I certainly don't support reckless amounts of spending. I don't want us to live beyond the national means, but unlike you (and indeed unlike millions of others) I understand that the national means are nation's ability to produce things of value, NOT the government's budget.

Government spending is no more inflationary than private spending, and it's the aggregate of both that affects inflation. Thus in the boom times, the government shouldn't just aim for a balanced budget - that's far too inflationary. It should instead aim for a big surplus to control inflation without having to raise interest rates. Conversely in the bust (and even at a time like this) when the private sector's much weaker, the government should run a much bigger deficit. But in both cases (and in between) the size of the debt doesn't itself matter - it's the needs of the economy that are important, and we shouldn't let the debt figures distract us from that.

Your statement that "The idea that we can recklessly bet the future on the good judgement of government and special interests is insanity itself" is rather naïve as it fails to recognise that doing nothing can be the worst decision of all. When the government spends money, most of that money finds its way back to the government through the taxation system. Failure to spend that money can result in a loss of tax revenue (so it's hardly, if at all, better off financially), more unemployment, a bigger social security cost, a drop in production (which would be inflationary) and possibly a less skilled workforce (since most learning is done on the job). And that would lead to a much bigger drop in the standard of living than any devaluation that would otherwise result.

I'll explain a bit more about specific circumstances tomorrow, but meanwhile any questions are welcome.

it's the needs of the economy that are important,
Aidan,
The above line is the all-encompassing crucial factor that hardly anyone & the academic background bureaudroids in particular have simply no concept of, hence the situation we're in since they infiltrated politics. They haven't got what it takes to understand these needs. All they do is play an age old game of take as much as you can & when it all goes to crap just blame everyone else. These Growth-dependent "experts" can't get it right yet they do their utmost to prevent sensible people from making it right. Their standard phrase of defencive excuse is "people don't understand the complexities...." It's not that people don't understand, it's that people are dumbfounded at the incompetence of our economists & policy makers & how they constantly get away with it. If only they focussed on being as competent in their job as they are in self preservation, we could be enjoying a lot less stress in our daily life.

mhaze,
I realise I owe you two apologies:
Firstly, sorry about the lack of a further response. The specific situation I had in mind was what would happen if a bank collapses, but I subsequently realised that was from another thread. Although if you want me to explain it (or any other specific situation) here, let me know and I will.
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Secondly, sorry for exaggerating: I said "doing nothing can be the worst decision of all". This was incorrect, for while doing nothing can be a very bad option, doing the opposite of what's required is always worse.

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individual,
> People have installed Pink batts for decades with no such tragic results.
Are you sure about that? Because (although I can't find a reference) I've heard the opposite: there were tragic results but nobody noticed because they were spread over decades.

Now that you comprehend the difference between "deflationary" and "inflationary", do you still think overpaying any bureaucrats (let alone incompetent ones) is deflationary? If so, how?