David,

"Shal, I'm sorry to have to say this, but your statement "But that pain = wholesale social dislocation, families torn asunder, a potential resurgence in fascism caused by resentment at the economic collapse? Not only is this politically unacceptable. It is socially and morally unacceptable" is naive to say the least."

So David will you volunteer to go on the breadline and let someone more deserving have your job?
I assume that the market will ensure that only those who are most able to bear the pain will be forced to do so.
What a pity i am cursed with the burden of naiivete. Otherwise I might be able to see the world in more pragmatic terms which sees people as cogs in the economic cycle.
Perhaps we should legislate against naiivete in the same way that you advocate legislation agains malfeasance and stupidity.
After all if capitalism needs protecting from itself so perhaps do Keynesians.

Richard Laidlaw's provocative article is timely.His summation of Aust's fearless leaders is spot on. They are mindless / clueless oxymorons clutching at straws, mimicking the antics of the US Administration which is hell bent on rewarding the wrong people with giant slabs of " peoples money ". All those greenbacks meant to revive the Economy has been recklessly squandered with recipients clamouring for more. The stimulus didn't shore up the Banks, GM/Chrysler, housing industry etc The abyss is still there. A dismal failure of Corporate governance and Presidencies.

The Obama rescue package is not addressing core values. It will soak up the $ 3 T, and still not resolve the melaise. The cat is chasing it's tail. His Presidency is crippled.

Create jobs. Stoke up the fires of manuacturing. Curtail the drain on imported Oil. Stop phony subsidies across the board. Rein in the colossal Military budget, and the many contractors bleeding the Nation dry. Beef up the SEC. Purge the 17,500 lobbyist in Washington. DC. Kill off Bush's Home Land Security with it's $ 55 B budget. Deport the 15 million illegals on welfare. Stop the rorts and triple duplication of security org's that are slurping the gravy train. There's umpteen more.

The Wizard of Oz - Kevingate, may spruik economic double-speak in his thesis in the Monthly, but it does't detract : Unemployment is 4.9 % and rising, aussie dollar's worth 63 cents, petrol $1.29, food costing 15 % more, rents/rates skyrocketing, housing affordability a myth, pensioners / retirees crying out in despair. Rome burns. Kevy fiddles.

His Dec $ 10.4 B stimulus only satiated the Gaming and Alcohol beverage industy. 60 % went to expatriates on dual citizenship living Overseas, 15 % went to servicing the burgeoning consumer credit card debt, and only 3 % assisted first home buyers, who are flat chat battling to service the 30 year loan, in the present climate. BTW, the ABS stats is 3 months in arrears.

The General Motors Holden bonanza which bolstered Vic's red-flagging economy in election year, but little in the way of boosting employment. GMC stood down

ring River scheme. $500 M for Senator Fielding's vote, $ 800 M for the Greenie Senators from Tassy. Brown was ecstatic. His party guaranteed another term, and his superannuation tripled. Kevin baby, hadn't done his kinder garden sums. An economic guru ?

In real terms Kevin is shamelessy Oz's biggest handout specialist in our 221 year history. He made the Guinness Book of Records. It will take 5 generations to wipeout the deficit " black hole ". At this rate, he's a prime-ministeral loose cannon.

Fall out: It took Costello a decade to redeem Labor's excesses ( Whitlam, Hawke, Keating ) $ 100 B. With our GDP shrinking, deficit balooning, abysmal commodity prices and exchange rate, 4 State treasuries in recession, unemployment at record levels, and Moody, S & P credit rating revision AAA's to AA, it must dawn on some, our economic credentials is in smithereens.

Meanwhile, denuded Glen Stevens, RBA Governor, assures us, the economy's in great shape ( aside:" compard to our Asian neighbours " ) wholly compromised, and in Swan's pocket, his avowed policy is to support his employer's fantasies.

His 3.5 % cash rate, Treasury Bills & Bonds is floundering. Banks
and Foreign investment are not supportive. Dick Smith prophetically predicts there will wont be an iconic Business in Aust that will be native owned. Is this a sign of the times ?

Or is it my imagination?

"Both providers and borrowers make a judgement in the context of their broader values and options. As WAL says, no moral element."
What if borrowers have no options?
So long as people need money to eat,
So long as people must work to make money,
So long as people need clothes and cars and petrol in order to work
So long as people need houses,
It is not just possible to coerce people into debt, it is inevitable.
Coercion is always a 'moral element'.
By definition you cannot lend money unless you have more money than you immediately need, -unless you can create money from thin air, as banks do.
In a charitable society, the rich would give to the poor. In our society, we force the poor to subsidise the rich.

Apologies . I misread the name of the person who posted a comment on my comment

It should have been addressed to VK3AUU
So,

"Shal, I'm sorry to have to say this, but your statement "But that pain = wholesale social dislocation, families torn asunder, a potential resurgence in fascism caused by resentment at the economic collapse? Not only is this politically unacceptable. It is socially and morally unacceptable" is naive to say the least."

So VK3AUU will you volunteer to go on the breadline and let someone more deserving have your job?
I assume that the market will ensure that only those who are most able to bear the pain will be forced to do so.
What a pity i am cursed with the burden of naiivete. Otherwise I might be able to see the world in more pragmatic terms which sees people as cogs in the economic cycle.
Perhaps we should legislate against naiivete in the same way that you advocate legislation agains malfeasance and stupidity.
After all if capitalism needs protecting from itself so perhaps do Keynesians.

The two great advances in economics in the 20th century were Keynesian and monetary.

However, they both have their weakness and are to some extent applicable in different areas.

Keynesian economics was born out of the depression and high unemployment, and its remedies worked very well in resolving them. However, as employment improved, these remedies tend to fail and produce inflation, and the use of monetary policy is more effective.

For several decades we have had low unemployment, and the control of the ficus has been monetarily based. With the recent events, it would be worthwhile dusting off the Keynesian policies once again as is being done by most of the world.

However, as things return to normal, there will be a price to pay.