According to today's media, Rudd is now competing with Hawke for the 'best PM' award.

Popularity is all that Rudd is interested in; hence the handing out of "pocket money", which he knows will fool most Australians, who don't have the brains to look more intently at this shallow, cynical man. The handouts will be long gone by the time Rudd brings Australia to its knees economically and culturally.

"First, let's kill all the economists."

This article appears to deny most things while explaining nothing much.

I'm intrigued by the suggestion from American economists that the Great Depression was not affected/solved/whatever by "more government spending". One could have sworn reading somewhere that the infrastructure expenditure of Roosevelt involved more government spending.

So what exactly DID get the US (and world) economy out of Depression, then? Was it the fairies? The wisdom of the Stock Exchange? A balancing of government budgets ? I'd apologise for the sarcasm here if it weren't for the obvious gaping hole in the "explanation" involved in this article.

Tony Makin's proposition seems to assume that the personal stimulus measures are all that is involved in the packages to be applied both here and overseas. Of course it's not to be expected that one-off handouts are going to be the solution: that's why they +are+ one-offs. They are temporary measures simply used to try to minimise further depression while longer-term infrastructure programs are geared up.

And yes, they create debt. But then, inaction creates debt, and longer-term infrastructures create debt.

It's a choice of which debt you want: the debt that stems from an ever-increasing spiral of diminished economic activity, or the debt arising from an attempt to stimulate economic activity.

Just what is it that the anti-government debt economists propose is going to turn an economic downslide into a normally-functioning economic environment? Are we to hope that if we balance the budget by decreasing expenditure or increasing taxes or both, we somehow emerge at the other end because we're somehow more "virtuous"?

Decreasing government expenditure cuts jobs, and increasing tax cuts down consumer spending. Is this the way to go, really?

If Mr Makin has some sort of explanatory answer to the global problem, he hasn't come close to outlining it here.

It seems to me that Kevin Rudd's effort to stimulate the economy by giving us back some of our taxes as pocket money is barely the break with neo-liberal dogma that many of us been led to believe it was.

What Rudd seems to share with the 'tight purse string' neo-liberal ideologues is the irrational belief that has been turned into official ideology over the past three decades. That belief is Governments (i.e. in a democracy, the people acting collectively to further their own interests) cannot intervene in their own right within the national economy. Practically everything has to be, one way or another, contracted out to private entities to be done on our behalf.

The money that is to blown on Rudd's idiotic pocket money scheme or his schemes to largely stimulate the private sector to build (largely environmentally unsustainable white elephant) infrastructure would be far better spent on repairing our damaged environment and developing technologies which genuinely assist sustainability, such as broadband networks.

Professor Bill Mitchell of the Centre of Full Employment and Equity (CofFEE) - University of Newcastle (http://e1.newcastle.edu.au/coffee/) has created an exhaustive fully costed plan which would create full employment in useful and fulfilling occupations for AU$9billion per year (see http://e1.newcastle.edu.au/coffee/pubs/reports/2008/CofFEE_JA/CofFEE_JA_final_report_November_2008.pdf)).

That would be a vastly more worthwhile way to spend our taxpayer dollars.

In Hugo Rudd's and Sancho Swan's mishandling of the crisis 'Government spending' and 'worthwhile' are mutually exclusive terms.

These blokes shouldn't listen to economists they should read Cervantes.

$Billions are now being called pocket money , in Vic 1.3 Billion has been spent on a key card for Rail Travel this is not fiction , it still won't work ? Who cares it's only pocket money ? Like Charlie Drake we have lost the end of our yodel , we are living in fantasy land .

To regain some perspective if Professor Bill Mitchell would conger up a graph that shows how many percent we need to elevate the GST to pay all this funny money back in 2 or 4 or 6 years .

To all those whinging about the money - if you don't want it then hand it to your favourite charity, or someone you know who does want/need it.

It is amazing how short sighted people are when it comes to politics. Howard doled out $600 per child in 2004 (I think the year is right) and when people without children recieved the payment they were told there was no way of making them hand it back.

I know of an aged peoples home where the residents all got the money and they were told to keep it.

Mr Makin's apparent concern about " ... The economic consequences of giving money away to stimulate consumption ... " is surely disingenuous, as is his follow-up .. "You may think such a bonus would surely boost spending in the economy, the key rationale for previously announced bonuses."

As a professor of economics on the Gold Coast, he surely must be aware of the hundreds of billions of dollars handed over to the obscenely over-paid 'executives' and wealthy shareholders of huge foreign corporations (mainly based in the U$A) engaged in the manufacture and trade of weapons of mass destruction, ranging from humble land mines, cluster bombs and the like to nuclear weapons and the aircraft with which to deliver them.

And then there are the hundreds of billions of dollars handed over each decade to foreign-owned 'Australian' mining companies, motor vehicle manufacturers and so on in numerous forms of Corporate Welfare. Our reward for such largesse? ... close more Australian factories, car plants etc and set up operations in 'cheap labor (sic)' Third World countries!

And then there are the 'expenses' incurred in hosting periodic war games such as Talisman Sabre at pristine Shoalwater Bay (2 weeks in mid-July) and other, usually similar, parts of Australia.

These "joint training excercises" are dominated by U$ military, naval and airbourne armies, which has been forced to seek new locations for their testing of new 'weapons of mass destruction', following public pressure brought to bear by the peoples of the Carribean, Latin American AND their own 'homeland', whose environments they have trashed, in some cases leaving them uninhabitable.

Whilst all of this is fully intended to improve U$ economic performance,"more government spending" of this type is definitely not the way to improve Australian economic performance, 'Professor'.

Rather than distracting some of the readers with his 'micro-economic' focus on tuckshops and the consumption behaviours of their clients/consumers, Makin might care to read up on Political Economy 101 and reflect on the obscene waste of public, taxpayer-funded money on 'defence' ... against unknown/undeclared or dubious, manufactured 'enemies' in far-off foreign lands such as 'I-rak' and Afghanistan

The budget defecit must be funded by borrowing money that could have been used for alternative, more productive purposes such as infrastructure. At some point, this public debt would also have to be repaid"

What?

Why would a federal government need to borrow money to fund it's own domestic spending programs? That is completely nonsensical!

The sovereign (federal) government is the currency monopolist. It alone is legally empowered to create or destroy money and does so on a daily basis. The assertion that someone who can create their own currency at will needs to earn or borrow from someone else is completely ridiculous. There is nothing inherently bad about federal budget defecits (within the bounds of reason). The fed can always pay them. Running surpluses for the sake of running surpluses is more troublesome since it witholds money needed for continuing growth, forcing a reliance on the continual expansion of private debt, a practice that seemingly will have trouble expanding further.