Hi Julie,

Interesting contention but readers should weigh your arguement up against the fact that you are a part of the Institute of Public Affairs (IPA), a right-wing, corporate funded think tank based in Melbourne with close links to the Liberal Party.

Once people understand that they can then better judge your advice.

Link: http://www.sourcewatch.org/index.php?title=Institute_of_Public_Affairs

Perhaps if this twit read books such as When Corporations Ruled the World by David Korten she will find that it is corporations that over-whelmingly determine everything about our lives---and I mean everything.

Or perhaps bothered to check out how the big brother 24/7 world-wide security systems put in place via the USA Homeland "security" apparatus did more to ensure that the government can snoop on every aspect of our lives than anything so far done or suggested by Rudd or Obama.

Similar systems were put in place in other countries too, including Australia. Big cities are now saturated with spy (security) cameras.
Both the UK and Germany have massive camera systems.

Systems which make the 24/7 system described in 1984 look naively primitive.

Have you still got your fridge magnet?

Advertisements still appear urging the good faithful citizen to support anything "suspicious".

Systems which are now almost impossible to dismantle and which also have a life of their own---as do all such bureaucratic systems.

Read the chapters in The Shock Doctrine by Naomi Klein about how the Orwellian 24/7 spy system industry went through exponential growth as a result of the post Sept 11 phoney "war on terror".

No doubt that this posting will in one way or another be monitored by some spy system either embedded in the computer software, a Google cookie, or via the 24/7 government "listening" stations, the function of which is to monitor ALL computer and email messages which use certain key words as terror/terrorism (etc)---plus mobile phone calls too

Julie,

It is not government spending that is the problem it is the mechanism by which governments spend money that is the problem. When governments spend money they have to account for the expenditure and control it. This is where it all becomes inefficient and we spend money without getting good value.

We will always have government spending - and so we should because it is spending to support the communities rather than spending solely for particular individuals. There are some expenditures that will not happen if it is left up to individuals. This is the socalled Tragedy of the Commons effect.

There is another way for governments to spend money. Currently governments tend to spend money to provide services to the population - think hospitals, think schools, think roads, think public transport, think old age care, think reductions in emissions, think water etc.

Rather than providing the services the government can give the money to the people who need the services and let them purchase the services through a free market.

To see how the government can use markets to increase the money supply and reduce greenhouse gas emissions take a look at

http://stableproductivemoney.wordpress.com/2009/04/03/increasing-the-money-supply-without-loans/

Use this approach and the current 29% of GDP could deliver more benefits than it does at the moment. We can have less expenditure and more benefits through smarter ways of spending government (our or the communities) money.

Julie and others,
Before you firm up your ideas on what the government
should be doing and what the G20 thought it was doing you should
consider that the "game" has changed dramatically.
The old scenario of playing with interest rates, currencies etc is
all over.
Obviously the G20 and their advisers are simply asleep at the wheel.

I suggest before you go any further with this discussion you read this;

http://www.energybulletin.net/node/48530

GDP is now being driven by energy, money is now out of the picture.

>> More spending means more taxes,

eventually. the crisis is now.

>> One more dollar of tax raised means one less dollar kept by the productive private sector,

kept for what purpose? if the private sector is not "productive", i don't much care how many dollars they have.

do these idiots *ever* have a moment of humility? do they ever accept an ounce of responsibility for the damage done by their zealous anti-regulation, anti-government preaching? who and what do they think created this mess? why do they think the same ideological blindness will now fix what it created?

A good article Julie. Rudd's tirade against neoliberalism signals a big change in direction. The policies of free trade and free markets are to be replaced by more state control. The higher taxes necessary to pay for the bigger role of government will result in less investment in productive capacity and lower wages and employment the end result.

I disagree with you about people saving their stimulus packages being a problem. Surely that is a good thing. Australia's household debt is too high and people that save their government handout are showing more good sense than the PM and treasurer have shown.

When I read something from the IPA telling us we should have less government interference, I'm put in mind of a hyena at a zoo calmly putting the case for fewer barriers and zookeeper interference. After all, shouldn't the small, flightless fowl get to compete on a level playing field without all that costly, inefficient protectionism?

The article pointed out by Bazz is pretty much the same as those which predicted the end of oil by 2002.

When you go to Queensland, you are advised, because of daylight savings to adjust your clock back 25yrs.

KRudd is doing just that.

Increase taxes
Increase spending
tighten the labour market
Increase Big Brother control of every aspect of life.

Welcome to 1983 again.

Under Howard the wealth of the nation was channeled to the wealthiest 10% at the expense of everyone else.
Schools, hospitals, roads and Ports all run down to the extent that it is now more costly to get them back up to standard.
Rudd will be forced to spend not only on what Labour believes spending is necessary on, but also to make up for the lack of maintenance by Howard/Costello. In short, we now have to pay to clean up this mess.
(I am aware that the private school set may not have noticed the country being run down. Believe me, the rest of us have!)
So where was the IPA when the banks lost the last 15 years of profits and needed the government to prop them up? (Why can't we get some accountability?) Where was the IPA when Liberals lost about $3Billion gambling with foreign trading? (accountability?)
Just call yourselves the "liberal fan club" and be honest!
It is wrong that the Neo-Libs *still* think it's OK to channel the nation's wealth to a tiny fraction of the population, then let that tiny percentage lie to the rest of us about what happened when it collapses.

Errr Leigh; It is not a prediction, peak oil occurred last year around
July. Depletion is expected to be about 6% per year after the slack
from the GFC is taken up.

This extreme right-wing opinion piece is a steaming heap, riddled with silly claims.

In no realistic sense is there a "monster of a debt" in any case.

Fozz,

The $100bn deficit over the next 2 years is the biggest deficit in the history of the country. Considering it took the Coalition 10 years of higher taxes to wipe out the deficit left by the previous labor administration.

While there is need for a stimulus package, the size and allocation of the funds will both get less future return, and leave a larger debt than necessary, which will slow any recovery.

As the median income of the Aus worker increased more than virtually any other OECD country during the previous administration, the claim that only the rich benefited is fatuous.

The ratio of debt to GDP was between 20-30% in the '50's and 60's. Since then it has risen exponentially to 170%+ in Australia. There have been mini credit bubbles in each decade along the way fueling the mega bubble which has just burst.

Rudds deficit has a few good points. The broadband rollout regigged today will pay it's way. School halls will give less tangible benifits in the medium term. Cash giveaways are shortsighted and populatist. Keynes recognised the need for deficit spending to pay for itself over time.

When taxes rocket up in the near future to pay the compound interest for this 'freebie' instead of services the 'confected one' aint gonna seem so sweet.

This article makes me feel forbiddingly tired, dispirited, full of ennui; the assertions and language are so fabulously predictable. One only has to register the 'IPA' after this person's name and all is clear. "Monster government" indeed!
The claim by Democritus, above, is rubbish, more propaganda. I think my memory is quite good - didn't Howard and his mate Peter repeatedly offer tax cuts, usually in a pre-election period, during their term of office? Didn't the massive tax windfall from the 'resources boom' wipe out any deficit in no time? The only people who suffered relatively 'higher taxes' were the lower income earners and those affected by the regressive GST; the higher income levels were given quite substantial tax reductions. Apart from anything else, the whole question of whether a budget deficit is an awful thing is begged. Whatever the deficit was, and this was disputed at the time, the Libs did everything they could to exaggerate it and use it as an excuse to cut services and browbeat the electorate about Labor's alleged 'black hole' profligacy. It all seems so pathetic and petty now, with the neo-liberals' bubbles bursting around us.

Democritis: And what was the real inflation over that period?
Transport cost, medical costs, rental all soared yet official inflation remained at 3%. It is not fatuous to claim that Howard was good for rich and bad for the poor, it is factual.
Last time it took the conservatives only a term to pay off the "irresponsible" debt and they were lining the pockets of their industry mates in no time.
They also thought that debt that could be paid off quickly was worse than a third world health system and a 2 tier education system.
Look at the USA people! they are falling apart because of this "greed is good" mentality. Money is not virtue.
Those who benefited from the generational theft don't get it. the last decade has been utterly wasted, and has emboldened some pretty mean, selfish people.
I have no sympathy for the "gimmie" crowd who drive BMWs.

One way to reduce debt is to sell off assets. For the government this means privatization. And what self respecting corporation would not want to get its hands on our public monopolies or virtual monopolies? They are practically licenses to print money unless well regulated for the public good.

IMO what successive governments have done is swap Australia's productive assets for cash and then consumed the cash (in a big big way at present). What the public has lost as a result of these asset sell offs is the ability to apply them for the common good.

And what is this efficiency that privatization is supposed to bring? I say to Ms Novak of the IPA prove it. Prove that privatization has brought about these wondrous efficiency benefits claimed as if just saying that is the case makes it true.

And even if privatization does happen to result in improved efficiency (whatever that means), that is not the be all and end all of everything. I question whether converting labour costs to increased CEO remuneration benefits and profits translate to a better outcome for the country as a whole.

The problem is is that once governments have sold off our public assets they are very difficult to get back. Only a Hugo Chavez type revolution will do it. Not surprisingly his revolution is spreading throughout Latin America which had Milton Friedman's neo liberal policies thrust on them by cruel dictatorships in the first place.

Also, I can't resist adding, another way to reduce debt is to reduce the quantity and quality of of public services such as health, education environmental protection.

The Ruddites should not be lulled into thinking that his anti neo liberal pronouncements are anything but words. He may represent a slightly milder type of neo liberalism than did Howard but he is driven by the same basic ideology. Ask him about free markets, privatizations and growth at all costs? See where he stands.

Rudd is an accomplished wordsmith - his actions don't usually follow; eg the Carbon Emissions Reduction (question mark) Scheme.

Why should someones opinion be written off because they belong to
a right wing organisation ?

Sounds like shades of Stalin to me.
Frankly I find some of those comments offensive and certainly not
democratic.

Some of the left wingers on here need to take a Bex and have a nice lie down.

Kulu,

There is another way to reduce debt and that is to increase your assets and let the assets earn money and pay off the debt or not to create the debt in the first place.

The most obvious and simple way not get into debt is for the government not to use loans as the mechanism to increase the money supply. The government can increase the money supply by first creating assets then increasing the money supply to match the assets.

What we do at the moment is to increase the money supply by creating a loan without any money to back it and hope that the money will produced a productive asset to back the money. All we need to do to fix the financial system is reverse the procedure and create an asset first then the money. Governments - or the controllers of the currency - are the only ones who can do that. The government can enlist the private sector to produce the assets efficiently but the government is the one who controls the money supply.