Janet H Thompson,

Hi Janet, you are a gem. You are totally correct and I might add probably prepared to think outside the square. Good on you.

I don't mean to be patronising at all. But I'd be prepared to bet you'd probably read Mises and Von Hayek unlike just about every Australian University trained economist and lecturer I've ever spoken with.

Justin,

a change of christian name to Thomas would not be inappropriate as that great man's writings are as simple and straight forward as yours. Well done and I concur completely.

Everyone else except Arjay:

Education is not about what to think but about how to think. Our schools and universities only do the former nowadays. I would wager Justin to be as well read as any person I know, including me. Opps egotism, I must be reading to much Rudd, ... lately!

Kind regards to you both

ps Pericles, Justin did give an alternative ... didn't you recognise it? The Greeks once mastered that option.

pps Fozz, when you point a finger at someone there are three pointing back at yourself.

Keith,thanks for the complement.I suspect that Justin does a lot more than deliver phamplets.We are are too often impressed by titles.In a business next to mine,I have an ex-corporate lawyer making bees wax candles of all things.

We are experiencing the largest economic collapse in since the Great Depression and all the so called economic geniuses got it wrong.I will gladly listen to the likes of Justin Jefferson who have insight based on real experience.

This is a tricky one to answer, for I don't think that the author,
or anyone else for that matter, really know.

The fact is that Obama was dealt a really bad hand and is taking
advice from the best minds that he can bring together, including
Buffett, Summers etc.

What we know is that when Paulson let Lehmann crash, the global
economic system as we know it, nearly came to a halt.

Now lets say the US did nothing and let everyone crash. What would
have been the global consequences? AIG, the major banks, all
are connected and once that pack of dominoes starts to fall, down
come the rest of the dominoes.

If GM crashes, ok so add a few million unemployed, for there is
a downstream effect, but we could still buy Toyotas or whatever.

But if the banking system crashes and major banks close, life as
we know it cannot function, for people need banks to buy food,
to live daily lives.

How many businesses could pay wages, if their bank was closed?
How many people have enough money under the mattress, to keep
going for a few months, until things are sorted out?

So I'd say with this in mind, the Americans tried to keep the
wheels on the financial cart, for the alternate option was
disaster in action and nobody really could predict where the falling
dominoes would end. The fact is, with a global economy we are
all connected.

“Discuss the merits of his ideas”

I have re-read the article but am hard pressed to find anything merit-worthy among the dribble.

The problem I have with it is that pretty much all of his arguments are an extension of a false premise – that government can only inject money into the economy by sucking it out first. This is completely wrong.

As an economist Janet, I’m sure you are aware that the federal government is the currency monopolist, is able to create Australian currency at will and does so when it spends. It does not need to borrow or tax in order to spend and of course taxes levied by the federal government do not pay for anything since that sum is extinguished.

Justin bemoans deficit spending, accusing the US of spending a sum that equates to nearly three-quarters of the entire US GDP. He offers no explanation as to the origin of this vast sum. He has already suggested that the fed must tax in order to accrue revenue before it can spend. Tax three-quarters of GDP from a country already plummeting down an economic precipice. No? Well then, perhaps Justin has seen deposit slips for stupendous sums given to the fed by some mysterious lender.

Kieth – maybe you and the other two fingers could spell it out for me? I have already given an explanation of why I think the author is spouting garbage.

FOZZ quote<<..create currency at will>>..fozz the govt surrendered the right to issue money wholy to the fed reserves..[the proces now is govt issues a bond[INTREST BEARING bond to the fed..[the fed monetises it and collects intrest on it]

the fed also collects all our taxes..[because along with the EXCLUSIVE right to issue'fiat'reserve/currency,..it is the govts exclusive banker[any'money'it lends]it needs to repay to the fed to get its bond back with intrest on top,..paid for by our taxes]

the fed uses our tax take to leverage more credit to its central/banks[for private gain[and control]..over all credit]..the bankers running this exclusive GLOBAL CARTEL,have used the issue of the globes gobal currencies to manpulate the worth of our global currencies via setting the exchange rates..[bankrupting who so-ever they chose,setting the intrest rate as they chose..[and by never having to account[nor audit]..have total control over the worlds gold and silver,..leased to their mates/at mates-rates

[so much so that the trade in currencies is done via another fed agency that issues gold futures..paper..[every day 3 times all the gold ever recovered gets traded in these paper gold securities..[they are virtually impossable to cash in,but via them gold has been artificially held down..[its real value should be near 3000 us[thats if you could get any of the real stuff

<<It does not need to borrow or tax/..government do not pay for anything>>..totally incorrect the fed'orders'govt to do as IT..[the bankers cartel].[money changers]..tell govts to do..[or your money falls into hyper-inflation..[see argentina[/iceland,/germany,/zimbabwe

the money-changers..are[now]demanding their latest con[the carbon/tax]for their derivitive-traitors to trade in for huge bonus..[and greater tax burdon on the people..[..serfs made homeless by the whim of a few bankers and the 3 traitors who set the prices of default[read unpaid debt]swaps

..the fed creates any ammount at their whim..[the latest issue means soon the hyper/inflation deflates the worth of the yanki to equate argentia[or zimbawe]/germany

[as soon as the bankers start spending their windfall..[anytime they chose]..ANYTIME...but they hold the real/shares and real/gold etc..[we just hold thier soon to be worthless[fiat]paper...spend it while you can folks[soon a barrel of it wont buy a loaf of bread

Study your history.During the Great Depression they did exactly what we are doing now ;ie borrowing more printed money from the international banking cartells and paying interest on inflated,worthless money.

The Geat Depression did not end until after WW2 when our Govts reduced taxes and spending by 33%.

Kevin Rudd already has us in debt of over $200 billion or $20,000.00 for every working person or $40,000.for every household.This is just an estimate.Great Britain under Gordon Brown presently has a Govt debt of $110,000.00 for every household.Just 12 mnths ago we had a surplus of $25 billion.

Perhaps Kevin wants to emulate Gordon Brown in trying to defy the laws maths,but we should not be seduced by the folly of voodoo economics,whereby debt it seems can be eliminated by creating more debt.If this trend of creating IMF cyber money continues,then hyper-inflation will destroy both our savings and our jobs.

We have a clear choice,either we suffer a short sharp recession or go the way of the Great Depression of long and deep human suffering.