The Forum > General Discussion > One Year On, Was A Vote For ‘PUP’ Worth It?
One Year On, Was A Vote For ‘PUP’ Worth It?
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The RBA is not a commercial bank, it's a central bank.
Commercial banks borrow money and lend it out at a higher rate.
Central banks CREATE money and lend it out. Most of them (including RBA) also pay interest on money that commercial banks hold with them, to help control the amount of money in circulation.
"I don't have a problem with the RBA paying dividends, you are confusing me with someone else."
Really? Then who said:
"You mean the $8.5bn that Whine Swan pillaged from the working capital of the RBA in a vain attempt to present a surplus on paper. This going with attempts to defer payments and and push forward tax collections. All irresponsible actions from an incompetent treasurer"?
As he vainly chased surpluses and failed to prevent the RBA board from raising interest rates, I'm inclined to agree he was an incompetent treasurer. But there was absolutely nothing irresponsible about receiving dividends from the RBA.
"Anyone with a basic understanding of Keynesian economics would know that Keynes was an economic conservative, and whilst demonstrating the benefits of stimulus in a recession strongly advised against stimulus in times of growth."
Keynes started out as an economic conservative but became less so as his understanding grew. And of course he was not always right (advocating managed currency values when we now know it's much better to leave it to the markets). But I'm pretty sure that he didn't advocate immediate sudden withdrawal of stimulus as soon as it was shown to be working!
Inflation, growth, unemployment etc were indeed at normal levels. But that was because of government intervention. It would have taken a few years for the private sector to return to normal, and during that time the stimulus should be gradually reduced as the private sector expands. Stopping it abruptly will hinder, not help, the private sector's expansion.
As for the BER, it was excellent value in WA and good value in SA. Only in states where management was outsourced was it a failure.