Reply to Aidan.
I agree we need an integrated rail link from Melbourne to the Airport then on to Sydney or Canberra then up to Brisbane.
The Chinese have just built a 725 kilometre rail link from Ethiopia to Djibouti for $4 billion.
I propose that it would be easy for the Australian Government to ask the Chinese to build a Melbourne to Sydney link for a little more cost.
Problem in Australia is that our politicians are more demanding and corrupt than African leaders.
When Andrews in Victoria paid contractors over $1billion in cash to
contractors for not building anything.You have to wonder what he got "under the counter."
In Australia infrastructure spending is going through the roof, just as it did when the Mafia got the Italian government to spend billions on projects.
The connection between overseas mafia and the Victorian Government goes back years even before the "privatisation" of roads, trains and buses.
The so called fund managers are getting cheap credit from Mafia connected Merchant Banks and therefore win contracts and then do a cheap job and get further pay from repairs.
Melbourne Toll network is a case in point.

"Which Riviera?"

Why limit ourselves to one Riviera. We've got unlimited credit so how about a couple each. One in the Southern Hemisphere, one in the North. The Tsars had a summer and winter palace and we're better off than them - they had limited credit.

But you're right, Toni, that there are limited spots on the various Rivieri and cash rich Aussie buying up big would push up prices. But then we can just print more money since, have you heard(?), we've got unlimited credit. Of coarse, that same price increase occurs in beautiful downtown Parramatta and St Kilda which is one of the many consequences of merrily running ever more deficits.

"reductio ad absurdism"

I didn't have to do any reductio-ing to get to the absurd.

Basically you're asserting that printing money is consequence-free and that's logically, economically and historically wrong.

In the past, when I bounced you on this, you acknowledged that it'd be inflationary and that eventually governments would need to run surpluses to balance the over-spend. But you never actually advised how such a surplus would be achieved given our propensity to spend like we've got unlimited credit.

BROCK,
The Ethiopia to Djibouti railway is a conventional line, not a high speed line. It would be more comparable to the Alice Springs to Darwin railway (about twice as long and costing $1.2 billion), though I think that was built to sightly higher standards.

Construction projects in Australia are always likely t cost more than their overseas counterparts because of the need to pay Australian wages.

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mhaze,
Not even close. Try again!
Here's a few hints for you:
1) Carefully reread what I wrote.
2) STOP LYING!
3) Learn the difference between what is implied and what is inferred.

Aidan.

"Not even close. "

Close to what?

"2) STOP LYING!"

Yes I utterly apologise. After all, I accused you of saying we have unlimited credit when in fact you said "our credit is unlimited".

Can you forgive my wanton deception?

Aidan, your 'analysis' of fiscal policy is correct only on the most simplistic terms. We can borrow/print as many $A as we want...that's true in the short to medium term. But there are consequences to that which mean that the costs of continuing to do so indefinitely, will lead to cost burdens that out-weigh whatever perceived benefits never-ending spending may bring.

You seem to either not understand the consequences or want to ignore them in the name of short-term gratification

mhaze,
You weren't even close to the truth.

What you should be apologising for is your absurd and libellous allegation that I have ever asserted (or even implied) that "printing money is consequence-free"

I have always maintained that there are consequences. Get it? Always maintained, not merely conceded!

As for your reductio ad absurdium, it's akin to your hearing there were roads in the NT without speed limits, and accusing the person who told you that of claiming that there were roads in the NT where you could drive at 1000km/h.

Do you understand yet? Just because something is not the limiting factor doesn't mean there are no limits!

Although vehicle speeds on some NT roads weren't capped until recently, aerodynamic factors, engine power, engine speed and the need to control the vehicle meant it couldn't go anywhere near 1000km/h.
Similarly, although the Federal government has unlimited credit, it's limited to what it can do by the availability of resources (workers, materials, land etc.)

It's getting a bit late now, so I'll explain a bit more about the consequences when I reply to Toni's post (in the morning, probably).

Toni Lavis,
Many places, in all our states, aspire to be Australia's Riviera. I think Eastern Sydney and the Gold Coast are the leading contenders.

It's good to see you understand that economics is about resource allocation rather than just money. That puts you ahead not only of most of the general public, but also ahead of a lot of economists!

Not everybody does have unlimited wants, and of those who do, not all want to live on the Riviera. But so many do that property there is very expensive. Indeed the best way to make it cheaper is to tax the unimproved value of land, but of course that's unpopular with those who already own land there.

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mhaze,
Regarding the consequences of government borrowing, first let me make it clear three things that they're NOT:

• There's not any danger of running out of money. Hence my original answer to Philip S.

• There's not any danger of hyperinflation. That only occurs when the government sets the currency's official value above its market value, or when it needs to make foreign currency repayments.

• There's not any need to run surpluses in the future. We could run continuous deficits if we wanted to. I've made it clear that I don't think we should, but that doesn't alter the fact that we could.

Importantly it's not the borrowing that has the consequences; it's the spending. Public spending is no more inflationary than private spending, but not all spending has the same inflationary effect. Utilising otherwise idle resources is far less inflationary than competing with others for those resources. And that's particularly true for humans - it's far less inflationary to employ someone who would otherwise be unemployed than it is to compete for workers.

Too much spending leads to inflation; too little spending leads to unemployment. Right now we have too little spending.

Any questions so far?