"Any questions so far?"

Yes. Why did you feel the need to take hyperinflation off the table? No one had mentioned it. Perhaps you see it as more of a problem than you'd care to admit?

Its probably true that hyperinflation for Australia in the medium term isn't a threat, because, as you imply, devaluations will keep the threat under control. But avoiding hyperinflation by acquiescing to ongoing devaluations is hardly a palatable situation. Devaluations are inherently inflationary, make the country poorer and are really an admission and an acceptance that things are worsening. All else being equally, nations ought to seek to strengthen, not weaken their currency.

"There's not any danger of running out of money."

Strictly speaking, in theory, that's true. But to use you speed limit analogy, just because there's no chance of being fined for doing 300kmh doesn't mean anyone would do it. There are other considerations.
Equally with printing money. Theoretically it can go on forever, but it won't because there are other considerations eg inflation, devaluation, middle-class impoverishment.

Those seeking to satisfy their own desires to see bigger government by having open ended spending, need to look beyond the here and now and examine the ramifications many steps ahead. You need to consider many steps ahead.

At the moment, governments can get away with showing no fiscal rectitude because interest rates are historically low. But there's no reason to think that will remain the case, especially if the USA economy starts to boom. When/if rates start to move to historic norms, the profligacy of the past decade will be apparent. At that time, there will be either massive spending cut-backs or a downward spiral of higher deficits, weakening currency and growing inflation.

At that time, those of a certain leaning will blame the problems on capitalism-multinationals-banks-not us.

mhaze,
"Why did you feel the need to take hyperinflation off the table?"
Because it's the main reason why people are scared of printing money. Even with nobody

"No one had mentioned it."
Although nobody on this tread had used that word, Philip S had referred to the phenomenon of a currency becoming worthless as money is printed. That's hyperinflation.

"Perhaps you see it as more of a problem than you'd care to admit?"
No, it's something we're totally immune from. However fear of it is a big problem because it leads to us printing too little money.

"Devaluations are inherently inflationary, make the country poorer and are really an admission and an acceptance that things are worsening."
Largely true, though they're less inflationary than people think.

"All else being equally, nations ought to seek to strengthen, not weaken their currency."
In the long term, I agree with you totally. Nations should be investing in things that improve their productivity, as increasing production is the main thing that boosts the currency's long term value. The two things most likely to result in an increase in production are education and infrastructure - including rail links to airports!

But keeping fiscal policy tight when there's significant unemployment is a very bad idea. It adversely affects production, so it may not boost the currency's short term value - but if it does, those gains will soon be forgotten because the value is self correcting (see my April 14 post).

I'll deal with the rest of your points tomorrow.

mhaze,
Firstly I apologise for the lack of clarity due to the obvious trivial errors in my first two paragraphs. Let me know if you require further clarification.

Now, addressing the rest of your points:

"At the moment, governments can get away with showing no fiscal rectitude because interest rates are historically low."
Just remember Hoovernomics does NOT amount to "fiscal rectitude". Fiscal policy should be directed to serve the needs of the economy, not any particular budgetary outcome.

"But there's no reason to think that will remain the case, especially if the USA economy starts to boom."
If the USA economy starts to boom, it will be the result of the USA abandoning its attempts to balance the budget in the short term, and instead investing in tax cuts for the rich.That's not a good investment, but better than not investing at all.

"When/if rates start to move to historic norms, the profligacy of the past decade will be apparent."
On the contrary, the stupidity of the lack of spending this past decade will become more apparent. We could have invested far more in the things that grow the economy and still avoided short term inflationary pressures. But instead we chose not to; we held the economy back, and when the infrastructure's needed it won't be there.
(tbc)

mhaze (continued)
"At that time, there will be either massive spending cut-backs or a downward spiral of higher deficits, weakening currency and growing inflation."
How do you imagine the government will be running higher deficits in those circumstances? If our dollar is lower, it's far more likely we'll be running an external surplus - which means it's impossible for the government to run a deficit unless the private sector's deleveraging.

The kind of spiral you're referring to is illogical. It seems to be based on a misunderstanding of what happened in the 1970s. What do you imagine will be driving all this inflation?

And in the very unlikely event that we do get high inflation, all we have to do is put up taxes and the problem will go away.

"At that time, those of a certain leaning will blame the problems on capitalism-multinationals-banks-not us."
While the government seems to be running the economy for the benefit of multinationals and banks rather than Australians, it's hardly surprising that multinationals and banks will be scapegoated.