one thing for sure and that is Shorten and the Greens will drive power prices up much higher than the ridiculous levels they are at now. We should be a nation that rewards hard work instead the 'elites' and social engineers will continue to line their pockets while virtue signalling to everyone else. More money will be wasted on schools by Labour while the grades continue to fall. Labour will again fail to achieve a budget surplus giving 1001 reasons why it is right to drive the country in more debt. Unfortunately we have a very dumbed down electorate. With the education system continue to brainwash kids it can only get worse.

Aidan, you clearly have no time for battlers who try to build up often meagre savings via interest. You are OK with the idea of even less income for them than the already ridiculously low interest rate we now have provides. Lowering interest rates is a really lazy tool used by incompetent managers and regulators. And, you still insist that big government debt is the solution to crises - fix the problem by increasing what brought about the problem in the first place.

Still, you have an opinion, which is preferable to some smartarse preferring to sneer at a typo to avoid having an opinion.

But...but ttbn, I do have an opinion.

It is my opinion that you don't have a sense of humour...at least when you're the butt of the joke.

Aidan,

I came across this the other day in regards to your silly notion that we can borrow ad infinitum....
http://www.igmchicago.org/surveys/modern-monetary-theory

42 eminent economists (ecomicist?) and not even one agrees with your daft notion. Indeed not even one is neutral on your daft notion. The only issue is how vehemently they disagree with your daft notion.

My favourite comment was "If this were true, each such country could finance the purchase of all of the world's output, which is obviously impossible."

ttbn,
From a moral perspective, reliance on interest is a bad thing. As a Christian I've read what the Bible says about usury. From a more practical standpoint, it keeps the poor in thrall to the already rich (or the banks, which have proved themselves to be just as bad). And from an economic productivity perspective, it's better for people to invest in improving their own skills than to accumulate money. Having lower interest rates is even better for business, because it reduce finance costs and enables long term investments to be profitable.

I also think it's a bad thing for people's standard of living to be so dependent on how much money they've already accumulated - it would be better for people to have a high standard of living throughout their lives. We do of course have to consider the impact on retirees, but they're well compensated with pensions, so I don't see it as a big problem.

However, supposing hypothetically that we want to return to the era of higher interest rates, the way to achieve them without sending the country into recession would be to greatly increase government deficit spending and keep it high, as it was in much of the 20th century. There's no technical reason why the government can't run continuous deficits over the whole economic cycle (though it's a policy I oppose because it would require high interest rates in order to control inflation).

Our economy depends on spending, whether public or private. The more productivity rises, the more spending is required to keep people employed. Spending requires borrowing; increasing spending requires increasing private borrowing (which can be induced by cutting interest rates) or increasing the amount the government borrows.

I do have a sense of humour, mhaze; you are just not funny. Your attempt at it - a thinly disguised intent to make me the “butt of a joke” - makes the 'Long March’ in China look like an hour with Michael MacIntyre. This is the third time you have shown your contempt for me.

Aidan,

So, you keep your money under the bed? Or are you still working and living week to week? I cannot believe that anyone who claims the knowledge that you claim doesn't have his money working for him. Whether it's in a bank, or tied up in superannuation if he is retired.

How does interest keep the poor “in thrall to the rich”?
How does improving skills (good in itself) instead accumulating money help the economy? Why can't both happen?
What good are “reduced expenses” to business via lower interest rates if people can't accumulate and save money to purchase from those businesses?
How do people have a “high standard of living throughout their lives” if they haven't the money to fund it?
Should pensioners not be allowed to save what they can from their pensions and receive interest for occasional treats and luxuries?
Why have you not learned that greater spending by big government has never worked, and is anathema to free enterprise? History is strewn with failures of big government spending.
Your final paragraph is a real doozy. The correct formula is SAVING and spending less than you have saved.

You are a hard man to fathom, Aidan. I don't mean to rude but perhaps your ideas just prove that you have a much better sense of humour than mhaze has.

mhaze,
What exactly do you think my "daft notion" is?
If you look at the wording of the questions that were asked, you'll see they were strawmen. The first question is too vaguely qualified and contains a non sequiter which seems designed to provoke a negative response.

If Question A were "Countries that borrow EXCLUSIVELY in their own FLOATING currency should not worry about government DEBTS because they can always create money to finance their debt" then you'd get a lot more agreement. Not unanimous, as false assumptions are rife amongst economists, but you'd have got rid of three logical flaws. Indeed there's a minor fourth flaw you could get rid of by stipulating that the country have an effective taxation system. It sounds obvious, but Weimar lacked one and consequently suffered hyperinflation until one was implemented.

Deficits always have consequences in the real economy. At times like this, the consequence can be keeping us out of recession. But when the economy's booming, inflation is a more likely outcome - though that can be counteracted by raising interest rates to discourage private spending.

Question B is quite obviously wrong. Economies don't have infinite capacity, and at some stage the government will be constrained by a lack of real resources. What we can truthfully say, though, is: Countries that borrow EXCLUSIVELY in their own FLOATING currency can CREATE AS MANY JOBS as they want by creating (and spending) money.

Strawmen prove nothing. They certainly don't represent my position, nor even the Modern Monetary Theory they purported to be based on.

__________________________________________________________________________________

ttbn, you misunderstand what I was saying. I'm not against people saving money, but I don't think we should set monetary policy to encourage them to do so.

And I stand by my final paragraph: it's spending, not saving, that the economy depends on. Employing people requires money to be spent, not saved.

I'll post a more detailed response later.