Economy, Banks, Gold, and other stuff.

[DOR]

When you find yourself stuck in a hole, it generally is an excellent time to stop digging.

Q-1 2002 to Q-1 2013 . . . from your selected starting point to the latest available data
Average annual percent change:

Non-farm employment: +0.3%
Total private employment: +0.3%
Service sector employment: +0.7%
Government employment including postal workers: +0.2%
Federal government employment including postal workers: +0.1%

Ratio at which non-farm and total private employment increased vis-à-vis federal government employment: 3:1

[cyppok]

When you find yourself stuck in a hole, it generally is an excellent time to stop digging.

Q-1 2002 to Q-1 2013 . . . from your selected starting point to the latest available data
Average annual percent change:

Non-farm employment: +0.3%
Total private employment: +0.3%
Service sector employment: +0.7%
Government employment including postal workers: +0.2%
Federal government employment including postal workers: +0.1%

Ratio at which non-farm and total private employment increased vis-à-vis federal government employment: 3:1

You do realize you just proved me right, unless there was no population growth from 2002 to 2013? Ergo labor force grew from *109 to 113 million but the population grew from 287 to 315 I know you don't really care about that. Because in relation to the population employment fell. But hell if you had 4 people working and 5 in population and now you have 5 working and 10 in population to you that is an improvement. Guess I am an idiot. Serves me right.

BTW the total improvement from 2003 to 2013 (*130 million to 134 million in relation to population growth is a joke.)

It seems awfully apparent that the numbers simply came to you like a vision from the sky. Unlike me you have no need for links to defend your thesis, you couldn't be making it up, no way. It seems you are way above citing anything you have to say because it automatically is true we don't even have to hear it before it comes out. *sarcasm continued*

(my 109 in labor force come from here )2002 Economic Census: Summary Statistics by 2002 NAICS - United States
(my 113 in labor force comes from here) 2002 Economic Census: Summary Statistics by 2002 NAICS - United States
[I chose surveys
[130 and 134 come from here->>> Total Nonfarm Employment - CES0000000001
Total Private Employment - CES0500000001
Government Employment - CES9000000001 ]

I know only positive numbers count in your mind its ok keep repeating the % change without in relation to, lets see how far you get.

Look I know median income doesn't count either so I ll just leave this.
http://www.cleveland.com/datacentral...own_7_per.html

$49,445: Median household income nationally in 2010, as reported last week by the U.S. Census Bureau.

$53,164: Median household income in 2000, inflation adjusted to 2010 dollars.

I also know that inflation by the gov't doesn't count food and energy so it is probably higher than that, I would guess 10% drop in real dollars perhaps more from 02 to 12.
I know its' still growth cause nominal is all that matters *sarcasm*.

So we got more jobs *yey* but not really cause the population grew far more *bummer*. And they pay more in nominal dollars *yey* but not really cause in real inflation adjusted numbers median income went down at least 10% *bummer*. But who cares it doesn't matter... RIGHT?! The only people whom make more is state, city, and federal inflation adjusted, and of-course the finance people.

[Parihaka]

ouch.

[snapper]

So, if you choose the time frame that’s backing your arguments up with facts, but if I do it’s manipulating the data, is that it?

The time period that Cyppok originally quoted included the more specific period you chose. While it may have fallen in one or two particular ("real government consumption expenditure fell by 0.6% p.a. in 2009-12 years") if the general trend is up it is you who are 'cherry picking' while refusing to acknowledge the general trend of the period.

by this incredibly loose definition, any company with a government contract would be counted as a 'government employee'.

That I would suggest depends on whether the company would be solvent or not without the Government contract. Certainly where Governments make laws that oblige taxpayers to pay for something and then award contracts to a single company to provide that service to the public, effectively creating a monopoly, then yes they are on the public purse and no different in terms who pays them from civil servants. Likewise if I nationalise a company.

the pure study of economics should be limited as much as possible, akin to maths as you say.

injection of social scientific/philosophical ideas distorts economic analysis. i've noticed austerians doing much more of this since academic...and real-life...proof that their theories are 1.) correct and 2.) economically efficient have been in serious decline.

moreover, i judge economists by a different set of standards, whether it is that of political economics or punditry, if they engage in such. IE, yes, i look at krugman's political commentary through a different set of lens than i do with his economic analysis.

I think it is naive to politicians or central bankers see the world in that way. The clearly don't.

what is your point? marxism was NEVER about economic efficiency, because according to them capitalism is inherently inefficient. of course they believed that their communist society would be more economically efficient, but that's a side-benefit to the overall goal of freeing humanity from exploitation by capitalists and the governments they buy to do their bidding.

the irony is that austerians/libertarians have a VERY similar viewpoint of the world, complete with big financial capitalists and the governments doing the exploitation. hell, frederick hayek advocated a guaranteed minimum income once the world was unified under a single government and economy.

I am honestly not sure if Marx started from an economic base or 'invented' his economics to justify his political/social form of idealism. The difference between a Marxist who believes that "capitalism is inefficient" and an Austrian economist is that the 'Austrian' believes the exact opposite. Marx says the Government must control money totally. We say Government must get out controlling and manipulating money. By doing so recently it has created 'too big to fail' business's and 'crony capitalism'. People are only free when acting of their own volition and a 'free market' should represent that without having taxpayers money thrown around for political reasons to distort the market.

however, the logical endpoint of neo-classical economics is that depressions and recessions are a GOOD thing, and should not be interfered with as interference distorts the economy.

Think what you're saying here... What is a recession but business's etc going bankrupt? Are you saying that ANY business going broke is BAD? Or perhaps only such inefficient business's should be kept alive may one day return to profit? How long and how do you judge? How will it effect the companies competitors who are efficient anyway? You are effectively making them pay for their less efficient competitors. Is that fair? Is it wise?

the entire development of 20th century economics past 1930 was a refutation of this statement, until the rise of the Austrian school.

Since that is essentially what we are debating I think you are begging the question. I evidently dispute that. I think you should have an explanation for the rise of the Austrian school too... Perhaps because only Austrian economics predicted the 2008 collapse?

i'd be interested to know if your views have evolved any.

Certainly my views have evolved... I don't think I would favour a return to the gold standard any longer as once I might have seen it as wiser. I have perhaps become less 'monetarist' at the same time and more 'Hayekian' as in the advisability of having private currencies but mostly that due to the example of Europe. I would still advocate the abolition of central banks and the currency manipulation they practice. Ask yourself this; who is Ben Bernanke? He is a private citizen the same as you or cyppok or Dale... He is NOT a Government employee or elected. By what 'right' then can he make money and you can't? He claims to be helping the country... Why can't you help in the same way? Because you'd be prosecuted for counterfeiting. One rule for all?

I seem to remember our series of conversations on these matters started on the 'currency war' issue... You presumably still deny that any currency war is under way. Try a google search for "currency wars" now... (about "About 31,900,000 results (0.13 seconds)" ) I know this proves nothing 'real' only that more people see it as I do.

Your whole analysis of the US economy post 2008, in my view, depends on refuting that the collapse of 2008 was the collapse a bubble (which to my mind is impossible) AND denying that current US economic policy, fiscal and monetary, will not cause new bubbles. Unless you can plausibly deny either or both the US is headed for more of 2008 and therefore the policy practiced post 2008 is counter productive and not 'efficient' in the medium to long term.

There is no way I can convince you that I am right and you are wrong. I understand this. While we may agree that a fact is as it is, inflation is x% or whatever, we shall have different interpretations of why this is so. We are entering a period of time where your view, which is more or less being practiced (though I acknowledge you would advocate more), WILL be tested in an extreme manner. In a way I hope that you are right because the consequences of me being right would be terrible in the short term though better in the long term. As you note there has been a great rise of interest in Austrian economics... if you and those practising the policies you advocate don't succeed in this great gamble (for that's what it amounts to) - and by almost mathematical certainty it will fail - then we may finally see the Austrian alternative tried. Change, real change, whether in science or politics or economics needs what Khun called a "paradigm shift" (though he was talking about science). Perhaps the collapse of the system while practicing the policies you advocate will allow you to think again. What follows is to be feared.

[astralis]

snapper,

please respond to my posts in one swoop, it is a bit hard to track all of the responses floating around.

(i call bullsht on your statement)

lol, you use a 10 year period starting with the beginning of the War on Terror (c) and bush's expansion of the armed forces, intel community, and DHS.

how about i use a slightly longer period of comparison.

Total Government Employment Since 1962

1962 - Total Federal personnel (thousands)

5,354

peaking at 1968: 6,639

today:

4,403

I think it is naive to politicians or central bankers see the world in that way. The clearly don't.

no sh*t, but it's bad form for ECONOMISTS to do the same. and this moralism has been the main austrian response to being proven disastrously wrong the last few years.

I am honestly not sure if Marx started from an economic base or 'invented' his economics to justify his political/social form of idealism. The difference between a Marxist who believes that "capitalism is inefficient" and an Austrian economist is that the 'Austrian' believes the exact opposite. Marx says the Government must control money totally. We say Government must get out controlling and manipulating money. By doing so recently it has created 'too big to fail' business's and 'crony capitalism'. People are only free when acting of their own volition and a 'free market' should represent that without having taxpayers money thrown around for political reasons to distort the market.

marx started as an economist first; the politics came later, when he concluded via his own branch of economics that capitalism was inefficient and would only lead to a suboptimal outcome.

either way, both marxist and austrian economics are both insanely optimistic at its core and dismissive of democracy, all the while proclaiming that democracy is its true goal.

the difference is that marxism wishes to dictate what individuals can buy (nothing) for the good of the nation, and austrian economics wishes to dictate what nations can buy (nothing) for the good of the individual.

Think what you're saying here... What is a recession but business's etc going bankrupt? Are you saying that ANY business going broke is BAD?

not at all. on the other hand, what you ARE saying is that ALL businesses going broke in a recession is GOOD, because they were clearly inefficient.

that viewpoint doesn't account for collateral damage, ie otherwise perfectly healthy businesses going broke because of a collapse in another field. again, this is an instance of incorrect reflection.

I think you should have an explanation for the rise of the Austrian school too

the austrian school is simply a revamping of neo-classical economics, minus the government regulation that Adam Smith, aka father of capitalist theory, called for.

Try a google search for "currency wars" now... (about "About 31,900,000 results (0.13 seconds)" ) I know this proves nothing 'real' only that more people see it as I do.

you know this is an empty statement yet you bring it up anyway.

Your whole analysis of the US economy post 2008, in my view, depends on refuting that the collapse of 2008 was the collapse a bubble (which to my mind is impossible)

this is incorrect. of course there was a bubble; there were MULTIPLE bubbles. in fact, bubbles are a refutation of austrian economics because it conclusively demonstrates that the economy is not perfectly efficient. the austrian retort is that the only reason why there are bubbles is due to government interference, which is pretty funny because there have been bubbles throughout history. (perhaps the dutch government was too big when there was the 'tulip' bubble, or perhaps the US government...in 1870...was too big then?)

AND denying that current US economic policy, fiscal and monetary, will not cause new bubbles.

there is proof, or there is no proof. austrians have been predicting another implosion since roughly 2009. the extreme test you speak of has already occurred-- it's called the worst economic recession since the Great Depression.

i told you earlier that i was quite willing to make you a bet regarding the predictions of our respective viewpoints. and that it would be easy to see, because if your view was CORRECT then we'd see a recession far worse than the one we just went through. and even though austrian economics state that such interference is economically harmful -immediately-, i was, and am, willing to put some short-term time limit for the sake of the bet. say, a 1-3 year timeframe.

you have not been willing to do so. so let's have the courage of our convictions to make this bet, yes? :)

until then, i think we've discussed this issue at some length, so i shall end here and let you have the last word, if you like.

[DOR]

notice after years of explosive growth the decline is laughable about 10,000 while the private sector bleeds tens of millions of jobs. The proportionality is absurd. Granted they may have fired more people into this year it is still at record levels.

What facts you just pontificate your standing out of thin air, prove it. Show me those facts that say gov't went down. There are quiet a few new departments that weren't present like homeland insecurity, and other czars.

No, I refuted your point about growth in government.

By the way, Q-1 2013 was the 10th quarter in a row of year-on-year contraction in real government consumption expenditure.


ADD:

Here are the links to my data:

1) [http://www.bea.gov/iTable/iTable.cfm...tep=1&isuri=1]
2) [http://research.stlouisfed.org/fred2/]

You do the math.

[DOR]

cyppok,

So, you couldn’t prove a surge in government employment, and you couldn’t prove a collapse in private employment. So, you resort to the ratio of employment to the population, without taking into consideration why people might not be in active employment.

In 2002-12, the population grew +0.9% p.a., and the labor force +0.7% p.a. Labor force is self-defined (“are you employed or looking for work?”).

Civilian employment was 37.6% of the population in the booming 1950s, 36.7% in the roaring 1960s, 40.6% in the stagnating 1970s, 44.9% in the double-dip 1980s, 47.0% in the go-go 1990s and 47.7% in the bubbling 2000s. Since January 2010, it has averaged 45.1%, or right in the middle of the range and better than anything up to the 1990s.

= = = = =

Data

I don’t use one-off census surveys; I use consistent time series that measure the same thing over long periods.

I use useful time periods, like decades, not whatever some survey happens to have. Why 2002? Why should an 11 year time period be more useful than 10 years?

And, what cosmic brain blast gave you the absurd notion that the US government’s “inflation adjusted” median household income figures don’t include food or energy? Did Fox News [sic] tell you that core inflation doesn’t include food and energy, and you then decided that ALL inflation measures are that way?

Here’s a lovely little graph of Real disposable personal income, 2002-2012. Please note that the 2012 figure is about $2,800 higher than the 2002 figure.
[FRED Graph - FRED - St. Louis Fed[1][id]=A067RX1A020NBEA&s[1][range]=10yrs]

[snapper]

Your whole analysis of the US economy post 2008, in my view, depends on refuting that the collapse of 2008 was the collapse a bubble (which to my mind is impossible) AND denying that current US economic policy, fiscal and monetary, will not cause new bubbles. Unless you can plausibly deny either or both the US is headed for more of 2008 and therefore the policy practiced post 2008 is counter productive and not 'efficient' in the medium to long term.

of course there was a bubble; there were MULTIPLE bubbles. in fact, bubbles are a refutation of austrian economics because it conclusively demonstrates that the economy is not perfectly efficient. the austrian retort is that the only reason why there are bubbles is due to government interference, which is pretty funny because there have been bubbles throughout history. (perhaps the dutch government was too big when there was the 'tulip' bubble, or perhaps the US government...in 1870...was too big then?)...there is proof, or there is no proof. austrians have been predicting another implosion since roughly 2009. the extreme test you speak of has already occurred-- it's called the worst economic recession since the Great Depression.

ARE bubbles being created by current policy? You know they are and therefore another (and worse in my view) bust will come. As for the timing if I knew that for sure I'd sooner or later be a very wealthy Lady. Three years? Maybe... I do not claim to be able forsee all the trends as Mr Bernanke and his ilk would have to be able to do to make a solely economic judgement on interest rates. Their decisions are always political albeit with a small p. The whole basis of capitalism based on free markets in the hands of an 'economist' who claims to be 'mainstream' becomes a political football. Politicians should get out of the markets - they are no good at it.

Please note that the 2012 figure is about $2,800 higher than the 2002 figure.

Not counting food or fuel price increases... which is insane as most 'normal' countries DO. Certainly the UK does... might explain our higher inflation rate! The US has even gone so far as readjust the way it calculates GDP recently... all money spent on research, though not taxable, is included in GDP. No other country in the world to my knowledge includes research as GDP as clearly whatever research you are doing might well end fruitless. Basically your graph shows the devaluation of the $. People have more $s in their pockets but can buy less, particularly food-wise, as the recipients of food stamps growth shows. Earnings are falling in the US.

and chart to prove it...

[astralis]

snapper,

sigh, i tell myself i'll quit...

ARE bubbles being created by current policy? You know they are and therefore another (and worse in my view) bust will come.

IE, i have no proof of this but everyone knows this to be true! godot won't come this evening but surely tomorrow.

Not counting food or fuel price increases... which is insane as most 'normal' countries DO. Certainly the UK does... might explain our higher inflation rate!

Still Coring After All These Years - NYTimes.com

addresses both points of 'not counting food/fuel increases' (which i've addressed a million times from a different angle previously) as well as the 'they must be lying to us' bit. note that the graph krugman uses addresses the CPI including food and energy, and thus is a more expansive measure of consumer cost than the Economist Big Mac index. also note the REASONING why economists/the Fed use core inflation.

finally it'd be nice for some sort of acknowledgment that my bs statement re: government employment was, well....correct. :)

[DOR]

What he said.

- - - - -


snapper,

What part of "chained dollars" don't you understand?

[dalem]

Can't really contribute to this debate because I'm fairly ignorant of any economic theory more complex than "buy low, sell high", but I will ask a question that I intend to be independent of any "-isms" (plus this is the only thread in this forum seeing any action):

How do folks think the "basic" of personal economics we all (I think) grew up with, i.e. "spend less than you earn and you are at least slightly ahead of the game" holds true these days as compared to, oh, 30 years ago? 50?

Or is that a question without meaning?

-dale

[snapper]

IE, i have no proof of this but everyone knows this to be true! godot won't come this evening but surely tomorrow.

As I recall it was me that asked you if current policy might possibly cause more bubbles and you who declined to answer. To me it is self evident that more bubbles exist, the most worrying of which is the bond bubble. To sustain that QE must go on until the US Government starts to address the deficit... Well there's no sign of that any time soon so there is a real danger of the currency becoming worthless. Remember that due to the nature of the fractional banking system for every $1 the Fed 'creates' on it's magic pc banks actually double or triple it. Hence stock market highs. Just because you don't WANT to see it I am not obliged to blind myself.

What part of "chained dollars" don't you understand?

David, I do not a problem with the 'chaining' system in itself, merely in what is counted. In a way the obsession with treating economics as a form of maths, as astralis advocates, means it becomes purely semantic; a set of tautologies. Thus in GDP, inflation and Federal employee numbers how you define what constitutes a member of the set dictates the results which you can expect. The 'real world' gets left behind. For me inflation should say something about how hard, or easy, it is for the man on the street and as eating is always going to be one their most important expenses not counting any rises in food prices is refusing to acknowledge the truth for the average person.

Likewise the change in GDP calculation to include R & D and even pensions in the future is insane. "Research and development (R&D) spending, which shouldn't even be accounted for as investment, adds a significant amount to the U.S. GDP number. It accounts for around 2% of U.S. GDP. Art, music, film royalties, books and theatre add another 0.5% to U.S. GDP. Another adjustment has been made to pension accounting. Previously, pension spending was included in GDP. After this adjustment however, we also look at the "promise" to pay out pensions. So we are talking about imaginary numbers that are now included in GDP. A last example is found in real estate. Commissions, legal bills and expenditures on real estate transactions are included in GDP as "investment." Obviously these expenditures aren't associated with real production. One of the consequences is that comparing the GDP number between other countries and the U.S. is not transparent anymore. It is like comparing apples and oranges." U.S. Government Invents New Way Of Calculating GDP - Seeking Alpha If you want to read the full paper it's here; http://www.bea.gov/scb/pdf/2013/03%2...on_preview.pdf

The same can be said of 'Federal Employees'; if you want to count those who receive their salaries directly from the Federal Government alone you are missing the reality of the numbers who are dependent on Federal Government subsidies.

It's a bit like defining 'hot' as the average temperature of the sun. Fine... by such a definition a pan of boiling water is 'cold'. Still going to get your hand burned if you it stick it in the pan of boiling water. To make definitions that don't have any relevance to the ordinary person and cannot be compared to other countries, to move economics into the 'academic sphere' or to manipulate the statistics for political purposes, whichever you chose to call it, is to wish not to see what you don't like.

How do folks think the "basic" of personal economics we all (I think) grew up with, i.e. "spend less than you earn and you are at least slightly ahead of the game" holds true these days as compared to, oh, 30 years ago? 50?

-dale

I'd say that in simple terms that's a fairly safe way to proceed. What you don't spend you save and invest (house, new car etc). Of course what people should be doing at present is saving but with interest rates at artificially low numbers the Fed is not creating any incentive to do so. Instead people are encouraged to borrow and spend more as borrowing is cheap. With the Fed printing $85bn per month the value of peoples savings will only decline... so again the incentive is to borrow and spend more. This is what I mean when I say they are trying to create more bubbles; creating more circumstances that lead upto the 2008 crash. Of course they don't include fuel or food prices when calculating inflation (though they do in the UK) so a wise investment would be freezers full of food or silos of fuel, or futures. Never mind you will see US GDP magically increase in July due to their new method of calculating it that the rest of the world does not use. astralis and to a slightly lesser extent (I think) DOR believe that more spending and printing now is the only way to save to economy...I think it is just lining up another crash as bubbles always burst. My advice is to save your money in something that will retain value more than the $, their advice is spend your money, borrow more if you want, and there won't be a problem.

Whatever you do do NOT buy gold futures. They already crashed that once and have made it very clear they can do so anytime they wish. Why there is no investigation into this blatant manipulation of the COMEX (gold futures market) is a subject for conspiracists. A good description of what went on is here; Gold Trends.Net, LLC. - The Free Daily Blog If you want to invest in gold or silver buy real gold or silver, not a piece of paper that says I will own x units of gold next year.

[astralis]

snapper,

As I recall it was me that asked you if current policy might possibly cause more bubbles

you'll need to show me where i 'declined to answer'. first, you need to tell me which of the policies you're questioning, fiscal or monetary. either way, though, neither of them will cause bubbles because we are in a liquidity trap.

Well there's no sign of that any time soon so there is a real danger of the currency becoming worthless

stop avoiding the question. WHEN. if there's a real danger, QE must go on until USG reduces the deficit (said no economist ever), blah blah blah-- this is something that should happen soon.

David, I do not a problem with the 'chaining' system in itself, merely in what is counted. In a way the obsession with treating economics as a form of maths, as astralis advocates, means it becomes purely semantic; a set of tautologies. Thus in GDP, inflation and Federal employee numbers how you define what constitutes a member of the set dictates the results which you can expect. The 'real world' gets left behind. For me inflation should say something about how hard, or easy, it is for the man on the street and as eating is always going to be one their most important expenses not counting any rises in food prices is refusing to acknowledge the truth for the average person.

Likewise the change in GDP calculation to include R & D and even pensions in the future is insane. "Research and development (R&D) spending, which shouldn't even be accounted for as investment, adds a significant amount to the U.S. GDP number. It accounts for around 2% of U.S. GDP. Art, music, film royalties, books and theatre add another 0.5% to U.S. GDP. Another adjustment has been made to pension accounting. Previously, pension spending was included in GDP. After this adjustment however, we also look at the "promise" to pay out pensions. So we are talking about imaginary numbers that are now included in GDP. A last example is found in real estate. Commissions, legal bills and expenditures on real estate transactions are included in GDP as "investment." Obviously these expenditures aren't associated with real production. One of the consequences is that comparing the GDP number between other countries and the U.S. is not transparent anymore. It is like comparing apples and oranges." U.S. Government Invents New Way Of Calculating GDP - Seeking Alpha If you want to read the full paper it's here; http://www.bea.gov/scb/pdf/2013/03%2...on_preview.pdf

The same can be said of 'Federal Employees'; if you want to count those who receive their salaries directly from the Federal Government alone you are missing the reality of the numbers who are dependent on Federal Government subsidies.

It's a bit like defining 'hot' as the average temperature of the sun. Fine... by such a definition a pan of boiling water is 'cold'. Still going to get your hand burned if you it stick it in the pan of boiling water. To make definitions that don't have any relevance to the ordinary person and cannot be compared to other countries, to move economics into the 'academic sphere' or to manipulate the statistics for political purposes, whichever you chose to call it, is to wish not to see what you don't like.

all of this amounts to saying "NONE OF THE DATA AGREES WITH ME, THUS THE DATA MUST BE WRONG AND MANIPULATED".

ie, every time you've made an assertion i've given you multiple proofs otherwise, and your response is to ignore it. or throw in questionable sources. (seriously, using Seeking Alpha-- a stock investment blog-- as your source?)

Why there is no investigation into this blatant manipulation of the COMEX (gold futures market) is a subject for conspiracists.

and now the full descent into conspiracy theory. NOW we're truly done.

[astralis]

dale,

How do folks think the "basic" of personal economics we all (I think) grew up with, i.e. "spend less than you earn and you are at least slightly ahead of the game" holds true these days as compared to, oh, 30 years ago? 50?

1. from a personal economic standpoint, good but incomplete. given stagnation of middle-class wages, elimination of defined pensions/benefits after retirement, and the uncertainty around SS, the average person must have a basic understanding of financial investing and economics to earn a decent return on what they have saved. the shift from defined pension to 401K and IRAs mandates this.

2. from a national standpoint, this is a prime example of why you can't anthropomorphize personal economics to national/international economics. if everyone suddenly started to save more right away, demand craters, causing a recession/depression. there needs to be countervailing spending -somewhere- to keep the economy running. IE, other countries, the government, etc.

[Gun Boat]

.....or increase taxes. The report doesn't specify that it can only be one or the other. Despite our self-perception we are not a high tax society by OECD standards. That doesn't mean there aren't areas we can & should cut back in. Unfortunately the incoming government is probably going to leave middle class welfare alone & just hit the peole at the bottom again.



True, but I'd rather try to cut back spending in an economy that has been spared the worst aspects of an economic downturn than try to rebuild one that has been hit hard.

As it is Australians have convinced themselves that we are in the midst of the latter and are among the truly wretched of the earth (I shit you not, people here genuinely think we are one step shy of Greece). Expect howls no matter what happens. We are very good at that.

You really think it is prudent that we continue down the deficit path? We have watched other be consumed by their debt and you advocate that we follow their path?