perceptions_now
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Australian Politics
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Perth WA
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stryder wrote on Aug 18 th, 2013 at 8:07pm: The liberals have stated there case that since government revenues are falling that we need to look at what we are spending and make some serious cuts
Labor on the other hand dont think so, they think whatever debt we are piling, we can handle it, lets keep spending like a teenager with gold credit card.
Whos right, whos wrong ???? Perceptions Sorry, for the delay in responding! Things aren't quite that straight forward, BUT in the past both arguments have been correct, given the right point in the Economic cycle and IF the timing was correct then both/either would have had a fair chance of the Economy responding in the desired way!
However, for most of the duration of the modern Economic era both types of Economic theories (Austrian & Keynesian) have always had favorable Economic conditions, as far as the major drivers were concerned.
THOSE ECONOMIC DRIVERS BEING DEMOGRAPHICS, ENERGY, TECHNOLOGY & A GOLDILOCKS CLIMATE, WITH A NET RESULT BEING THAT DEMAND STEADILY INCREASED & ACTED AS A BACKDROP, WHICH WOULD EVENTUALLY GET THE ECONOMY BACK ON GROWTH, NO MATTER WHAT THE POLITICIANS, ECONOMISTS & CENTRAL BANKERS DID OR DID NOT DO! .
So eventually, at most times during the modern Economic era, the Politicians (both Labor or Liberal) could claim they had been RIGHT and their policies had been proven successful.
IN TRUTH, ON MOST OCCASIONS, IT WAS SIMPLE THE FAVORABLE MACRO ECONOMIC CONDITIONS REASSERTING THEIR INFLUENCE, WHICH EVENTUALLY GOT GROWTH GOING AGAIN!
Now, those favorable Macro Economic conditions have leveled off and at least 3 of them are about to go into reverse.
So, what was true, is no longer true AND WE WILL NOW FIND THAT NEITHER THE LIBERAL OR THE LABOR BASIC THEORIES WILL RETURN ECONOMIC GROWTH & THEREFORE THE STATUS QUO, "TO NORMAL", AS THOSE SAME MACRO ECONOMIC DRIVERS WILL PREVENT DEMAND FROM RETURNING, NO MATTER WHAT ACTIONS ARE TAKEN.
So, at this point in time, BOTH LABOR & LIBERAL ARE WRONG!
It is very likely, that in the short to medium term, we (Locally & Globally) will find the going pretty tough, BUT IF the pain is shared fairly by all, then the Economy MAY recover, BUT it will take a considerable amount of time!
However, IF the usual suspects try to get better outcomes for themselves & their own "constituents" & there is no similar Global actions, particularly to raise Productivity, THEN ANY RECOVERY WILL BE A LOT LONGER IN COMING, IF INDEED IT DOES ARRIVE!
Not very nice reading, I know, BUT SOMETIMES REALITY JUST ISN'T PLEASANT, AS I'M SURE MANY OF THOSE WHO WENT THRU THE GREAT DEPRESSION WOULD AGREE!
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