Thread by @_ClaireConnelly, While ScoMo's spouting his whole living within our means schtick here's something [...]

While ScoMo& #39;s spouting his whole living within our means schtick here& #39;s something I wrote four years ago about why this whole narrative is incredibly destructive to the economy and to the prosperity of the population:
https://www.abc.net.au/news/2016-12-08/the-great-living-within-our-means-con/8064268.">https://www.abc.net.au/news/2016...

The great 'living within our means' con: Why you're more in debt than ever - ABC News

The Government cannot run out of money, and at times like this — when it saves instead of spending — the only thing that can make the economy grow is if we do the borrowing.

https://www.abc.net.au/news/2016-12-08/the-great-living-within-our-means-con/8064268

The government is not a household. The budget is not a credit card. The RBA doesn& #39;t borrow to spend. It& #39;s our currency. So long as supply does not exceed demand (affecting inflation), government spending is not destructive. In fact it is essential.

Done correctly, government spending pays for itself by orders of magnitude and across generations. But nobody wants to hear it. Not sure what it will take to get more perspectives and critiques on the lines used to sell austerity. It& #39;s so tiresome.

Also, despite significant QE and monetary interventions by the RBA, inflation has remained persistently below it& #39;s 2-3% target. There is a significant case for greater spending. https://www.afr.com/policy/economy/reserve-bank-reaches-the-limit-to-what-it-can-reasonably-do-20190602-p51tqj">https://www.afr.com/policy/ec...

Reserve Bank reaches the limit to what it can reasonably do

Central bank monetary policy cannot, of itself, lift the economy’s growth trajectory. It cannot create the higher productivity needed to underpin prosperity.

https://www.afr.com/policy/economy/reserve-bank-reaches-the-limit-to-what-it-can-reasonably-do-20190602-p51tqj

I& #39;m repeating myself but Philip Lowe has repeatedly said interest rates has reached the limit of its effectiveness and has emphasized the urgency of fiscal stimulus (spending). And that was before the pandemic hit our shores.

https://www.bis.org/review/r190826a.htm">https://www.bis.org/review/r1... https://www.afr.com/policy/economy/why-the-pm-keeps-ignoring-the-rba-governor-20200206-p53yfz">https://www.afr.com/policy/ec...

The RBA message the PM doesn't like

The Morrison government isn't so keen on Lowe's message that governments should be doing a lot more to ensure strong and consistent growth.

https://www.bis.org/review/r190826a.htm

Also this: https://www.rba.gov.au/speeches/2019/sp-gov-2019-11-26.html">https://www.rba.gov.au/speeches/...

Do yourselves a favour, Australia. Pre-order a copy of @StephanieKelton& #39;s The Deficit Myth. Absolutely essential reading, based on decades of research busting the & #39;how do we pay for it?& #39; paradigm with facts and evidence. https://dymocks.com.au/book/the-deficit-myth-by-stephanie-kelton-9781541736184">https://dymocks.com.au/book/the-...

The Deficit Myth by Stephanie Kelton

Buy The Deficit Myth by Stephanie Kelton, HardCover format, from the Dymocks online bookstore.

https://dymocks.com.au/book/the-deficit-myth-by-stephanie-kelton-9781541736184

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