No bright side to political arguments on fiscal plan

No bright side to political arguments on fiscal plan. The Australian’s editorial makes some interesting comments on the recent Australian Federal budget and the opposition’s (Labor’s) response:

The idea that the budget is an annual opportunity for Canberra to tip dollops of money into the pockets of people dependent, in one way or another, on taxpayers’ funds is as simplistic as it is unrealistic. Perhaps this is what happens when politicians surrender to the age of entitlement …

Decrying the gimmedats:

Mr Shorten, his MPs, the Greens and a range of interest groups insist on a bizarre game of accounting relativism where every time the government reduces or curtails the allocation of taxpayers’ funds, it also must take from other taxpayers — to demonstrate some distorted version of equity — a similar amount of the money they have earned.

This is a deliberately deceptive ploy that treats privately earned money as some sort of communal asset in the same class as funds collected from taxpayers and distributed to others.

It is unfortunate that we should have to make such a basic statement, but being allowed to keep your own money is not in any way the same thing as receiving money from the government.

Yet the increasingly shrill rhetoric from the ALP and the others on the Left — the Greens say it is a “budget for billionaires” — seems to envisage government as a vehicle for funnelling money to taxpayers. It sets the poor against the rich, young against the old and renters against homeowners in a deliberately divisive political tactic that is as ugly as it is obvious.

The Ancient Greeks had 500 odd years of experience with democracies. What they learned was that a democracy lasts until the population learns to vote itself the content of the treasury. Then comes degeneracy and chaos, followed by a strong man to restore order and integrity. Repeat.

UPDATE: By the way, have you noticed that the Federal Government, particularly when led by the Labor Party, is spending as though the debt will never be meaningfully repaid? It is as if they are expecting to repay the debt, if at all, in cheaper dollars whose value has been heavily eroded by inflation. Otherwise, surely you wouldn’t enter such debt without much more to show for it?

After his experience with Goldman Sachs, Malcolm Turnbull should know more than most any other Federal Parliamentarian about the real meaning of money. A week ago:

The Prime Minister plans to issue long-dated bonds – perhaps up to 30 years – to lock in historically low interest rates to part-fund projects such as Sydney’s Badgerys Creek airport, Melbourne’s Metro Rail and Brisbane’s Cross River Rail.

This is sensible even if there wasn’t a great global debt overhang, but is especially good policy given that there is almost certainly a large dose of inflation on the horizon that is not priced into the long bonds.