For the last two years the media has been full of the budget crisis and the need to tax, tax, tax to bring it back to zero or surplus. I think instead of “tax, tax, tax” the cry should be “jobs, jobs, jobs”.
We did have 4.3% unemployment before the RBA’s rate hike madness back in 2009 (we did picket all their offices and we did warn them!) It is now 6.5%. This means that thanks to, I believe, our inept Governor, Stevens, we have a million people who now are either unemployed or underemployed compared to 2009.
So how desperate a need is there to “fix the budget” that economists and the media are crying out for?
The second chart shows the amount of money that the government is paying for its huge borrowings. How real is the disaster that the government faces in servicing these “huge” borrowings.
“A” Shows that in the past on these debts, the government has been paying up to 7% on their bonds. Now at “B” you can see that the government is borrowing at or below inflation. This means that for every dollar the government borrows to create jobs, jobs, jobs, it is actually paying nothing for it. So where’s the problem!
The government should be borrowing to the hilt now with long term 20-year loans and pouring that money into jobs, jobs, jobs. These jobs create real benefits to you and me and pay real taxes to State and Federal governments. This way the budget surplus gets fixed in a positive way.
So let’s stop the budget bull…. Let’s move to jobs, jobs, jobs.
Right now all the State Treasurers are meeting in Canberra. Let’s hope they see the light.