Posted by: graemebird | May 18, 2009

The Way To An Immediate And Explosive Launch Out Of Recession And Trade Deficits.

People call other people who are men of reason…. they call them names. They say that they are harsh. They say that they are cold. They talk about “cold hard LOGIC”. But this is not the reality of things. They talk about cold hard CASH as well. But “Cash is warm. Its purdy. It comes in all these purdy colours… goes with anything yoh wearin.”

As with cash the same goes for human reason. Human reason is about human warmth and feeling taken in the widest perspective. But those who have the self-image of practicing it in the sphere of political economy have been told from many years back that they are harsh, cold, unfeeling and nasty. And some of them accept this fantastic and productive input and contstructive criticism (not, not and not) as part of their self-image.

But fast moves to more freedom have to be anything but harsh. We want to be kind to people. There is no use being nasty to people. Kindness is its own reward. And a public policy based around nastiness need not enter the picture. In fact to think that way is to enter into the leftist side of things. Is to enter into the idea of human sacrifice.

I knew for a fact that the Americans cost-of-living, or consumer-price-inflation figures were rigged. I just assumed that ours were rigged as well but not nearly as bad. But this suspicion may have been somewhat confirmed over the last couple of years when it came to our attention, that a lot of our pensioners, and particularly single pensioners, were living in squalid conditions.

No free enterpriser ought to have ever said “So What. They knew they were getting old…” or something like that. It became apparent that old age pensions needed to be boosted. I made this point on radio talkback. I said that with the younger blokes if we pull the rug from underneath them, or with the public servants if we sack them, well there is the opportunity to make it up to them later. But I said with some of these diggers we just don’t have the time. I said that some of them, left in squalid conditions, may be in that state for only three years and then they will die, leaving us no time at all to keep faith with them.

The last part of the conversation was the talk-show host saying “I agree.”

Now this is the thing. We need to wean off the old age pension. But that does not mean we need to leave our mates in squalor. The pension age can be increased 1 day every 2 days that passes. If thats too harsh then 1 day every 3. But if that also seems to harsh we can increase the tax free threshold for the people a bit younger than pension-age in order to allow them to save more the tide them over between when they can no longer work, and when they will get the pension.

Certainly Rudd is going down the wrong track reducing the amount that you can squirrel away for your old age without advanced thieving. We want our retirees to be very wealthy with high tax-free thresholds and we want them to be able to increase their tax-free thresholds by taking on a friend, or a relative, or a new lady, as a registered dependent. And we want the capital that these old guys have accumulated to be buying producer-goods and not being wasted on investments in taxeater-ego.

Now all these increases in tax thresholds, and double expensing of labour costs for the older guys or the disadvantaged. Or tax-exemptions for the purpose of getting prices down quickly…. all this can lead to loss of government revenue. Where do we make up that budget from?

We want all our levels of government to save up for any big purchases. We don’t want any level of government to ever borrow. Rather we want them to pay off debt.

So where is the funding coming from for these warm-hearted tax exemptions.

Well cable-guy Adrien has linked back to my earlier good works. A very long time ago I had a look at all the federal government agencies there were, and made a very quick list of all the departments you could erase tommorrow and not hurt anyone. Nobody dies. No need to be vicious. No human sacrifice.

What you want for an immediate turn-on-the-dime explosive growth and reductions in our trade deficit is to lose all these guys right away. And don’t pay them any redundancy. And if you are really doing it right, make them sign something that stops them from going on the unemployment benefit. Well some of them will take redundancy yes. Some of the older guys particularly. And some of them will not be able to cope with the idea of not having the backstop of going on the benefit.

You see you have to bribe away their payouts or their ability to gain benefits with tax vouchers. You agree on the tax voucher, they clear their desk, they get the tax voucher. We can afford the tax vouchers. But we cannot afford for them to go on bludging in the public sector or for us to be paying them out, and they only get rehired by the next government.

And we cannot let them become part of the economic DEstablizers that the non-aged welfare represents.

WELL……… how are we going to afford for all layers of government to go into surplus immediately, for the older blokes to get a bit of an income boost, for the myriad tax exemptions and increases in the tax free threshold that we need to conduct rational and kind policy to go ahead?

Well as I said cable-guy Adrien has reminded me of my list of bureaucracies, all but one or two, that we could close down right away, and nobody dies:

“If we want immediate double digit growth we could destroy the following bureaucracies tommorrow, convincing most of the newly unemployed to take tax exemptions over redundancy payouts:

(Australian Population Health Development Principal Committee

Anglo-Australian Telescope Board

ASC Pty Ltd

AusIndustry

Australia and New Zealand Food Regulation Ministerial Council

Australian Agency for International Development

Australian Broadcasting Corporation

Australian Bureau of Agricultural and Resource Economics (ABARE)

Australian Centre for International Agricultural Research (ACIAR)

Australian Communications and Media Authority (ACMA) (ACMA)

Australian Community Pharmacy Authority

Australian Competition and Consumer Commission (ACCC)

Australian Competition Tribunal

Australian Energy Regulator

Australian Fair Pay Commission (

Australian Film Commission (AFC)

Australian Hearing (AH)

Australian Industrial Relations Commission

Australian Industry Development Corporation

Australian Institute of Family Studies

Australian Institute of Health and Welfare

Australian Postal Corporation (APC Australia Post)

Australian Public Service Commission

Australian Securities and Investments Commission (ASIC)

Australian Sports Commission (ASC)
Australian Sports Foundation Ltd

Australian Trade Commission (Austrade) (AUSTRADE)

Australian Wine and Brandy Corporation (AWBC)

Bureau of Rural Sciences (BRS)

Bureau of Transport and Regional Economics.

Centre for Environment and Life Sciences

Canberra Business Centre

Coal Mining Industry (Long Service Leave Funding) Corporation Comcare (COMCARE)

Commonwealth Scientific and Industrial Research Organisation (CSIRO)
Cotton Research and Development Corporation (CRDC)

Dairy Adjustment Authority

Department of Agriculture, Fisheries and Forestry (DAFF)

Department of Education, Employment and Workplace Relations (DEST)

Department of Employment and Workplace Relations (DEWR)

Department of Families, Housing, Community Services and Indigenous Affairs

Department of Health and Ageing
Department of Human Services (DHS MHS)

Department of the Environment, Water, Heritage and the Arts (DEW)

Department of Transport and Regional Services (DOTARS)

Department of Transport and Regional

Energy Technology

Equal Opportunity for Women in the Workplace Agency (EOWA)

Export Finance and Insurance

Export Wheat Commission (EWC)

Film Australia Limited (FAL) (

Film Finance Corporation Australia

Food Science Australia

Food Standards Australia New Zealand (FSANZ)

Forest and Wood Products Australia Limited (FWPRDC FWPAL)

Geoscience Australia

Grains Research and Development Corporation (GRDC)

Grape and Wine Research and Development Corporation (GWRDC)

Health Services Australia

ICT Centre (Information and Communication Technologies)

Industrial Relations Court of Australia

Land and Water

Land and Water Australia (Land & Water Australia)

Livestock Industries

Marine and Atmospheric Research

Materials Science and Engineering

Mathematical and Information Sciences

Meat and Livestock Australia (MLA)

Medibank Private Ltd 1

Medicare Australia

Molecular and Health Technologies

Murray-Darling Basin Commission

Canberra Business Centre ACT 2610

National Collaborative Research Infrastructure Strategy (NCRIS)

National Competition Council (NCC)
National Gallery of Australia (NGA)

National Health and Medical Research Council (NHMRC)

National Land and Water Resources Audit

National Transport Commission

National Water Commission

Office of Best Practice Regulation

Office of Health Protection

Office of the Australian Building and Construction Commissioner (ABCC)
Office of the Productivity Commission
Office of the Renewable Energy Regulator

Petroleum Resources

Pharmaceutical Benefits Remuneration Tribunal (PBRT) (

Plant Industry

Private Health Insurance Ombudsman

Productivity Commission

Professional Services Review

Canberra Post Business Centre,

Questacon—The National Science and Technology Centre (NSTC)

Remuneration Tribunal

Reserve Bank of Australia (RBA)

Rural Industries Research and Development Corporation (RIRDC)

Special Broadcasting Service Corporation (SBS) (SBS)

Sugar Research and Development Corporation (SRDC)

Sustainable Ecosystems

Tasmanian Freight Equalisation Scheme Review Authority (TFESRA)

Textile and Fibre Technology

Therapeutic Goods Administration

Transport Certification Australia Ltd

Workplace Authority )”

To force all these people out onto the workforce without redundancy and without the prospect of unemployment benefits (lest they forego a vastly higher tax exemption) would force them to get work quickly. Under fully free-enterprise conditions this would lead them to accept low earnings and depress the nominal earnings of those already working in proper jobs BUT REAL EARNINGS WOULD RISE.

REAL EARNINGS WOULD RISE since under free enterprise conditions consumer prices would fall faster than nominal earnings…. but but but…..

TO THE EXTENT THAT THIS IS NOT TRUE…. the difference would be made up in terms of an improving trade balance throwing us into surplus.

I know of no situation where this is not true. Even our greater viability leading to a foreign investment boom would have resultant higher wages in comparison to consumer goods.

And we could turn this all around on a dime as people say.

Now there are plenty of bureaucracies more to slash where those came from. But on my first run through a judged a lot of the others to be needing further investigation, or to be of the sort that we need a lot of the good stuff resultant from destroying the other parasitical institutions, and making policy more generally rational, before we would be in the position to phase out these other outfits without causing real pain. There was aboriginal health and this sort of thing. Various fisheries outfits, the functions of which need to be brought under some holistic and rational management. And I didn’t perceive that we could just clear their desks right away without real human hurt.

But to keep the bureaucracies open that we can close quickly IS CAUSING and will further cause much human hurt. And if it means we cannot defend ourselves against influences pushing against our liberty then we will lose everything and for no good reason.

And yet it remains the case that we can moon-launch out of recession and trade deficit right away. We can turn everything around ON THE NICKEL in fact.

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Responses

  1. Thanks to Adrien “cable-guy” who had his own motives for bringing attention to my list of kindness and good deeds. Any worthy sermon can do with many retellings. Certainly we have not heard the last of the sermon on the mount. Nor would revivals of my old stuff do damage by going over them, and over them , and over them again.

  2. “Is Bird smoking hash? So he mass sacks government workers. I would assume he’s thinking they get jobs in the private sector, so why exactly would their imported goods component of their purchases change?

    And since when is buying imported goods a bad thing?”

    Now I didn’t say that did I. But what we can be sure of is that to the extent that real wages didn’t increase the trade deficit would be reduced. That is to say under reasonably sensible monetary policy.

  3. “Mass sackings lead to trade surpluses?

    It is both amusing and vomit inducing that Bird claims superior mastery of the deconomics discipline than libertarians (e.g Soon, Humphreys or I), lefties (e.g Quiggin)or catallaxians in general.

    Birdnomics 101

    “If you sack Government employees, the demand for foreign goods falls”

    ???”

    The problem is that I’m right and you are wrong. And I understand the situation and you and Quiggin don’t.

    The extra people, virtually forced to take any work they can quickly, would lead, under pretty tight money, to the cost of living falling faster than nominal earnings. Hence real earnings would increase

    TO THE EXTENT THAT THIS WAS NOT THE CASE…. the difference would spill over into an enhanced trade surplus position.

  4. Any of you can try to invent a scenario where this was NOT the case.

    You will either be shown to be playing silly-buggers, or you will be wrong.

  5. Accumulating a 300billion dollar debt to our greatest strategic THREAT isn’t the latest fashion and will do us no good. And in fact from a certain perspective, the reality is, that we are simply borrowing, to keep the above list of investments in taxeater ego….. these investments in taxeater ego GOING.

    Not to help the old. Not to help the near-old get work. Not to help the younger winos at the mathew talbot become self-sufficient. Not to do any of the good stuff…..

    ….We are simply borrowing to keep old investments in taxeater ego going.

  6. BEHIND THE TIMES. EVENTS MOVING TOO FAST FOR HIM.

  7. WHICH BRILLIANT IDEA ARE YOU ENQUIRING ABOUT SPECIFICALLY.

  8. The mass-sackings as described above.

  9. You’ve just got to keep educating people. Education education education. Then when an emergency comes along, if you and others have done their work, policy will lurch towards doing the right thing.

    In the depression and upon the rise of Paulson policy lurched towards dysfunction. With the rise of Volker and Reagan policy lurched in the right direction. Not good enough but in the right direction.

    So nothing will happen anytime soon. We put the hard yards in all the time and see how things pan out during the next crisis.

    When the Americans start having hyper-inflation and if we can show that this mass-sackings will lead to a falling cost of living well conditions might favour a lurch towards better policy.

    We have just had a defense-policy lurch in the right direction. I could not have imagined that a year ago. Least of all coming under Kevin’s watch. So all is not lost. The ground may have moved with the China businesswoman scandal. Our defense minister has well and truly wiped the egg from his face.

    So we have to stay optimistic and its time for education and perhaps accumulating weapons now. Not using them or despairing.

  10. YES GROUNDED IN REALITY. WE’VE SEEN SHIFTS IN THE GROUND BEFORE. AND RECENTLY TOO.

  11. “Why would the unimproved value diminish? If all other taxation costs from less efficient taxes were removed (i.e less deadweight loss, more production) was to occur, why would the site value of land diminish?”

    For one thing the prices would fall until the yields were commercial. Rental housing yields recently were as low as 2% in a lot of places. They would adjust to at least 7% and perhaps more like 12%. The income you could earn off the property would increase with the reduced other taxes its true. But it wouldn’t be a one to one thing. Land prices are now way to high. They reflect lands status as store-of-wealth. A status that ought to be with gold, silver, platinum, copper. Ie the monetary metals. But its with land instead.

    So the projections are way too optimistic. And its the thief-economists handicap of the revenue-neutrality. An appalling concept that ought not be put forward even if you could pull it off with a bit of luck. Revenue neutrality is thieving neutrality is no good. And especially in the context of throwing a tax on the last bastion of solid property-rights.

    I can see arguments for tax substitution towards land value but it ought not be considered in the context of revenue-neutrality. Even just for ethical reasons.

  12. “The Australian government’s carbon pollution strategy rests on three pillars. First, to reduce Australia’s own carbon pollution. This makes no assumption about global warming – it may well be a policy objective irrespective of any other consideration. Second, to adapt to unavoidable climate change. This assumes that global warming is occurring and despite any policy intervention some warming is unavoidable.”

    Totally fucking bizzare. And Sinclair going along with it all.

    Just look at the opening:

    “The Australian government’s carbon pollution strategy rests on three pillars. First, to reduce Australia’s own carbon pollution. This makes no assumption about global warming – it may well be a policy objective irrespective of any other consideration.”

    What pantsless frantic bipedal rabbit has Sinclair been chasing, and down what holes? Is there nothing that this fellow will not tag along with?

  13. Mr Bird

    I think you should turn up to this and ask a few hard questions

    http://scienceblogs.com/deltoid/2009/05/sydney_writers_festival_2009_s.php

  14. Mr Bird
    don’t you find it strange that those nasty foreigners in catallaxy constantly mock you and yet read your words religiously.

    As for Mr Wombat and his obsession with the wise Mr Bird, let me disappoint you, sir. Mr Bird is straight as an arrow and does not indulge in the love that dare not speak its name.

  15. Yeah it is a bit strange at that. Check the thief-economists Sinclair is quoting:

    “Theory and simulations suggest a tax dominates an ETS.
    W.A. Pizer Journal of Public Economics 85 (2002) 409 –434

    The resulting welfare analysis indicates that taxes are much more efficient than permits for controlling GHG emissions – by a factor of five to one ($337 billion versus $69 billion in net benefits). This derives from the relatively flat marginal benefit curve associated with emission reductions.”

    Dummies so far off into fantasy-land they’ve stooged themselves that emissions-reductions lead to a welfare gain. The total opposite of the truth.

  16. “Adrien – I said raise taxes, but not to increase spending. It is to cover the loss of $210 billion in govt revenue. i.e. to maintain services without going into deficit we have a temporary increase in taxes. Now that is us paying for our sins, and while recovery would take a little longer, wouldn’t the lessons learned be worth it?”

    I think mass-sackings is what Pete is trying to communicate. And mass-sackings are there own reward. You bet it would be worth it.

  17. (((Sinclair Davidson wrote:

    >Unfortunately, for you I was born and lived in Johannesburg for many years. The land tax does not work well there at all.

    Well, not any more, because they changed to regular property taxation after apartheid. But while they used LVT, it worked well: despite its lack of natural endowments after the gold ore played out a century ago, Joburg was the business and financial center of southern Africa, and had the fastest urban site turnover in the world — 20-some years.

    >It was the centre of the tax revolts in the 70s and 80s, and for all I know it still is.

    Gee, the center of the white landowning elite’s resistance to justice? I wonder why that might have been?

    >Claiming that I am a liar is not proving I am a liar – where is your evidence?

    See above. Outrageously, you even lied that I had threatened you with violence and even death — always, of course, to people to whom I could not expose you as a liar.

    >Do you have evidence? If so, lets see it. You have a whole to yourself, as I promised … Can you deliver? We’re all waiting.

    I have already delivered, as you and all others who have read this thread know.))))

    Roy does make a powerful argument you know. He does have a point.

  18. And Cambria doesn’t have a point you know:

    “Roy:

    You’re Canadian, right? Canada the highway to the Tundra. Dude, why are you so heated up about land taz. Chill out (no pun intended of course) and enjoy your 2 weeks of summer.”

    Listen bootnigger. The subject is PUBLIC POLICY. You got that dummy?

  19. “A starting point would be to elliminate all stamp duties on land transfers and for state governments to make up the lost revenue by getting a fixed slice of local government rates.”

    Good general point from Terje. But look how Terje falls for the curse of “revenue-neutrality” ie thieving-neutrality… ie neutrality to wickedness.

    This would be so much less painful, and would make positive economic gains immediately, if the money they clawed back, effectively on land tax under Terje’s scheme, were but a fraction of the stamp duties foregone. And if the difference were made up though whole departments closing down and mass-sackings.

    Revenue-neutrality is criminally immoral. Mass-sackings are their own reward. Terje has not got clean hands on these matters. Since he often backs cuts to tax rates on the basis that they will increase revenue to the government. As if the bludgers aren’t getting enough loot as it is.

  20. “If company tax is worse than personal income tax then we ought to scrap company tax as it currently applies to profits and replace it with a dividends withholding tax.”

    What is a dividends with-holding tax? Thats what I need to know before I can pronounce a judgment on Terje’s idea.

  21. “In the argument I don’t question any particular arguments, I accept the IPCC number on face value.”

    WHY?

    This appears to be a common intellectual fault with Sinclair, Humphreys, and everyone else too. To think they can do meaningful economic analysis on the basis of science lies?

    Where is this idiocy coming from? Humphreys seems to swear by this intellectual handicap.

  22. “This question involves answering four sub-questions:
    Is global warming occurring? (Scientific question)
    Is anthropogenic global warming occurring? (scientific question)
    Can we fix it? (Technological question)
    Should we fix it? (Ethical and economic question)
    It is important to note that despite all the debate and controversy that we run out of science by the second question.”

    What is the point of that observation? Is the point that the science is hard? No it isn’t. Is the point that science is harder than economics? If so why are so many people so crap at economics.

    We run out of science questions after two questions. SO WHAT? Why not fucking answer the fucking science questions you fuckwit. The answers are important, since if you cannot get them right you are not the person capable of getting the rest of the analysis right. The science is the easy part. And the list of questions you made does not shed light on the problem.

    How about asking which is better. A warmer world, a new glacial period or a new “little-ice-age”. We know the answer to that don’t we? Or don’t we?

    How about asking which is better. Lower or higher CO2 levels? We know the answer to that don’t we?

    Stop acting like a fucking idiot will ya. Whats wrong with you Sinclair. Stand up to these wankers. Stop being a fucking pussy and failed analyst.

  23. Green Hell

    http://au.truveo.com/Heritage-Foundation-Event-on-Environmental/id/581914004

  24. “Is global warming occurring? (Scientific question)”

    Well is it? Or is the question just a little bit too hard for an economist to answer?

    Fucking hell. You’d think some of you people had never even met a leftist.

  25. ““One significant question that always arises is whether shifting public revenue collection from taxation to site or resource rents would generate sufficient income for public expenditure. This question was analysed in detail in an article published in the April 2003 edition of Australian Tax Forum by Terry Dwyer (Visiting Fellow to the Asia Pacific School of Economics and Management, Australian National University), under the title “The Taxable Capacity of Australian Land and Resources”. Dwyer’s paper – available as a PDF file – comes to the conclusion that:

    The “bottom line” reinforces the overall conclusion … that land-based revenues are indeed sufficient to allow the total abolition of company and personal income tax…”

    No thoughts to reducing parasitism. Revenue neutrality. A new dogma? Or is it just that those in the fishbowl cannot see that they are trapped in it?

    I get the feeling these taxeaters cannot comprehend the idea that new tax proposals ought not be revenue-neutral. They cannot imagine such a prospect. But in fact its the other way around. Since any proposal attempting to maintain the current level of thieving is doomed and ought not be under any consideration at all.

  26. Mr Bird

    The status quo suits these parasites just fine. Would Mr Davidson have a job if you were Prime Minister? Ask yourself that.

    Are you planning on crashing Mr Lambert’s party?

  27. No I suppose he wouldn’t.

    No I don’t think I’d be able to find the time for the anti-science defamation orgy conducted by intellectual midgets. If it turns out that its a free gig I’d think about making a decision to go at the last minute. Too busy really.

  28. “I was a Trotskyist as I have already explained so don’t waste your breath. You can’t say anything about Stalinism that wasn’t said far more profoundly, forcefully and accurately from circa 1924-25 by Russian Marxists.

    And what THR said.

    In fact there is an argument that high order creativity in the arts is most strongly linked to absolutist regimes.”

    You beat everyone up and steal from them and you wait around for the creative outpourings. Now where are these nutters getting this from and why aren’t we getting the thick and fast examples of this?

    These people clearly are full of shit. Where is the great creative outpourings from Zimbabwe? Lets have some examples so we can see what these people are talking about.

  29. Phil The Greek proudly professing his great regard for a war criminal and bloodsoaked reptile.

    These people are just embarrassing. But lets have that lecture in the history of creativity?

  30. “You can’t say anything about Stalinism that wasn’t said far more profoundly, forcefully and accurately from circa 1924-25 by Russian Marxists.”

    Barking mad lunacy and totally irrelevant at the same time. Russians from that time couldn’t speak openly about Stalin. This guys a loony toons. And what is this most pretentious of fob-offs relevant too?

    Some Russians criticised Stalin. So my criticisms of him are unworthy. Lacking profundity. People must be speechless at this stupid cunt. They are too stupefied by this fellow to take a swipe at him.

  31. “Good question, and good answer. We will probably never know and will argue and debate it for years, even decades. That, however, makes some of the comments in Ken Henry’s speech, yesterday, problematic.”

    Why not just learn the fucking material Sinclair you macromancer. Good lord you people are stupid. Here you are caving in 100% to the Keynesian menace. Basically saying that there is no such thing as economic science. You are a dummy Sinclair. You are aligned against all these idiots and you always get beaten or show yourself up to be a hardcore Keynesian after protesting otherwise.


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