Sandpit

A new sandpit for long side discussions, idees fixes and so on. Unless directly responding to the OP, all discussions of nuclear power, MMT and conspiracy theories should be directed to sandpits (or, if none is open, message boards).

78 thoughts on “Sandpit

  1. @Megan

    1. The decision to affiliate to an international organisation whose members are political parties is an expression of the official opinion of the party affiliating that it is a similar kind of party to other parties also affiliated to that organisation.

    2. The government has the power to prevent a parliamentary vote on a proposal to change the law. Warren Entsch has just introduced a proposal to change the marriage law, an action which appears to be along the same general lines as what you were recommending. The government is not going to permit the proposal to come to a vote. Repeated insistence that there is some way it could be forced to a vote when the government refuses permission, without any explanation of how, is hollow.

    3. In 2007 the voters of Dawson had four alternatives to De-Anne Kelly (Nationals) and James Bidgood (ALP). They did not elect any of those four alternatives. In 2010 the voters of Dawson had three alternatives to George Christensen (LNP) and Mike Brunker (ALP). They did not elect any of those three alternatives. In 2013 the voters of Dawson had five alternatives to George Christensen (LNP) and Bronwyn Taha (ALP). They did not elect any of those alternatives.

    In 2013 five out of the 150 federal electoral divisions elected candidates who were alternatives to both the Coalition and the ALP. The other 145 did not, even though they (or at least most of them) did have alternative candidates to vote for. To say that voters will reject both the Coalition parties and the ALP whenever they are given alternatives is not correct; sometimes they do, but more often they don’t.

  2. Megan :
    And today in the Senate the ALP/LNP duopoly will vote together to legalise the killing of refugees in our concentration camps (seriously, that is what can be done if this passes: Migration Amendment (Maintaining the Good Order of Immigration Detention Facilities) Bill 2015).
    “But – gays”, is not a valid reason to ignore this.

    Nobody has suggested that it is, so your snide gibe reflects discredit on nobody but yourself.

  3. Ikonoclast wrote to EG in reply to a post on the Big Tobacco thread. (I reply after each paragraph except the first sentence.)

    “I agree on all of that.

    Debt finance is one important issue. I hope I can use this occasion to ask a question. Various schools of economics argue about money printing and macroeconomic stimulus (budget deficits) from various angles. It seems to me (in my naivety) that there are currently two important ways to create money. One is by government deficit financing (crudely “printing money”) and the other is by loan making. Stop me if any of my assumptions are wrong and/or answer my final questions if possible.”

    Reply:

    Yes, in each case ‘money’ is created by means of issuing financial securities.

    “Fiat money can be created by fiat (unfinanced deficits) and destroyed by fiat (unspent surpluses). Debt money is created by loans. While the debt money is balanced by the debt on the loan book, there is no net increase in assets in the economy. However, there is an increase in circulating money supply. Debt money is not extinguished until the loan is repaid. While the loan or part of it is outstanding the debt money circulates. In the economy is expanding and loans are increasing then loan making equals net money creation.”

    Reply:

    I don’t consider your paragraph meaningful. (The MMT story is not watertight.) If I were you I would forget about this one.

    “How does it make sense to have government budget austerity combined with rampant loan making in the finance sector? In a growing economy with a growing loan book, does this not equate to money printing which is simply done by the private sector? If one needs to control excess budget deficits does one not also need to properly control loan making by the private sector? Are our financial regulations and controls adequate in this arena?”

    Reply:

    The term ‘austerity’ is not helpful, IMO, because it is too much entangled with macroeconomic ideologies.

    To illustrate, to some people the term ‘austerity’ means no more than something to the effect of ‘we have to tighten our belts a bit’, which makes sense to me irrespective of the identity of the agent who makes such a statement. To others it means all government debt is bad and all economic problems will be solved if the government produces a surplus, which is nonsense in my mind. To the extent that you have the latter in mind, I agree it does not make sense to have ‘austerity’ and unconstrained private debt growth.

    After the May 2014 Federal budget in Australia, I read a lot of comments by readers of the smh. It struck me that the public in aggregate understands very well what is prudent government financial management. There was no objection to have a reduction of the government deficit as a policy goal. The rhetoric of there being a ‘crisis’ was rejected, as was the objective of ‘needing’ a surplus. Who is supposed to pay for the reduction of the deficit was at issue. There was strong objection to ‘austerity’ being applied to those who already live an austere life. This objection makes sense regarding the importance of the wealth distribution in theoretical models of economies where individuals’ preferences and resources (natural) are the only primitives (everything else can be changed).

    The chair of the Financial System Inquiry, David Murray, ex CEO of the CBA has reached the conclusion that disclosure is not enough to ensure stability (think of it as a system working more or less satisfactorily). This is important because during the preceding 20 years or so the Finance-Accounting people spread the belief that all that is required is ‘disclosure’. Disclosure does not achieve coordination of price expectations, including risk preferences. To get an insight into why, one could consult Roy Radner’s model of sequence economies with commodity and financial securities markets. (I’ve written about this many times in the past.)

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