Saturday, February 14, 2015

I am unimpressed by public debt scare mongering

"If we don't drastically cut public spending we will all end up like Greece or Detroit".
Conservatives in Australia are often claiming this.

Yesterday, The Daily Telegraph, one of Rupert Murdoch's mouthpieces, ran a front page story, about a recent "report" from the accounting firm Price Waterhouse Coopers, claiming Australia is heading for a one trillion $ debt.

John Quiggin has an excellent blog post, critiquing this.
The first criticism is that this "report" is not even available to the public. If you are going to make such grandiose claims, and if a newspaper is going to report them, you need to make the document available so others can see the basis for the claim.

But, my main concerns are twofold.
First, Australia has one of the lowest debt to GDP ratios in the world. It is not even close to Germany or the USA, let alone Greece.

Second, I find highlighting these debt concerns by conservatives is inconsistent, insincere and hollow. Suppose there is an an impending crisis. Then we need to solve it. That means we need to cut all spending, including defence, middle class "welfare", tax breaks to business, dubious anti-refugee schemes [almost $1 million per person], politicians pensions, ....
and we need to increase revenue [i.e. increase taxes and cut tax avoidance].
Yet, I don't see that passion or concrete proposals in that regard.

If you look at the last Federal Government budget, there were proposals to significantly cut spending on education and health care, but proposals to significantly increase spending on other areas such as defence, medical research, paid parental leave, infrastructure projects favourable to large multinational corporations ....

Highlighting debt is just scare-mongering to achieve a different political and ideological agenda.

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