Australian Politics Forum - Calling For A Doubling Of Medicare Levy

crocodile

Gold Member

Offline

Australian Politics

Posts: 6683
Gender: male

Re: Calling For A Doubling Of Medicare Levy
Reply #60 - Nov 4^th, 2015 at 8:23am

mariacostel wrote on Nov 4^th, 2015 at 6:24am:

The point is not where they are denominated but where the money comes from and it largely comes from OVERSEAS which was my point. You are very theoretical. And you don't know of any economist suggesting a return to surplus being a good thing?? Maybe in a university perhaps where I think your experience is largely limited to.

The resident status of the bond holder is irrelevant. We've had substantial foreign investment in this nation ever since the first fleet arrived. If foreigners want to invest their hard earned on us they should be welcomed. I never said that a surplus was a bad thing only that right here and now nobody is advocating for one. Surpluses in general are not bad. It is the long run of year on year ones that are problematic. Eventually the private sector runs out of savings. I can't see why you think this is too theoretical. It seems rather obvious.

By the way, private local citizens and entities are also holders of other nations financial instruments. Balances out in the end.

Back to top

Very funny Scotty, now beam down my clothes.

IP Logged

crocodile

Gold Member

Offline

Australian Politics

Posts: 6683
Gender: male

Re: Calling For A Doubling Of Medicare Levy
Reply #61 - Nov 4^th, 2015 at 8:54am

Kytro wrote on Nov 4^th, 2015 at 6:13am:

crocodile wrote on Nov 3^rd, 2015 at 11:50am:

Kytro wrote on Nov 3^rd, 2015 at 10:00am:

crocodile wrote on Nov 3^rd, 2015 at 8:20am:

Are you suggesting that a surplus on the government side of the ledger does not show as a deficit on the private side. If so then I suggest your own real-life experiences are misunderstood.

I'm assuming you mean if tax was lower the people would have kept more income. Clearly this is by definition.

In a nutshell, yes. It's amazing how this rather simple accounting measure is not understood more widely. The effects on savings, private debt and investment is important. If you are really interested then google "sectoral balances". There you will find that long runs of government surpluses effectively decrease private sector savings and add to private debt. There is little point in looking only at the government debt levels without consideration to the level of private debt.

This is a medicare thread so its probably the wrong thread to carry on. Suffice to say that the 10 years of surplus simply moved the debt from the public sector to the private sector. Great for electioneering but the nation is actually still carrying the debt but privately. The reality is that small deficits should be the ongoing default position.

It can increase private debt, but it doesn't have to do so, nor is doing so always a bad thing. For instance if the government wants to enact certain policy, it might be useful.

If you include a decline in private sector saving within private debt then it is unfortunately the case. The only escape would be via a positive number on the foreign account but we don't generally have one of those as we are net importers. Therefore private debt rises on a dollar for dollar basis.

If you have a look at some sectoral balances from around the world and you will find that private sector balances are precisely equal to the government balance + CAD

Eurozone

USA

Canada

Japan

Aussie

UK

Back to top

Very funny Scotty, now beam down my clothes.

IP Logged

mariacostel

Gold Member

Offline

Australian Politics

Posts: 7344
Sydney
Gender: female

Re: Calling For A Doubling Of Medicare Levy
Reply #62 - Nov 4^th, 2015 at 12:04pm

crocodile wrote on Nov 4^th, 2015 at 8:23am:

mariacostel wrote on Nov 4^th, 2015 at 6:24am:

The point is not where they are denominated but where the money comes from and it largely comes from OVERSEAS which was my point. You are very theoretical. And you don't know of any economist suggesting a return to surplus being a good thing?? Maybe in a university perhaps where I think your experience is largely limited to.

The resident status of the bond holder is irrelevant. We've had substantial foreign investment in this nation ever since the first fleet arrived. If foreigners want to invest their hard earned on us they should be welcomed. I never said that a surplus was a bad thing only that right here and now nobody is advocating for one. Surpluses in general are not bad. It is the long run of year on year ones that are problematic. Eventually the private sector runs out of savings. I can't see why you think this is too theoretical. It seems rather obvious.

By the way, private local citizens and entities are also holders of other nations financial instruments. Balances out in the end.

If you are talking about surpluses coming from private sector and vice versa, the origin of where borrowed money comes from to fund deficits is a CRUCIAL issue.

Back to top

IP Logged

Jovial Monk Gold Member Offline Dogs not cats! Posts: 49056 Gender:	Re: Calling For A Doubling Of Medicare Levy Reply #63 - Nov 4^th, 2015 at 1:09pm Not for nations with their own sovereign currency. Surpluses, govt taxing more than it hands out, take money out the private sector. A surplus now is madness!
Back to top	Get the vaxx! 💉💉 If you don’t like abortions ignore them like you do school shootings. IP Logged

innocentbystander.

Gold Member

Offline

Australian Politics

Posts: 4723
Gender: male

Re: Calling For A Doubling Of Medicare Levy
Reply #64 - Nov 4^th, 2015 at 2:51pm

The biggest problem we face here in Australia is the Labor parties absolute refusal to introduce the Liberal party to the fairies at the bottom of the garden where all the free money comes from, we cannot move forward as a nation until this endless source of wealth is made available to whatever party is in power.

Back to top

IP Logged

crocodile

Gold Member

Offline

Australian Politics

Posts: 6683
Gender: male

Re: Calling For A Doubling Of Medicare Levy
Reply #65 - Nov 4^th, 2015 at 5:24pm

mariacostel wrote on Nov 4^th, 2015 at 12:04pm:

crocodile wrote on Nov 4^th, 2015 at 8:23am:

mariacostel wrote on Nov 4^th, 2015 at 6:24am:

The point is not where they are denominated but where the money comes from and it largely comes from OVERSEAS which was my point. You are very theoretical. And you don't know of any economist suggesting a return to surplus being a good thing?? Maybe in a university perhaps where I think your experience is largely limited to.

The resident status of the bond holder is irrelevant. We've had substantial foreign investment in this nation ever since the first fleet arrived. If foreigners want to invest their hard earned on us they should be welcomed. I never said that a surplus was a bad thing only that right here and now nobody is advocating for one. Surpluses in general are not bad. It is the long run of year on year ones that are problematic. Eventually the private sector runs out of savings. I can't see why you think this is too theoretical. It seems rather obvious.

By the way, private local citizens and entities are also holders of other nations financial instruments. Balances out in the end.

If you are talking about surpluses coming from private sector and vice versa, the origin of where borrowed money comes from to fund deficits is a CRUCIAL issue.

It's not crucial at all. It just adds to CAD. Australia's current account is almost never in surplus. If you look at the capital flows, both in and out, private and public I can't see why you are so bothered.

Back to top

Very funny Scotty, now beam down my clothes.

IP Logged

stunspore

Gold Member

Offline

Australian Politics

Posts: 5097
Gender: male

Re: Calling For A Doubling Of Medicare Levy
Reply #66 - Nov 4^th, 2015 at 5:42pm

innocentbystander. wrote on Nov 4^th, 2015 at 2:51pm:

The biggest problem we face here in Australia is the Labor parties absolute refusal to introduce the Liberal party to the fairies at the bottom of the garden where all the free money comes from, we cannot move forward as a nation until this endless source of wealth is made available to whatever party is in power.

Please do more research as to why a surplus every year is actually bad for the economy. It sucks money out of the economy. Think of it as water in a cycle. When water is removed, the cycle breaks. Sure deficits are bad, but sadly most libs and uninformed voters don't understand the purpose of budgetary surpluses/deficits in the economy as opposed to that in a household.

Here's a link to read: http://greyenlightenment.com/economic-myths-part-1-budget-surpluses-are-good/

Back to top

IP Logged

Bam

Gold Member

Offline

Australian Politics

Posts: 21905
Gender: male

Re: Calling For A Doubling Of Medicare Levy
Reply #67 - Nov 4^th, 2015 at 7:23pm

Balanced budgets over the long term are optimum. Sometimes it is in surplus, sometimes in deficit depending on need. If the economy is strong, a surplus is necessary to soak up excess demand; conversely, when the economy is weak a deficit is often necessary to stimulate demand.

The worst thing that one can do is impose austerity on an ailing economy. It only makes the economy worse.

Back to top

You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.

IP Logged