Politics Super Thread - keep it all in here

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Papacito said:
A pretty good explanation around how the federal government have bungled monetary policy and how the analogy around paying off debt etc is completely false:

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Can you explain this to me. So the RBA just cancels the bonds and therefore we don't have any debt ?

If this is true why do we have such a massive debt ?
 
formerguest said:
Sorry to read such of your father and his side of the family, though you seem to have managed to emerge from that with strength.
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G'day @formerguest ...Thanks 🙂 for your Very Kind thoughts.

My father was a gutless piece of crap who didnt have the inner strength to stick around when things got a bit tough, walking out on my Mother and my 2 elder brothers soon after I was born 75 years ago.
He had a good job that payed well, but on many occasions just happened to 'forget' to pay his maintenance leaving us to basically go hungry and just forgot we ever existed while he went on to have a very cosy life.
The kindness of my Mothers relatives got us thru.
I wont go into any further details, but life has had it's challenges from not having a true caring 'father figure' at home.
I try very hard to be positive and generally find it easier [and seem to get into less trouble] 🙁 in expressing my feelings in writing rather than actually speaking about my feelings.
Thanks to You 👍for giving me the opportunity to do just that.
Enjoy the rest of the day FG.
 
www.rba.gov.au

How the Reserve Bank Implements Monetary Policy | Explainer | Education

This series provides short, concise explanations for various economics topics.
www.rba.gov.au www.rba.gov.au

I think this explains monetary policy and in particular the bond issuing via repurchase agreements (repos).


A repo is a transaction with two parts. In the first part the Reserve Bank could lend ES balances to a bank and receive a bond in exchange. This increases the supply of ES balances available to banks. In the pre-arranged second part, the transaction is reversed. The Reserve Bank returns the bond and receives back the ES balances. As a result, the supply of ES balances decreases.
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It doesn't sound like that guy in that video understands the issue.

It's a good criticism of Frydenburg trying to get a budget surplus when he probably shouldn't be doing that but it's not a good explanation of how you don't have to pay back the debt.
 
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Earl said:
www.rba.gov.au

How the Reserve Bank Implements Monetary Policy | Explainer | Education

This series provides short, concise explanations for various economics topics.
www.rba.gov.au www.rba.gov.au

I think this explains monetary policy and in particular the bond issuing via repurchase agreements (repos).




It doesn't sound like that guy in video understands the issue.

It's a good criticism of Frydenburg trying to get a budget surplus when he probably shouldn't be doing that but it's not a good explanation of how you don't have to pay back the debt.
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Josh is in a lot of trouble in his electorate. 53 to 47 against right now.
 
Earl said:
It doesn't sound like that guy in video understands the issue.
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Just quoting myself but that video is really really wrong.

www.abc.net.au

The RBA is printing money and that has raised a lot of questions

Yes, Australia's central bank is now plugging in extra digits on its computer trading screens to artificially pump-up how much cash it has. Here are some answers to your most common questions.
www.abc.net.au www.abc.net.au

I'll try and explain it. If I get it wrong please inform me accurately via facts.

Basically the RBA during COVID decided to pump money into the economy. They did this via purchasing bonds but then cancelling those bonds so they didn't have to be repaid. It sort of makes sense in this context because it increases the money supply. If you have low inflation you can get away with this because you aren't worried about inflation. They probably also couldn't move on interest rates because they were so low.

The problem is now we are worried about inflation and the RBA won't continue to increase the money supply.

The government budget is a completely different kettle of fish. The government has had a massive deficit (maybe it was required) and now we have historically extremely large debt.

That debt has to be repaid. There is an argument that debt is different for a government compared to a household because a household has a lifecycle where you want to retire at some point whereas the government doesn't.

Even government debt though needs to be serviced. When you have a large debt more resources (which means tax dollars or less spending on other stuff) have to go to service that debt.

There is no free lunch.
 
Earl said:
It's going to hurt right. The money supply is being reduced.

I get that people will be hurt. I get it's going to suck. There is no alternative. You cannot continually increase money supply.
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correct, because you end that you have to satisfy everybody,
the old "you paid him, why not me?" - in the other words a corrupt government that picks up "winners"!
 
InBenjiWeTrust said:
correct, because you end that you have to satisfy everybody,
the old "you paid him, why not me?" - in the other words a corrupt government that picks up "winners"!
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Exactly. This is also why I much prefer blanket payments or blanket decisions rather than the government trying to pick winners.
 
Earl said:
I reckon he is one of the better libs. It's interesting how keen he was on getting the budget to surplus. I think he wanted to state he was a good economic manager.
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Except between 2013 and just BEFORE the pandemic became a thing - our debt basically doubled?

No extrinsic factors: no headwinds, no war, no pandemic, no GFC? What was Josh's excuse?
 
Mac said:
Except between 2013 and just BEFORE the pandemic became a thing - our debt basically doubled?

No extrinsic factors: no headwinds, no war, no pandemic, no GFC? What was Josh's excuse?
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I'm not voting for them. I'm pissed about the debt. It's one of the main reasons I'm voting Labor.
 
Mac said:
Which seat Earl? No decent independent 🙂
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I thought I was in a Liberal seat but apparently I'm in a key seat. I'm in Reid. I actually feel a little bad because the local member didn't vote for Morrison's religious discrimination laws.

The Labor candidate knocked on my door to get me to vote for her and I told her to go elsewhere because I was voting for her.
 
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