Oz Blog News Commentary

The myth that government debt is repaid by running public surpluses and other news and views

December 13, 2017 - 09:27 -- Admin

How much debt do we need? My answer: 70% of GDP - Roger Farmer's Economic Window

If government borrows money to pay for a new road or rail network, the new transportation infrastructure will generate benefits to future generations. It is only fair that those generations should help pay for the investments they enjoy and, for that reason, debt accrued to pay for social investment is widely recognized to be socially beneficial. The principle that allgovernment debt should be used to finance infrastructure investments is sometimes called the golden rule of public finance. It is a commonly held belief that government debt should only finance government investment; but it is a belief that does not survive more careful scrutiny.Governments are not like households. If a household borrows from a bank it will eventually need to repay the money it borrowed. If a government borrows money from the public, it may never repay that money. It is a myth that government debt is repaid by running public surpluses. In reality, the ratio of outstanding debt to GDP shrinks as the economy grows faster than the interest rate at which the government is borrowing.

Forecast: political storm over energy - Eureka Street

Summer is here, and so is the political spin about blackouts. This year, with a record November heatwave in Victoria and a press gallery hypersensitised to energy politics, the blame game started early — well before anything has actually gone wrong.

Gove: I'll make Brexit work for animals too - BBC

The government has published a new law that says it must treat animals as "sentient beings" when it makes laws. Environment Secretary Michael Gove promised to "make Brexit work not just for citizens but for the animals we love and cherish too". The draft law also increases the maximum sentence for serious animal cruelty to five years in jail.

The Institute of Public Affairs, finance and the contradiction between individualism and corporatism - Pearls and Irritations

Readers of Pearls and Irritations will be fully appreciative of the considerable influence exercised by the Institute of Public Affairs (IPA) on the commentariat and political decision-making through its representatives in various parliaments and its presence in the media. And given its discernible influence or occasional lack of it – witness James Paterson’s aborted attempt to neuter the outcome of the marriage equality survey – on shaping political opinion, we might ask whether it too will be required to open the books relating to its financial sources as part of an investigation of foreign influence on Australian lobby groups. If it is good enough for Get Up and various environmental groups to be targeted in this way, why not the so-called libertarian groups which are all really public relations fronts for the corporatization of government and the private sector.

Saudi Arabia Announces Opening Of Cinemas For First Time In 35 Years - NPR