Kevin Rudd & Gough Whitlam. Doing the Deficit Two-Step.

http://www.abc.net.au/news/stories/2009/02/04/2481623.htm

It seems to happen with regular monotony - a Labor government gets elected, and we end up with Debt, Deficits, Unemployment and Big-Government.

No one disputes the need for governments to invest in infrastructure - especially in times of financial turmoil.

But Rudd and Swan are prooposing to put the country $100 billion in debt over 3 years. The sort of debt it took the Coalition a decade to pay off.

It's a matter of spending what you actually have rather than charging up a huge burden of foreign debt on the national credit card.

The major lesson of the financial crisis is that debt can be toxic. If you borrow too much when times are tough, you'll lose your shirt - and that is true for householders as much as governments.

Former Federal Treasurer Peter Costello slammed the competence of the Rudd Government on Lateline last night.

He pointed our the hypocricy of Julia Gillard praising the strength of Australia's financial framework at the Economic Forum in Davos at the same time that Rudd was talking it down and saying that "Capitalism needed to be saved from itself". As if there was one message that we needed to tell the world, but another message we needed to feed to the poor voters at home.

He underlined the poor quality of the $10 billion pre-christmas cash hand out, which did little more than boost the profits of Westfield, without creating any real jobs.

But most of all, he pointed out the stark contrast between the time when he was treasurer, and now, under our current incompetent, Wayne Swan. Under Costello we had budget surpluses in excess of 2% of GDP. Swan is giving us the opposite - budget deficits in excess of 2% of GDP.

As the old song goes... "Don't it always seem to go that you don't know what you've got till it's gone".

Swan Flies in Wrong Direction

http://www.abc.net.au/news/stories/2008/11/01/2407628.htm

Treasurer Wayne Swan is either misguided or disingenuous when he claims that his clumsy bailout of Aussie banks didn't cause a run on investment funds.

I admit, it's easy for me to sit on the sidelines and criticize with the benefit of hindsight. But consider this, most other western countries, while offering guarantees on bank deposits, have an upper limit. Australia's limit was pretty lame, so I think the treasurer decided to get hairy chested about it and instituded a guarantee without limit. And then in typical Labor style, decided to introduce a tax (which he calls a "levy") on larger deposits to help pay for the insurance.

Most people accept that this is what caused most investors to try and pull their money out of investment funds. Why not? When they could get a guarantee without limit from their local bank.

But what seems even more worrying is the change of tack that the treasurer has taken in order to address the credit crunch. He's decided to give people $1,000 before Christmas. I think the correct term for this is "Trickle Up Economics". It's sort of like the antithesis of extreme capitalism where benefits to the rich "Trickle Down" to the masses, like crumbs from the table. But in Swan's scenario we give money to the masses before Xmas to buy their plasma TV's and lotto tickets.

Maybe I should give him the benefit of the doubt, but this was the same pundit who before the election was bemoaning the lack of infrastructure investment. Who boasted at his first budget a $40 billion plan to invest surpluses in Nation building.

Now at the first sign of trouble, the infrastructure plans are put on the backburner so Mums and Dads can get a bit of extra pocket money before the end of the year.

Imagine how many more jobs would be created, how much demand would be created for our natural resources if, instead, he kept his word and kept his promise of nation building?

It doesn't provide instant gratification like the Plasma TV money, but it has longer term benefits for us all.