Sunday, 14 April 2013

Know your Subject

Judy Sloan after being completely embarrassed by the Kouk on government debt has a go at examining the budget.

However the confusion is still evident.

She says
"no doubt, Swan will continue to drone on about how much revenue has been ‘written off’ since the GFC – complete tosh, by the way "
Please note the evidence she uses to support this claim.
Complete tosh? We have looked at this previously. In short if tax as a % of GDP are at levels last seen in Keating's time then the only person talking tosh is Ms Sloan.

We get a bit later this
"A revenue increase of over 7 per cent is actually very good, particularly given how low inflation is"
Again note the evidence to support this claim.


Let us make it easy for Ms Sloan. if nominal GDP is slowing and below trend ( because of a fall in the TOT and contractionary fiscal policy) then it is ludicrous to expect let alone support a proposal to have the budget balanced.


UPDATE
Ricardian Ambivalence examines this topic. Notice the HUGE difference in quality on the subject!