Judith Sloan has always been a sandwich short of a picnic when it comes to fiscal policy like all of them over at Catallaxy but today takes the cake.
Poor Judy has let the peroxide get into her brain again so let us help her.
Maastricht. Let us assume it means the fiscal consolidation that is occurring in Europe. That worked out well.
Reagan oops wrong again
Estonia wow it has a DEPRESSION i.e. a fall in GDP of over 10%. Unemployment is still at recessionary levels. Way to go
New Zealand. If the terms of trade rise and GDP rises strongly it isn't hard to consolidate!
And she misses the massive consolidation done by Wayne Swan. He cut NOMINALspending. The deficit fell from 2.9% of GDP to 1.2%. What happened. The economy got weaker and payments rose to 23.6%.
If fiscal consolidation helps the economy then Wayne Swan gave us a rolled gold version of it and we should have boomed. Funny about how she 'missed' this and what happened.
We didn't because Ross Gittins, Glen Stevens et al are right. You do fiscal consolidation when the economy is strong not weak. Something Keynes said back in 1936.
Yet we still have imbeciles asking for it without any evidence to support their case.
One last thing. Sloan can write this rot and get away with it at Catallaxy because it is an echo chamber for banal stupidity. She doesn't wander to any other blogs as she got smacked down badly at Club Troppo when she said Matt Cowgill was innumerate. Sadly it was she that couldn't understand the numbers! That must be the reason why she obviously doesn't attempt to read Budget papers. NBN not on the Balance sheet anyone!
I think Judith should read THIS