A couple of simple things to get rid of the deficit

 Our budget deficit is around 1% of GDP. (The US is over 5%!!)

Here are three policy action that could reduce that substantially but of course are politically difficult.

1. Get rid of the ridiculous subsidy to WA via the GST
2. impose a means test on all government programs
3. Take the NDIS back to its roots. Only those with physical disabilities get help.

Scott Morrison is responsible for the GST rot to WA. It is nothing short of a disgrace the richest State gets more money. Saul Eslake says this was the worst policy mistake of the 21st century. I agree. WA voters would not like it however

In some ways Albo has imitated John Howard. Howard brought in middle class welfare bigtime when the resources boom was taking off. Able has simply copied him without the boom. Our family should not have been subsidised in getting solar panels nor a battery.Taking away benefits always hurts the incumbent government.

We simply do not have the money to help everyone getting help via the NDIS. Only allowing those with physical disabilities would significantly reduce it cists, Again taking away benefits would entail political pain.

These are but three options but you can see the political problems involved. I am doubtful any party can do it and a revenue boost is our only hope.

Just what are Russia and China advising Iran

 Let's face it the US is stuck in its war against Iran.

Let us ignore for the moment most of the reasons for this but examine one important issue.

It is in Russia's interest for Iran to continue its battle with the USA. Hesgeth has no idea of drone warfare and thus the US is using very expensive missiles against drones. He would know what to do if he talked with Kiev!

China too would like this war to continue. With the US preoccupied with Iran and wasting ammunition and weapons there Taiwan looks very vulnerable.

Of course if the mid-terms goes badly for Trump then this is another bonus.

Thus do not expect lower petrol prices for some time.

A Blue wave is coming

 Time for me to put my gonads on the line.

I believe a blue wave is coming for a number of reasons.

Inflation is a large problem. the punters believed trump when he said he would cause a drop in prices. Instead prices rose. Initially from tariffs and then exacerbated by the war with Iran. This has also caused people to finally see Trump as the liar he is. He says prices are dropping and people know they are not.

The war in Iran is dreadfully unpopular principally because the reasons for the war were never enunciated and have led to a steep rise in petrol prices.

The increase in tariffs has lead to an increase in costs and local substitutes for imports are more expensive. It gets worse as a lot of capital equipment is hit by tariffs.

The Trumps have made a lot of money since Trump won the presidency. A lot of this has come about because of the Supreme courts decision on Presidential immunity. 

You also have a lot of billionaires involved directly or indirectly in this administration. This further highlights how distan Trump is from the ordinary voter.

Allied to this Trump is increasingly seen as out of touch. He is increasingly showing his age and his cognitive decline.

Voters also give Trump more power than they wanted originally and then change bigtime in the mid-terms to ensure there are some guardrails.This is exacerbated by Trump's blatant authoritarian instincts in his second term.

So there you have it. I would not be surprised if some states change which no-one expected.

A good time was had by all

 Last Friday was my 70th birthday ( so I am younger than john quiggin) and my wife decided we ( the family) should celebrate it at the Hunter Valley. we rented an airB&B at cessnock and it was great. In friday we had fantastic steaks from blayney and drunk it down with a 2008 toer shiraz and another wine I cannot remember from 2019.

I am thinking I really do not want to celebrate 80!

Briar ridge is the winery to visit if you go to the Hunter Valley

Around the Traps 18/9/2026 70th Birthday Edition

 It is time again for Around the Traps.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Peter Martin on early-access-to-super Thanks Nick
• James Button on the-way-we-word  Thanks Nick
• Carol Johnson on yes-its-the-economy-stupid-but-one-nation-is-outflanking-the-government-on-messaging-too
• Marian Sawer on the-coalition-wants-to-make-flag-burning-a-crime-its-a-revival-of-a-decades-old-battle
• Johanna Lim on data-centres-have-existed-for-decades-so-why-are-they-so-controversial-now
• Mark the Graph on seeing-australian-r-star-through-different-windows
• Thomas Corben and Esther Soulard on five-years-into-aukus-what-do-we-have-to-show-for-it-weve-measured-progress-on-three-key-metrics
• Michael Varden on unsustainable-or-manageable-we-dont-yet-know-how-data-centres-will-impact-australias-environment
• Ross Gittins on feeling-the-pinch-blame-the-pay-rise-you-didn-t-get
• Ly Tran on how-would-one-nations-immigration-plan-affect-the-labour-market-and-economy
• Josh Sunman on hansons-personal-attacks-and-offensive-comments-are-straight-out-of-the-populist-playbook-but-they-come-with-risks

OZ climate

• nationals-leader-asks-lnp-planning-minister-to-call-in-already-approved-wind-project-in-his-own-electorate 
  
• australias-most-powerful-battery-flexes-muscles-with-second-shock-absorber-test-and-biggest-every-charge
  
• six-steps-to-stop-the-data-centre-boom-from-sending-power-prices-through-the-roof
  
• the-financing-market-for-wind-and-solar-projects-is-nearly-dead-heres-how-to-turn-the-corner
  
• the-case-for-plug-in-solar-and-batteries-has-never-been-clearers-nd-renters-deserve-it
  
• Bill Hare on australia-must-double-down-to-meet-our-climate-targets-our-new-study-shows-how

Northern America

• institutional economics on a-users-guide-to-betting-against-scott-bessent
• Daniel Munoz on our-job-is-to-lie-cheat-and-steal-and-your-job-is-to-do-the-show Thanks Nick
• Dave Moulton on how-leftists-became-big-pharma-s-shock-troops Thanks Nick 
• Kruggers on henry-farrell-and-abe-newman-on-weaponized-interdependence, the-maga-plots-to-destroy-humanity, why-is-trump-still-boosting-ai, fear-strikes-out
• Andrew Prokop on ai-freakout-mainstream-openai-anthropic-humans
• noahpinion on get-the-middle-east-out-of-my-politics, the-anti-american-right
• angry bear on interactions-between-presidents-and-the-fed-what-happens 
• John Quiggin on the-us-is-not-a-serious-country 
• Anne Applebaum on maga-foreign-policy
• Dexter Filkins on jared-kushners-dollar-diplomacy
• Paul Rasmussen and Annette Kwan on who-checks-president-not-military
• Brad De Long on hyperscaler-debt-default-risk, hyperscaler-debt-default-risk-is-the-real-thing
• one first on what-we-learned-from-usps-v-california thanks Brad
• Ian Millhiser on supreme-court-trump-mail-ballots-usps-california 
• Richard Hasen on trump-supreme-court-2026-alito-despicable-dissent
• Tyler Cowen on callum-williams-on-cybersecurity-prices
• Menzie Chinn on cbo-on-iran-war-costs
• Stewart Prest on thanks-trump-why-canada-may-become-the-european-unions-first-ever-associate-member
• Caitlin Dewey on ed-sheeran-macklemore-israel-gaza-controversy 
• Tom Bartlett on measles-deaths-pennsylvania-outbreak-kennedy
• Fintan O'Toole on devils-in-america-roy-cohn-bird-goldmark
• Liz Dye on supreme-court-mail-voting-ruling
• home and away on 9/11-at-25

Europe

• Tim Harford on nudge-or-tax-at-last-some-data
• Tyler Cowen on uk-fact-of-the-day
• Deniz Torcu on how-germanys-far-right-afd-is-courting-the-voters-it-promises-to-deport
• Alexey Muraviev on why-strengthening-ties-with-the-global-south-was-a-top-priority-for-putins-recent-diplomacy-blitz
• Lisa Martin on putin-sweats-on-russia-s-parliamentary-vote-as-ukraine-invasion-drags-on
• mainly macro on racism-and-xenophobia-are-not-'legitimate-concerns'

Asia

• Shruti Pandalai on what-the-west-should-make-of-xi-s-return-to-delhi-for-the-brics
• Menzie Chinn on guest-contribution-do-traditional-models-or-the-dominant-currency-paradigm-explain-chinas-export-behavior 
• Adam Simpson on myanmar-s-junta-finds-a-second-patron-in-moscow
• Gabriela Bernal on seoul-s-defence-pivot-to-europe
• Jessica Genauer on the-houthis-have-further-tightened-their-grip-on-the-red-sea-heres-what-it-could-mean-for-the-world
• Jeet Heer on netanyahu-haaretz-report-october-7

Wonk

• Claire Collier on we-already-know-what-a-world-without-work-looks-like Thanks Nick
• Lydia Khalil on 9-11-s-shrinking-shadow
• Kruggers on trade-peace-and-war
• Andrew Cullen on big-ai-wants-to-slow-down-ai-research-is-it-a-safety-pause-or-a-strategic-retreat
• Aarti Betigeri on brics-grits-its-teeth-through-a-new-delhi-breakthrough
• Alex Tabarrok on ai-redistribution-and-the-size-of-the-pie
• Dov Waxman on what-is-zionism-the-different-meanings-of-a-contested-term
• Cassandra Steer on the-us-says-it-has-launched-space-control-weapons-it-plays-into-the-hands-of-its-enemies
• Chris Dillow on marx-on-ai

General

• Terez Rose on ten-odd-facts-handel-messiah Thanks Nick
• Olaf Meynecke on weeping-whales-why-one-humpback-whale-mother-stayed-beside-her-dead-newborn

Climate

• ocean acidification on long-term-monitoring-of-coral-reef-fish-populations-under-increasing-ocean-temperature-and-acidification-stress
• Soutik Biswas on the himalayas are melting faster and the indian economy is at risk
• Kathiana Luk et al on climate-change-is-putting-the-squeeze-on-the-worlds-grapegrowers-new-research
• 
  

Andrew Gelman ( mostly stats)

• did-2012-mark-the-discovery-of-the-final-laws-of-nature-a-discontinuity-in-human-intellectual-history-the-sharpest-that-has-occurred-since-the-beginning-of-modern-science-in-the-17th-century 
  
• whats-happening-with-the-models-of-the-atlantic-meridional-overturning-circulation
  
• this-is-modern-frequentist-statistics-using-fake-data-simulation-to-understand 
  
• protection-from-inappropriate-influence-is-a-hallmark-of-scientific-integrity-not-any-more
  
• survey-statistics-anova
  
• charting-the-agentic-garden-of-forking-paths
  
• its-satisfying-to-see-the-economics-profession-come-around-on-some-things-regression-discontinuity-analysis-and-so-called-risk-aversion
  
• Kaiser Fung on cosmetic-surgery

Dianne Coyle ( quirky + book reviews)

• Isaac Chotiner on anti-zionism-benjamin-moser-book-review
• Dennis Muller on bluster-and-betrayal-paul-barry-probes-how-steel-tycoon-sanjeev-gupta-hoodwinked-the-powerful
• 
  

vox wonk

• spilling-secrets-and-shrinking-chains-how-weak-laws-narrow-supply-networks 
  
• view-killing-productivity-allocative-cost-war-ukraine 
  
• price-elasticity-us-shale-oil-supply-insights-natural-experiment 
  
• some-questions-bank-england-review-should-ask 
  
• mission-possible-making-teenagers-read-newspapers 
  
• inside-automotive-supply-chain-empirical-evidence-italian-business-business-trade 
  
• workers-age-and-ai-adoption
  

Mark the Graph

 If you enjoy economics like I do theen Mark the Graph is essential reading and we have been lucky as he has been in sensational form lately.

If you haven't then read these"

• potential-speed-limit-for-economy 
  
• what-real-bond-crisis-looks-like 
  
• the-new-keynesian-synthesis-explained 
  
• the-australian-economy-right-now 
  
• r-star-as-international-price 
  
• seeing-australian-r-star-through-different-windows
  

We are very lucky to having writing so much!!

one Nation's immigration 'policy'

 One nation released their immigration policy yesterday. It was a joke.

Let us go back to what I wrote about not long ago.

It appears ( this is guesswork as we only have a press release. no costings, no press conference no nuttin).

They love back packers as they help the agricultural sector so no reduction there.

They sat they like skilled labour BUT only what they determine and no family is allowed into the country whilst they are working. No country imposes this so why would anyone wish to come to australia to work.

There are no family reunions. No surprises there.

There is a HUGE reduction in overseas students. We have no idea of what course this will involve. This would involve large decreases in revenue for Universities but there is no increase in government spending to offset this.

They do not even mention the effect their policy would have on the budget. Perhaps they do not understand!

Abul Rizvi makes the valid point of the HUGE increase in compliance costs this policy would cost. He would know as he was  previously the deputy secretary of the department!

I see a number of people have made the prediction of a recession if this policy was implemented. Joyce has said he won't take any advice from economists on this matter. I very much doubt he would understand their advice anyway and this showed one nation is going full anti-intellectualism now. It is policy made on vibes.

In essence this policy is a joke. It is not thought out at all.