This morning's article on news.com.au was "Aussie mums leading economic recovery", which was published in the Courier Mail.  The article predictably goes on to celebrate the actions of the mighty all-powerful Federal Government in response to the economic crisis and the subsequent response from the general public, specifically moms, to SPEND.  This spending has given the consumption sector, roughly 70% of our economy, a necessary boost to weather the passing storm.

So let's start thinking for ourselves and switch off the telescreen with Big Brother's face on it and what do we find?  Well, the government expanded the Federal deficit by about $300 billion... unnecessarily as the fall in tax revenues would have only taken us back to the 2007 budget (yes, a whopping two years ago).  The government borrowed billions to give most of us $900 to spend money... something so incredibly immoral and idiotic I can hardly contain myself... that money wasn't a tax break, it was borrowed money, which means you and your children will be paying off this ludicrous and childish cash-splash with higher taxes and inflation well over the $900 you received.  House prices were set to collapse, so the government increased and extended the first home buyer's grant to squeeze as many Australian citizens into mammoth debt and an elimination of their savings as possible to delay the pain.

And what do we hear from the Federal government non-stop: spend, spend, spend, spend.  Not save, be prudent, save for a rainy day, work hard and protect your money because we haven't begun the depths of the financial crisis in this country yet... no, SPEND.  'The consumer is the engine of this economy', which given the size of this sector in this economy is true, but is a serious imbalance that needs to be corrected via RECESSION.

ANY IDIOT CAN CONSUME... if you give a 16 year old girl a credit card, drop her off at Myer or Cotton On, she will quickly become adept at the art of CONSUMING.  This is essentially what we have done in this country, already burdened with a mortgage, car loan, and some credit card debt, the government has commanded asked us that the solution to our problems is to go the mall and SPEND, run up the credit card or line of credit from your house even more.  Do you see how stupid this all is?

CREDIT comes from SAVINGS.  SAVINGS comes from CAPITAL accumulated from an increase in PRODUCTION.  You cannot CONSUME if you have NO PRODUCTION as you will have nothing to TRADE and thus NO CAPITAL.  The only way we can CONSUME WITHOUT PRODUCTION is by BORROWING other people's SAVINGS.  

And the party is over Australia, this cannot continue forever.  Sooner or later we are all going to pay for the most irresponsible generation in modern history, and we're going to have to go back to work producing stuff that can be bought by people who are also producing stuff and have money, like China and India.

God bless,

Dr Washo