Here’s a new one – the fiscal tightening in the May Budget risks the economy falling into recession. A recession in Australia! Because of fiscal policy!
Well, that’s the out-of-your-bum headline from The Australian today.
Here it is:
"PM rejects there's a risk economy could slide into recession as a result of budget cuts"
Can anybody seriously suggest that the Australian economy is about to “slide in recession” for any reason at all and yet more absurdly suggest that fiscal policy will cause it?
Silly boy, parts of the country that are already in recession! Why do you think incumbents are so unpopular in Queensland, for instance? Why has there been no - nil, nada - net employment growth in the last year?
ReplyDeleteSee, that's the trouble with macroeconomists - they only care about AGGREGATE GDP (growth in which is mediocre at the moment anyway, BTW). When your feet are in the oven and your head in the freezer they'll tell you that in the aggregate you're comfortable.