While on a quick stopover in Australia, Prime Minister Rudd is urging us to spend up big to rescue the economy. Not so long ago our Treasurer, Wayne Swan, was warning us about inflation. We had spent too much. We were being irresponsible by going into debt. So stop spending, he told us, and to make sure we stopped being rash he encouraged interest rates to increase. He also talked the economy down. In that he succeeded, only too well.
Meanwhile, everything went crashing down in the rest of the world and so we were told that the economy was slowing down too much and we had to help it along. In an about turn, Swan gave us some money to do it with — (or with which to do it).
I remember when handing out wads of cash was frowned upon when Labor was in opposition. Apparently, things are different when you are in power.
I don’t know how people can spend everything on the say-so of a government when the Reserve Bank Governor says it’s not actually necessary. Not surprisingly, owing to all the gloom and doom in the media, people are afraid they will be left broke and homeless, so they aren’t too keen to spend up big.
How can you blame us for being wary? The sensible thing to do is to spend a little and pay off some debts with the rest. Nothing wrong with being cautious, in my opinion.