Friday, October 19, 2007

So, who do you trust to keep interest rates low, huh? Huh?

It's hard not to be cynical and join some dots that shouldn't be joined: Rise in support for J-Ho and Libs around the same time they announce their $34 billion tax cuts.

That is, some undecided voters may be swayed when he offers them a big juicy tax cut.

The. Fuck? I don't pretend to be an economist - I struggled with it in Yr 12 - but even I know the most basic of equations: Tax cuts = greater spending = increased upwards pressure on inflation = increased upwards pressure on interest rates.

Are some voters genuinely so dim that they're prepared to be bribed at election time by a cynical vote-grab, scratch their heads when interest rates rise, say, five times after the bribers to whom they give their vote win the election, then forget about that long enough to vote for them the next time round?

Never mind the necessary slashing of department, service and infrastructure funding required to fund the bribe - that can start six months after the election, when voters' apparently eccy-fucked short-term memories fail to remember their part in helping it happen.

I don't know what will happen to interest rates under a Labor government. I do know that unlike Howard, they have not claimed to be single-handedly responsible for interest rate movements.

And I know that I would never trust a government that determines its tax policy solely according to what will maximise their votes at election time. How in godbuddallah's name does this government bask in the misperception that they are great economic managers, when they spend like the drunken proverbial at election time for which the voters suffer in the three years following through higher interest rates and reduced services?

I guess this could be put down to that 'inevitable' narrowing in opinion polls during the election campaign you hear about. But if Labor do not effectively get across the message that what the government's doing right now is by definition grossly irresponsible - and will lead to long-term pain - they'll probably lose yet another election. Whoopee shit.

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At 19/10/07 1:31 pm, Blogger Dawei said...

Not only that, but the immediate tax incentive will be at most something pitiful like a $20 dollars a week saving! Ooh. Although, the tax cuts are primarily aimed at middle income earners, who generally smoke and gamble so I suppose that does pad their pockets a little. God. Will people really be fooled by this?

At 19/10/07 3:05 pm, Anonymous remember Paulie said...

I'm hoping that Krudd and the Pointy Woman will manage to snatch defeat from the jaws of victory. Let's all sit back and watch......

At 19/10/07 4:03 pm, Anonymous bec. said...

I have a bad feeling that we are fucked.

Watching Insight the other night, with undecided young voters. " know, i'll like, probably vote, like Liberal, because i got a pay rise with the new AWA's, and they are you know, good with the economy and stuff"


At 19/10/07 4:30 pm, Blogger Sam said...

Apparently Dawei - unless somebody manages to educate them in Economics 101.

Bec: Definitely worth assuming the worst. I'm sure it will be a much closer election than '04, but the Insight folk do provide that nasty reality bitch-slap.

At 19/10/07 5:21 pm, Blogger Ken_L said...

They're not really tax cuts though. Costello's just estimated how he'll have to adjust the tax scales to make up for inflation. It's what he's been doing every year for ages, all he's done is announce it in advance. Plus he's left himself lots of room to amend things if Teh Economy goes sour.

At 19/10/07 10:11 pm, Blogger Evan said...

does not a countries people get the government they deserve then? It's the only way I can justify the stupidity of the same swaying voters who claim 'Howard is clever, such a strong dollar'
Economics should be compulsory- labor may then get a look in,
Great blog

At 19/10/07 11:51 pm, Anonymous Bill said...

Labor didn't think that "what the government's doing right now is by definition grossly irresponsible." They just copied it - yet another disappointing "me too". Will copying Howard lose them yet another election? Doesn't Krudd realise we want something different?

I share Bec's dismay at Insight's young voters. I think Jenny Brockie was pretty shocked too.

At 20/10/07 2:38 pm, Blogger Sam said...

Are some voters genuinely so dim that they're prepared to be bribed at election time by a cynical vote-grab

Unfortunately I don't think it's so much that people are dumb, but that they're greedy - and if you just look at headlines or news soundbytes, "$34 billion" sounds very impressive.

And as lame as I find Krudd's "me too"-ism, I don't blame him for it, given that the Libs will twist even the most trivial points of difference against him (see: Robert McLelland).


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