Comments on: Big cuts and little cuts http://inside.org.au/big-cuts-and-little-cuts/ Current affairs and culture Wed, 08 Sep 2010 02:28:17 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: James Haughton http://inside.org.au/big-cuts-and-little-cuts/comment-page-1/#comment-56019 James Haughton Wed, 03 Mar 2010 23:36:50 +0000 http://inside.org.au/?p=5667#comment-56019 While this seems like a "common sense" attitude towards government spending - of course efficient spending is better than inefficient spending - arguing that efficiency means that spending can (or should) be cut is a non-sequiter. It makes more sense to use the savings generated by efficiencies to supply more of the now-efficient services. Zero-deficit policies strangle public services and social dividends without holding back exploding private debt, in fact they encourage it. According to the neo-Chartalist school (http://en.wikipedia.org/wiki/Chartalism), of which Bill Mitchell is probably the most prominent Australian advocate (http://bilbo.economicoutlook.net/blog/), if governments cut back on spending the result will be recession as the money supply is strangled. Money cannot be treated as a neutral substance with an independently determined supply when it is a product of the very governments which are spending and taxing it. While this seems like a “common sense” attitude towards government spending – of course efficient spending is better than inefficient spending – arguing that efficiency means that spending can (or should) be cut is a non-sequiter. It makes more sense to use the savings generated by efficiencies to supply more of the now-efficient services. Zero-deficit policies strangle public services and social dividends without holding back exploding private debt, in fact they encourage it.

According to the neo-Chartalist school (http://en.wikipedia.org/wiki/Chartalism), of which Bill Mitchell is probably the most prominent Australian advocate (http://bilbo.economicoutlook.net/blog/), if governments cut back on spending the result will be recession as the money supply is strangled. Money cannot be treated as a neutral substance with an independently determined supply when it is a product of the very governments which are spending and taxing it.

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