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More Goodies and Baddies

So on Thursday morning we were greeted by the thoroughly unedifying spectacle of Federal Treasurer and Irredeemable Incompetent Scott Morrison pitching up the idea that there is now “Good Debt” and “Bad Debt”. You have got to be kidding me. After years of relentless talk of “Debt and Deficit Disaster”, people are starting to notice that under this government, the debt and deficits continue to climb, yet unemployment remains stubbornly high, inflation has been well below target, and consumer confidence is shot. Which begs the question: what the hell are they spending this money on? It clearly isn’t going anywhere useful.

So now ScoMo is going to rewrite the rules, and retrospectively declare some debt good, and some bad. Furthermore, entire functions of government will be rated on their net debt, as if the whole thing were some corporation implementing an internal charge-back model, rather than, well, government programmes: doing the unprofitable things of positive social worth. It’s just idiocy. You don’t have to be Einstein to figure out that this is going to lead to an apples and oranges comparison of all debt under Labor, versus (what they hope will be) a downward trajectory of “bad debt” under their so-called superior economic management. Ignore the “good debt”, nothing to see there, folks! That’s investment! Jobs and Growth. Just ignore that man behind the curtain.

So how will debt be classified?

This unmitigated disaster of an NBN, that will be worth a fraction of what’s been spent on it when completed, that’s a “good debt”, presumably? Obviously welfare will be “bad debt”, that goes without saying. Where does the Health Insurance Rebate fit? How about the Chaplaincy programme? Wars on Terror etc?

This mob truly are irredeemably incompetent. They’re obsessed with what the ratings agencies think of them despite it being of zero consequence to anyone, and fixated on how many dollars they can claw back out of the economy, as if they’re some scarce resource we might run out of, rather than the renewable fuel necessary to makes the economy work.

And whilst they bloviate, millions of hours of productive human potential are wasted every day, lost forever.

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The Earth Is Doomed

In an unusual development, The Associated Press have published a verbatim transcript of an interview with The Donald. It’s pretty heavy going. I pointed it out to a friend in the US, and he said he would read it before going to bed (since he was working at the time I messaged him). I strongly advised against that. It’s not something I would recommend attempting to read unless you’re in an upright position, and preferably with a strong beverage handy.
Lindy West has written a pretty good piece about it in the Guardian, entitled “100 days of gibberish – Trump has weaponised nonsense”, which I’d also highly recommend. But you really do have to force yourself to read the original. It’s long in words yet bafflingly short on meaning, full of rambling paragraphs that surprise the reader here and there with glimpses of something approaching reality. Not actual reality, of course, but something that might be vaguely related to it.

But most of the time it’s simply extraordinarily unhinged. Not so much an interview as a stream of consciousness, into which a reporter occasionally interjects.

Often times bloggers write pieces that say something along the lines of “I’ve read this so you don’t have to, and here’s a summary”. But you really do need to have a go at taking in the stupefying madness of it yourself. That said, don’t feel bad if you can’t get through it all. There’s not even a prize if you do.

The man is crazy. Deeply, thoroughly, batshit crazy.

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Sukkar – New face, same old rubbish argument

The ALP recently announced further proposals for reining in the escalating price of real estate in Australia, and the eastern seaboard capital cities in particular. These proposals add to the changes to negative gearing and capital gains tax announced prior to the 2016 election, and introduce much higher fees for foreign property investors, and outright banning of borrowing for investment in real estate by self-managed super funds (SMSFs). There was also talk of “bond aggregators” for housing construction (meh), and the opening of a discussion with state governments about vacancy taxes on properties.

I’m not sold on the bond aggregator idea, but the rest of the proposal seems meritorious, and good on the Labor Party for getting ahead of the May budget with some concrete policy.

All that said, it’s no surprise whatsoever that the government have come out hard against these ideas. The Assistant Treasurer Michael Sukkar was quoted in The New Daily:

But Assistant Treasurer Michael Sukkar said Labor’s housing plan, including its policies around negative gearing, would actually make it harder for first home buyers to enter the market.

“We also know Labor’s tax will make it more difficult for renters,” he said.

“If you increase taxes on investment into the residential housing market, you ultimately push up rents.”

In a media release, Mr Sukkar said: “Labor’s attack on Self-Managed Super Funds shows they are once again reaching for the chainsaw.”

“Labor just don’t understand the need for finely tuned measures on housing,” he said.

He also accused the opposition of “plagiarising” the Turnbull government’s policy work on a social housing bond aggregator.

The outright case of the sooks about plagiarism can be safely ignored. The man is just being childish. But the rest of his argument about pushing up rents is simply rubbish, for one very simple reason. The renters and the prospective first home buyers are the same people. Virtually everyone trying to become a new owner occupier is currently renting a house or unit. Every property sold to a new owner-occupier reduces demand for rental property, so they largely even each other out. To put that another way, supply of rental properties may fall, but so will demand at roughly the  same rate. The proposition that these changes, (and the negative gearing and capital gains tax changes announced previously), will push rent through the roof must be challenged. It’s a failure to appreciate the macro aspects of renting versus home owner-occupancy.