Applying some MMT arithmetic to Australia’s budget

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NOTE: I made an error in my arith­metic in this post which I’m fix­ing up after too lit­tle sleep last night thanks to the post-Bud­get lock­up drinks: the basic log­ic is OK but the num­bers are wrong. I’ll link nonethe­less and amend the num­bers tomor­row.

Will the Lib­er­al Party’s his­toric eco­nom­ic for­tune hold for this bud­get? Bal­anc­ing Joe Hockey’s books would seem to require Aus­tralian pri­vate sec­tor debt around 250 per cent of GDP by 2025…

Vir­tu­al­ly every­one knows of the descrip­tion of Aus­tralia as “The Lucky Coun­try”, but far few­er know that the ref­er­ence was actu­al­ly deroga­to­ry: Don­ald Horne, who coined the phrase, com­menced the last chap­ter of his book of the same name with the phrase “Aus­tralia is a lucky coun­try, run by sec­ond-rate peo­ple who share its luck.”

Of course, such a put-down would nev­er do in Can­ber­ra, where both major par­ties are for­ev­er try­ing to con­vince us that, with­out their skill­ful man­age­ment, we would be tru­ly cac­tus.

Yeah, right. My money’s on the wis­dom of Horne’s acer­bic wit, rather than the rel­a­tive mer­its of either par­ty. It’s luck, far more than man­age­ment, that deter­mines who looks good and who looks bad in ret­ro­spect. And the two types of luck — good and bad — have fall­en uneven­ly on Australia’s polit­i­cal par­ties to date, with the roll of the dice thus far favour­ing the Lib­er­als over Labor.

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