05-08-2013, 10:02 AM
(03-08-2013, 11:33 AM)freedom Wrote:(03-08-2013, 10:22 AM)felixleong Wrote: in the end garmen wins and consumers lose, stupid policies
they are punishing savers
they should have more consumption taxes instead
I don't know whether australian policy is stupid or not.
But the way you think is not rational at all. Encouraging saving but damaging consumption is one way to hell for any meaningful economy.
Now this is a paradox... Encouraging consumption will no doubt boost the economy, however, on an individual basis, saving is the correct thing to do, and savers should channel their savings into productive assets so as to boost their future earnings.
There is no simple policy that can fulfill both objectives. However, if given a choice as to whether the government has to run a budget deficit or savers must be punished, i would go for the former. I always think the governement can afford to run a deficit, as long as it is in tandem with the other big nations (US, china, japan, europe, etc). I think it is unnecessary to run a surplus when others are running a deficit.