A Sugar Faeries Sugar Hit

Judith Sloane, the oo's new "Contributing Economics Editor"  has decided to ignore her own new papers articles, and join in with the rest of the conga line of ruperts historians repainting the pallette of recent events, hoping against hope one would suggest that nobody cares to examine their claims to closely. In her recent outing, she makes the following claim, pushed, interestingly enough, the claims favoured by three stooges of Australia's economic current debate Larry, Curly and Moe.

But as a stimulus spending program, the problem was that the buildings were still being constructed well after the crisis had passed.

In fact, as history actually shows, the timing and extent of the fiscal stimulus, and, more importantly, the impact on our economy, was weighted almost perfectly, and tapered of at precisley the time the economy begun recovering, as was shown in the very paper she is writing in.

The main prop for the economy in the first quarter was the government’s national school’s spending program, which added 0.9 percentage points to GDP. Consumer demand held up, despite the impact of aggressive interest rate hikes by the Reserve Bank of Australia.

This major  mistake she makes really renders most of her remaining assumptions invalid. She goes on about waste (of course, it is an oo trait) even though the report by the Auditor General disagreed with them, and, as Ben Eltham in New mathilda quite succinctly indicated, this perception (which they continue to push) was largely due to the oo itself,

You could be forgiven for thinking schools stimulus spending was a complete flop. It wasn't - and the misunderstanding is largely due to media distortion, writes Ben Eltham
....
News Limited has largely failed to find any widespread mismanagement or cost over-runs in the schools stimulus program.

Sloane completes her cubist portrait with this hollow warning.

It is therefore imperative to consider the case for fiscal stimulus within a medium-term framework in which the costs of debt servicing and repayment are also taken into account. The short-term benefits of ramping up government spending -- the sugar hit -- are quickly offset by the need to deal with the accumulated debt.\

Interestingly, it is now the libs, not Labor, who are running away from any reference to bringing back in a Surplus to the budget. In fact, they are having their own problems with a $70 BILLION BLACK HOLE. And that is without any GFC to help it along, it is simly a result of too many NO's.