National savings are not a government slush fund

This business with superannuation is a further derivative of Keynesian economics. There was a time that economists actively understood that the only way to increase an economy’s standard of living was to raise investment, and that the only way to raise investment was to encourage more saving.

With the arrival of Keynesian economics, saving went from being a positive to a negative. It was spending and not saving that drove an economy. My Free Market Economics, classical to its back teeth, harangues about the need for more saving to raise living standards. In contrast, this is the sole statement in the fifth edition of Bernanke’s Macroeconomics that discusses the role of saving:

How is private saving in an economy put to use? Private saving is used to fund new capital investment, provide the resources the government needs to finance its budget deficits, and acquire assets from or lend to foreigners.

This is an absolute scandal yet this is economics at the highest level and it really could not be more low grade if it tried. No notion whatsoever that an economy is driven forward through saving. That it is the saving that flows into private sector investment that funds our growth. We live in a time of immense economic ignorance when people like Bernanke and Krugman are able to call the economic shots.

This conception then flows into government policy, to the low grade intellects who bribe voters with their own money at the expense of the better standard of living they are being prevented from having. So far as Gillard and her ilk are concerned, our own personal savings are a slush fund for the government to use as it sees fit. Our hard earned savings are there to be channeled into whatever program the government decides to encourage however little value adding those programs may achieve.

It will ultimately be the common sense of the community that will stop them because nothing else can. Eventually the stupidity of following macroeconomic textbook theory will be seen to be the disaster that it is. In the meantime, however, we leave ourselves open to be plundered by whichever politician can convince us that they have the best way to waste our money.

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