Which is better?

Listening to the unctious and ignorant comments by Swan and Gillard talking about the economy is an actual health hazard for someone such as myself. But here is the question: Which would be better, today’s level of spending and our present deficit or public sector spending cut in half with a deficit twice as large? I don’t know your answer but I do know mine. It’s the growth you want, which will only come about if we manage to cut the dead weight cost of this useless politically driven public spending.

Everyone thinks of the Great Depression having been brought to an end by the start of World War II. Sure, sure. Most of the men in their 20s and many of the women were drafted into the armed forces so disappeared from the labour market. And while this may have ended the unemployment, it hardly created an economic boom since the war was characterised by shortages and rationing as well as massive deficts and a rise in the level of debt.

World War II ends with the soldiers mustered out of service and only some of the women who replaced them in the workforce returning to the home. This is 1945 and in the United States only four years before there had been 14% unemployment. And what does the American President do? He cuts spending and balances the budget. The result: the beginning of the fastest growth in world history which continues from 1945 through until the 1970s.

Make your economy productive and it will create the growth that eliminates your debt. Continue with public spending and extenstions of various forms of non-value-adding welfare expenditures one upon the other and our economies will continue to struggle. But the public spending addictions, shared by both the politican class and their constituencies will continue to edge us towards the cliff unless some kind of economic sanity can return.

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