Tony Abbott achieves the impossible: unity among economists [View all]

There’s a joke about economists: if you ask five economists the same question you’ll get six different answers. Granted, it's not a very good joke, but it’s a fair call. Ours is a complex field, and a growing number of economists are acknowledging that the theory sitting behind mainstream economics is mostly rubbish. As a result, it’s very difficult to find consensus on real world events.

But that's where Abbott and Hockey have achieved what many thought impossible: a true consensus. Unfortunately for the coalition government, the consensus is entirely against them. The Abbott government’s agenda has been driven by three major claims, all of them economic in nature. Let’s see how economists view these three themes:

1) There is a budget emergency

Number of economists who agree: zero

2) The federal government has a debt crisis

Number of economists who agree: zero

3) Carbon pricing is an economic wrecking ball

Number of economists who agree: zero

(snip)

Saul Eslake, chief economist at Bank of America Merrill Lynch, said that to call the Australian debt situation a crisis was “to abuse the English language.”

Similarly, Nobel prize winning US economist Joseph Stiglitz used terms such as “absurd”, “crazy” and “a crime” to describe some of Hockey’s budget measures, and dismissed the perceived debt and deficit problems, noting that any Australian who worries about debt “must be out of their mind.” Richard Holden, professor of economics at the Australian School of Business, put it this way: “First, Australia does not have a debt crisis. Or, to put it another way, Australia does not have a debt crisis.”

http://www.theguardian.com/commentisfree/2014/jul/23/tony-abbott-achieves-the-impossible-unity-among-economists


Funny thing is, try telling that to any Lib-voting friends, and they change the subject. Strange how some people want the economic news to be bad. (Not that I have many Lib friends - I find it too hard to be polite to them these days.)