Fiscal policy

No more hope or glory for Britain

The stakes for Britain could hardly be higher. A return to the pre-crisis times of ‘Cool Britannia’, let alone Elgar’s Land of Hope and Glory is nowhere in sight. And instead of only printing Adam Smith’s portrait on their bank notes, British policy-makers should rather have read the great master. [...]

Europe’s slow, painful death

There is something comical about current talk about a potential Greek bankruptcy. No, the state of Greece’s public finances is certainly no laughing matter. But it is funny how politicians and financial markets are getting excited about this as if it were news. [...]

Trans-Atlantic Fiscal Follies

There are good reasons to remain cautious about Europe’s economic future. While it is true that things have somewhat stabilised after the tumultuous events of the last 12 months, we should not forget that there are some difficult challenges ahead. For Europe, the financial crisis may be over, but a new crisis is just about to begin. [...]

Big government not so smart

Over the past 15 years, Australia enjoyed the benefits of having a comparatively small government, healthy public finances, and strong economic growth. Swan’s budget signifies a departure from all of this. The Treasurer is leading us towards big government, permanent deficits, high debt, and slow growth. As it turns out, this is the very opposite of smart government. [...]

It’s all down to the market

In an email debate, David Hetherington and Oliver Hartwich discuss the coming budget, whether the Government's stimulus package is wise and sustainable, and what Treasurer Wayne Swan should drink on budget night. [...]

Still no life on Mars

In Germany, but not only there, the economic ideas of the 1970s are celebrating a revival. But why would anyone want to retry the old recipes for more regulation and fiscal stimulus when they so spectacularly failed back then? It may well turn out that watching Life on Mars is a better way to indulge in 1970s nostalgia. [...]

Rushing to spend like Britain could leave us out in the cold

So is Australia really just a warmer version of England, as the immigration officer suggested to me 10 years ago? Probably not yet, if simply for the fact that in the past decade Australia has avoided the worst mistakes made in Britain. But if Rudd continues his New Labour-like policies, Australia may well become another Britain, if only without the snow. [...]

The Economic Outlook

Before the Budget, there was widespread agreement around what to expect. It was to be a tight plan for difficult times with not much room for manoeuvre, let alone the opportunity of fiscal stimuli. This forecast was pretty accurate, but hardly anyone seemed to notice. [...]

Budget 2008: No room for manoeuvre?

Constrained public finances should not be an excuse to surrender to the seemingly unavoidable. It is times like these that ask for the boldest, most courageous solutions. And it is times like these that Parliament should play a greater role in developing ideas for a better economic future. After all, that is what Parliament is all about. [...]

Sharing the proceeds of what?

"Sharing the proceeds of growth” has always been a nice, if also a little vague formula. It does not set the degree to which growth should be shared between tax cuts and public spending. Unfortunately – and almost by definition – it becomes an impossible task if there is no or only little growth and consequently not much to share. [...]