Ultimately, they say, governments could just pay off their own debt (which is in their own currency) through printing more money. The only real way we can pay back this debt is by producing and trading things.Djiniyini talks about the impact of buying imported goods rather than local goods and how this impacts the economy and the national debt.The question “is it OK to get a pension from the government?” is answered, saying that if you worked all your life and paid tax life then it might be good for the Government to look after you.
Money gets value from the production of goods/services by all the workers in Australia. In March, the Government took out a 12-year loan worth $1.2bn dollars, at an interest rate of 0.8185 per cent. For years we have been told the debt is a threat to the national economy. Prior to 1959 the Commonwealth issued and printed its own money and had control of the printing of money.
Reserve Bank of Australia. Learn more here.....
Podcast 70. Objects such as possum fur and tobacco or special dedicated food.Some Yolngu think that a very rich person like the Queen makes all the money. That may sound absurd — like shifting $5 from your left pocket to your right and claiming you're $5 richer — but it's an idea that's suddenly shot to prominence as governments have taken on huge amounts of COVID debt.Broadly, this is known as Modern Monetary Theory (MMT).For decades now Western governments have operated on the idea that governments and the public they serve have to 'live within their means'.This means that governments should only spend as much as they have, which is what they receive from taxation and some other sources (like income from selling public assets).If we imagine a government budget is like a household one, this appears to make sense.MMT is based on a simple idea — countries are not like households.Because they can issue their own currency, they can never run out of money in the same way a business or a person can. Djiniyini Gondarra and Richard Trudgen talk about money in Australia, including where it comes from.Money is produced and held in the Reserve Bank in Melbourne and is made under strict laws and regulations.It cannot be given straight to the government and the money cannot come out of the bank as a gift. Copyright Ⓒ Why Warriors Pty Ltd, All Rights Reserved. Related They can issue legal tender — aka 'print money'.To buy the government bonds, the RBA issued itself billions of new Australian dollars.This money is essentially unlimited. They can issue legal tender — aka 'print money'. "MMT may offer a way out of what may be needless economic misery.People queue for access to a Centrelink Service Centre in Sydney, Monday, March 23, 2020.A man walks past the the National Debt Clock in New York on February 15, 2019.Dozens of people queued outside the Centrelink office on York Street in South Melbourne on March 23, 2020, as huge shutdowns hit Victoria in a bid to restrict the spread of coronavirus.US President Ronald Reagan with British Prime Minister Margaret Thatcher in 1981. "As long as we keep producing goods and services and money keeps flowing through the economy, the national debt never has to be repaid. In September 2019 — way before the pandemic — the US Federal Reserve (like our RBA) started up the QE machine again, in response to sluggish growth and general fears of an economic downturn.Here's how it works. "This initiative is funded by the Australian Government" A government bond is a type of IOU — the government promises to buy it back from the buyer after a fixed period, plus pay interest.Central banks like the RBA are special kinds of public institutions tasked with managing the supply of money in an economy.By buying government bonds from banks and pension funds the RBA is increasing that supply of money — effectively pumping cash into the economy.
How money is used and comes from the Reserve Bank is much like how Yolngu used other items in a similar way to money in the old days. The value does not come from gift giving. Or Zimbabwe, where inflation is at 500 per cent (meaning the cost of goods will increase by five times in a year)?The MTT response to this is that a government may have infinite piles of cash, but it shouldn't always spend them freely.In other words, the limit on government spending shouldn't be the budget, but inflation.Here's that idea in more detail: MMT says inflation will only happen when aggregate demand (all the purchasing being done in the economy) outstrips the goods and services available for purchase (the supply).
"We've been told there's no magic money tree," she said.Having shown that it can create money when needed, it may be hard for the Government to justify cutting spending again, she said.The big question is whether Australia will resort to austerity measures — slashing government spending and selling off the few remaining national industries, like Australia Post — after the pandemic has passed. The pair championed the idea of small government. Djiniyini Gondarra and Richard Trudgen compare traditional Yolngu trade with the Macassans with current government trade regulations. Money gets value from the production of goods/services by all the workers in Australia.
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