June 27th 2009

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Articles from this issue:

CANBERRA OBSERVED: Peter Costello calls it a day

EDITORIAL: New South Wales puts Australian firms first

VICTORIA: The threats to Victoria's electricity and water

GENERAL MOTORS: Restructured GM won't thrive without new mindset

UNITED STATES I: Obama's celebrity-style media spectacle

UNITED STATES II: Cairo speech impressed Western media, not Islamic world

IRAN: US conciliatory approach to Tehran backfires

ASIA/PACIFIC REGION: East Timor consolidates stable democratic government

UNITED STATES: Husband and wife spied for communist Cuba

SCIENCE AND PHILOSOPHY: How science can diminish humanity

EUTHANASIA: The perils of euthanasia "with safeguards"

MEN AND IDEAS: Bob Santamaria's role in Australia's culture wars

OPINION: The Japanese threat facing Australia in 1942

Failure of stimulus packages (letter)

Russia's population crisis (letter)

IPCC's political agenda (letter)

MEDIA: ABC Chaser's war on common decency

CINEMA: Hollywood morality for an audience of fools - State of Play

BOOKS: SHAKESPEARE'S SHATTERED YOUTH: Laming or Elixir? by Lucy Sullivan

BOOKS: CROSSING HITLER: The Man Who Put the Nazis on the Witness Stand, by Benjamin C. Hett

Books promotion page

Failure of stimulus packages (letter)

by Peter D. Howard

News Weekly, June 27, 2009

The realistic assessment from Peter Westmore in his editorial, "Implications of the budget black hole" (News Weekly, May 16), that increased taxes will harm business and increase unemployment, and that last year's budget surplus was blown on two failed attempts at stimulus cash handouts contrasts with the misplaced ideas of ANZ chief economist Saul Eslake in the same issue. Mr Eslake believes that easing of monetary policy and large budget deficits are preferable to "the near-term risks of doing nothing".

Even worse, the London Economist was quoted as saying, "The Depression showed how damaging it can be if governments don't step in when the rest of the economy seizes up." Has nothing been learned?

Dr Thomas E. Woods, Jr, in his book Meltdown (Washington DC: Regnery Publishing, 2009), explains that in the US recession of 1920-21 production fell by 21 per cent by the middle of 1920, with worse conditions than in 1930, yet recovery was swift because the US Administration and Federal Reserve refrained from public works spending, government deficits or inflationary monetary policy. Instead there was a drastic cleaning up of credit weakness and reduction in the costs of production, allowing the free play of private enterprise.

Conversely, Woods asserts, the post-1929 Great Depression was fuelled by Hoover and then F.D. Roosevelt raising taxes, expanding public works spending, establishing welfare programs, destroying existing crops, imposing acreage reduction requirements, and legislating for cartels to establish minimum selling prices and to limit output. We all know how deep and long that fiasco was.

The plight of Japan from 18 years ago also confirms the failure of stimulus packages and interest rates at zero.

Peter D. Howard,
Springwood, Qld

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