So the government thinks it will run a deficit of around $30B this fy. Do you really believe that if the government ran a balanced budget and reduced spending which would mean that there would be $30B less spending in the economy that this would drive demand and drive the economy? You can't incentivise people to save and have SG which lowers spending power and then not replace it with anything. You will just end up with higher unemployment and less spending. You can do it for a short period of time by allowing the private sector to pile on debt but in the end that debt must be repaid in the private sector which reduces spending in the future. Not so for the government, the limitation for government spending is inflation.
MFG Price at posting:
$26.78 Sentiment: Hold Disclosure: Not Held
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