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The Weekend Quiz – January 19-20, 2019

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

1. If economy-wide average nominal wages fail to keep pace with the inflation rate then it means the owners of capital are enjoying an increasing share in GDP.

2. Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find:

3. Assume that the inflation and nominal interest rates both zero and constant. Consider a country with a public debt to GDP ratio of 100 per cent, which the mainstream economists consider to be dangerously high. The mainstream prescription is to run primary fiscal surpluses to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy will only work if there is positive real GDP growth.

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    This Post Has 6 Comments
    1. Dear Bill
      I read with interest your Wednesday, 9th January Blog, on mindlessness and myopia of Neoliberalism using the policies of Queensland’s Campbell Newman Government to illustrate your point. You made a compelling case however you failed to mention the most mind blowing piece of stupidity orchestrated by the Newman government in pursuit of balancing the budget. This egregious piece of stupidity was the removal of all the defences that Queensland and Australia had over decades put into position to prevent the reintroduction of TB into Australia. Not only did Newman remove the defences but provided a vector by which this could happen. While this particular piece of unimaginable vandalism can be laid at the door of Newman, just as complicit were of the 82 Liberal Nation Party members in the house of reps, not one of whom spoke up against this course of action and also the media.
      First the rational:
      Queensland had TB clinics on Saibai and Boigu islands situated 7km and 8km off the New Guinea coast where New Guinea citizens were being treated for TB. The rational was this was an unnecessary expense on the Queensland Government and they should be treated at New Guinea clinics (third world not even rudimentary) or Port Moresby which is funded by the Australian federal Government: they were not Queensland’s responsibility. (Port Moresby is hundreds of kilometres away and there are no roads and the only transport is by limited air service).
      TB has been wiped out in Queensland and the infectious disease facilities at Cairns is redundant as is the specialist tracking and treatment facilities in Brisbane.
      The result:
      These facilities were closed down and possibly a few million dollars were saved.
      The facts on the ground:
      Drug resistant TB is raging in the Western Provinces of New Guinea within a few kilometres of Saibai and Poigu islands which are part of Australia.
      The people on the islands who are Australian citizens have family connections with the mainlander, trade and hold joint celebrations and get TB as a result. Apparently it takes about 15minutes to get from New Guinea to the Australian Islands.
      Without a clinic on the islands TB sufferers fly to Cairns for treatment where they were put into public wards. Without central tracking facilities in Brisbane no one would know what is going on and in addition the specialist knowledge for treating TB which had been centralized in Brisbane was no longer available. The result was Cairns local doctors who had never seen this disease in their life were on their own.
      Just to cap off these actions of total lunacy Cairns is a Fly-in Fly-out centre for mining industry providing a vector to spread TB to Brisbane, Sydney and Melbourne.
      Older readers would know the time and effort it has taken took to eradicate TB: TB hospitals, the mobile chest X-ray vans, decades of effort: just a guess but the cost must be in the billions. All this put at risk by mindless myopic neoliberalism.
      In addition to the lack on any noticeable disagreement within the LNP was the lack of criticisms of these polices in the media by the editors and op writers.
      As Queensland readers will know the Campbell Newman Government suffered one of the biggest reversals in Australian political history losing government at the next election; the incoming Government reversed the policies so the disaster did not occur. However many of the LNP member who sat on their hands while these policies were formulated and the media who gave tacit approval by their silence are still with us waiting for the political pendulum to swing to re-emerge.
      We have a long way to go to rid ourselves of this disastrous philosophy

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