Good Lord Deliver Us.
There should be a rule that anyone wishing to enter public life should have worked with his or her hands, and should have owned, or at least managed, some sort of business. This would help to get rid of the idea that there is such a thing as free money, which the government can use for projects, such as saving the economy or creating jobs. I shudder whenever I hear politicians talk about job creation schemes.
In the latest plan from the Australian Federal Government, some $2 billion of tax payer funds is going to be used to provide loans to commercial property developers. The four largest banks in Australia are also being asked to put in $500 million each.
Why would this be necessary? The answer is that in the present circumstances developers may not be able to access funds to finance or refinance their projects.
But hang on a minute. Wasn’t the root cause of the present recession US government interference in the banking sector, and in particular, pressuring banks to give loans to people and organisations which would not have qualified under normal lending criteria, and in many cases were not able to repay the loans they were given?
So how is doing the same thing with taxpayer funds going to solve problems in Australia? Of course it won’t. It’s plain silly. If bankers operating under normal commercial guidelines don’t consider a particular project or property developer to be an acceptable risk, then the government giving them a loan is not a reasonable or responsible use of tax payer money.
Part of the problem is that many politicians do not seem to understand that there is no free money. Money they give to their pet projects, including unprofitable businesses, has to be taken from businesses which are actually producing something and making a profit in doing so, or from people employed by those businesses.
Taking money from people and organisations which are producing wealth, employment, and taxation income, and giving it to people and organisations which are not, will not save us from recession. Ultimately such policies undermine the economy, including the social welfare structure and safety net.