Now to pay for all that spending

From Andrew Bolt (there is no such thing as a "free lunch" from the government. Sooner or later, somebody has to pay and it is always us!): The good news is that the recession is not a bad as so many people screamed. The US is still in deep trouble, but France and Germany are now out of recession, and China is surging on. But now for the consequent bad news: THE Reserve Bank believes the downturn will not be much worse than the 2001 dip and is eager to start raising interest rates from levels designed for an economic emergency back to more normal rates. The bank has not yet decided when to start raising the official cash rate from its 40-year low of 3 per cent, but governor Glenn Stevens said yesterday that financial markets, which expect a rate rise by the end of the year, had good reason to expect Australia would be one of the first nations to move… Mr Stevens declined to nominate a figure for “normal”, but said the long-term average over almost two decades of low inflation was between 5 per cent and 6per cent. The tip is for a 2 per cent rise by next year. Strugglers lured by the first-home-owners grants to buy into the market are at risk, and we will now regret Kevin Rudd’s decision to spend so many billions on so little to “save” us - billions it will now cost much more to repay. No wonder he’s short of cash: THE Rudd government is considering slapping a wealth tax on the country’s most expensive family homes.

Posted via email from Garth's posterous