Friday, January 28, 2011

Economics of the Queensland Flood

Seen here:
The Government will also save A$1 billion by deferring work on road projects in Queensland and other states, releasing skilled labour for rebuilding.
This is something normally only seen on libertarian and Austrian blogs, so i was quite surprised and pleased to see it coming from Julia Gillard.

It is a recognition that government spending crowds out and has a negative effect on other activity(though arguably not always a net negative effect). Because of this, a billion dollars of government spending is being deferred, specifically work in areas which use a lot of the same resources - in order to crowd out the rebuilding less.

There's seemingly only one step left before they think about government spending crowding out the private sector, and the implications that "stimulus" government spending does more harm than good, and that government projects in general - including broadband network spending -come at a higher cost to the country than is currently accepted, and that in many cases these projects are simply not worth it.

Monday, January 17, 2011

People who don't know the difference between "contribute" and "facilitate"

Auckland Airport could contribute nearly a fifth of national gross domestic product

And how do they justify that statement?

The Market Economics study, commissioned by Auckland Airport, said [...] The airport was projected to generate and facilitate 14-19 per cent of national GDP
Well, all that means is that 14-19% of businesses will use *something* that gets flown in or out via the airport. Hardly surprising. The journo makes it sound like 1/6 of GDP will be made just operating the airport.

The whole study appears to be an exercise in vanity, and the article appears to be a repeated press release with nothing of substance.

On a lighter note, things look promising for Tunisia. I just hope they can work through things peacefully and resist the desire to get revenge. Congratulations particularly to the new secretary of state for the youth.