Does Australia need a simulus spending spree to get people back to work?




The RBA says the government has nothing to fear from rising debt and inflation, and hints more help is on its way.

(Image: AAP/Deam Lewins)

In this uncertain time the Reserve Bank of Australia tries to maintain stability. The world is in a deep hole: economic output is down, much more than in the 2008 crisis, and unemployment has risen sharply.  Australia has suffered with the rest of the world.

In a speech to the Economic Society of Australia yesterday, Reserve Bank deputy governor Guy Debelle did not sugarcoat the problems.  Economic recovery will be a long time coming. 

While the RBA tries to keep borrowing costs low and credit available (monetary policy), Australia’s recovery will depend more on fiscal policy: government spending and taxes.

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