You’ve got to be kidding.

I’ve read the RBA statements, and more than once. I know what they say.

I’m asking you these questions because I want to know if you know what you’re talking about.

I never said ‘no time at all’. I asked you what timeframe you are talking about. Nevertheless, we are talking about production increases at the margin - no need to rebuild the nation’s industrial plant, infrastructure and commercial buildings.

Say it took around one year for tax cuts to be fully spent by households - would that be enough time for businesses to adjust to the (marginally) higher demand?

‘As I said Jeremy most business surveys appear to be saying there are constraints around.’

Yes but wheeeeeeeere??????? There are always constraints around - that’s a sign that the economy is being well managed. The question is, where are the most significant ones - the ones with consequences for the general price level?

‘My guess is the new IR laws have allowed wages to rise less than may have happened previously but even so wage pressures are out there also IF you believe the same surveys’

Yes again, but wheeeeeere??? There’s lots of scary things ‘out there’. We need to know if the threats are significant, and if so can they be managed.

You sound as if you’ve been spooked by the ‘big picture’ commentators. But where exactly is the threat coming from?

What time period are you talking about? How quickly will people spend their money? Will it be sufficiently gradual to allow businesses to expand capacity (using the ocean of capital currently sloshing around world financial markets), so as to take advantage of the profitable opportunities that will open up following a tax cut?

If so, then tax cuts sound like a great recipe for non-inflationary growth. Closest thing we’ll ever get to an economic ‘free lunch’.

In a financial environment where most people can borrow as much money as they like, when they like, for whatever purpose - and are actually doing so - it seems bizarre to want to stop them from spending their own earned income.

Keynes was an odd economist, and got many things wrong. But his saving grace was that he was ‘cheerful’: he was always talking about the ‘upside’, and about opportunities latent in the economy.

Try being a bit ‘cheery’. Australia’s half a million unemployed will thank you for it.

I do believe Keynes also talked about this precise thing.Neo-classical synthesis indeed.

Jeremy it comes up in most surveys of business. The RBA certainly highlights this and it appears to support their anecdotal evidence as well.

I thought inflation was a consequence of too much money chasing too few goods. Given that tax revenue is collected after the goods and services have actually produced - as Sinclair has already noted above in comment 17 - then giving wealth back to the people who created it shouldn’t produce inflationary pressures.