Stimulus package won’t work

February 12, 2009

Last week’s horrific bushfires have shocked and saddened us. Please consider donating to the Red Cross Bushfire Appeal.

While our attention and thoughts have rightly been on the bushfire tragedy, debate about the government’s stimulus package continues.

On Monday the IPA’s Professor Sinclair Davidson gave evidence to the Senate inquiry on the stimulus package. He was the only person who recommended outright rejection of the package. His testimony is available in Hansard.

Sinclair referred to this significant oped in the New York Times by Greg Mankiw of Harvard University – one of America’s leading economists.

You can count on the fingers of one hand the number of academics and business economists in Australia who have argued against the stimulus package. In America there’s a similar debate going on – but people are less afraid to speak out – here’s a brilliant newspaper advertisement from our colleagues at the Cato Institute in Washington.

I wish I could say I was surprised when I saw the Treasury Secretary Ken Henry admit that the government had no idea whether the stimulus package will actually work.

For recent IPA commentary on the stimulus package, you can read Julie Novak’s piece in The Australian Slaves to Keynes saddle us with debt‘ last Friday, my regular column in the Australian Financial Review also last Friday, ‘Rudd’s rush is unseemly‘ and Alan Moran’s piece in the Herald Sun of last Saturday, ‘Rudd’s plan a dead weight on the future‘.

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