The ideological transformations that our Prime Minister has undergone would put the Shmoo to shame. He once described himself as an “an old-fashioned Christian socialist.” During his 2007 federal election campaign, eager to shake off their record of atrocious waste of taxpayers' money, the ALP then ran a television commercial in which he promoted himself as an economic conservative:
A number of people have described me as an economic conservative. When it comes to public finance, it's a badge I wear with pride.
The commercial can still be watched on Labor's YouTube channel.
The contrast with his current policies is extraordinary. This is the same man that just jacked up the nation's legal credit limit from $75 billion to $200 billion and burnt through $50 billion in just six months.
Rudd's out of control spending is far from unexpected. Without fail, every consecutive federal Labor government has left the nation in deeper debt than the previous one. Not once have they ever repaid the Commonwealth's debt.
What is Kevin Rudd's justification for his wild spending spree? Keynesian economic theory. The story he gives—wrongly—is that capitalism has failed, and to save the economy, the government must spend as much money as it can in a short time frame using borrowed money. Unfortunately, Keynesian economic theory is rather theoretical. The empirical results of studies into the effectiveness of deficit financed government spending are less impressive than the theoretical evidence.
At the heart of the economic problems that began in the US is a mountain of debt which led to a subsequent collapse in confidence. Kevin Rudd is trying to fix the problems with more debt. It's just like an alcoholic trying to cure himself by drinking spirits.
