Budget: Pulled Pork or Paradigm Shift?

Adam Keily: [00:00:52] Hello and welcome to comedian versus economist, we demystify the world of money and help you get a handle on the bigger picture. My name's Adam and I'm joined, as always by my little older brother and real life economist, Thomas. Hi, Thomas. [00:01:05][13.2]

Thomas Keily: [00:01:05] Howdy Doody, everyone. Nice to be here. [00:01:07][1.5]

Adam Keily: [00:01:07] Howdy Doody, everyone. [00:01:08][1.0]

Thomas Keily: [00:01:10] I thought we needed a signature intro. Just the sort of build brand recognition. [00:01:14][3.9]

Adam Keily: [00:01:15] We're going to build brand recognition with Howdy Doody, everyone. [00:01:18][3.1]

Thomas Keily: [00:01:20] Well, I'm workshopping it looking for listener feedback. Actually, everyone, if you want to have your thoughts, [00:01:25][5.2]

Adam Keily: [00:01:27] cve@equitymates.com Or on the website equitymates.com/cve. Did you like or not like Howdy Doody everyone as a sign on, I will be sure to ponder that question and many others, you know, every time. So Thomas, serious time now we're talking the budget again makes it look the the hangovers worn off. It was a big night last Tuesday night. I'm sure many, many, many people around the country got excited for budget night in Australia. It's unlike any other night. Isn't it a special time of year? [00:02:01][33.5]

Thomas Keily: [00:02:01] Yes, it is. It is. And you really see that in the absentee daughter on Wednesdays off the budget. A lot of no shows at work, [00:02:09][7.8]

Adam Keily: [00:02:11] well above anyone, any sex worker for not turning up tomorrow is a bum that was following Australia's America's Cup win in the yachting RENFE. We used to watch yachting and apparently stop the nation. Bob Hawke was like, yeah, that's it. Everyone should stay up and watch a yacht. A side note, though, have you seen the yachts in the America's Cup these days? I like space ships, right? They are like water, water-borne, spaceships flying around on on the ocean, like unrecognizable from really kookaburra to really whatever it was, the kookaburra that won. I remember I had to do a school project where I went to a school project where they needed someone to design the front cover of, like the class book that we were going to have. And it was right around America's Cup time and everyone was super pumped. It was all about was about the kookaburra. The kookaburra, too, I think it was. So they're like, who can draw who can draw the cover of the book? And me, I've got no artistic talent for drawing whatsoever, but I love being involved in things. I put my hand up and like every kid in the class with a hand up and the teacher was like, All right, Adam, you can do the cover story. We get to go. And I resented Dad, Dad, I need to draw a kookaburra. And the only thing we had to remember those encyclopædia that in that set of encyclopedias we used to have. Oh, yeah, yeah, yeah. Dad bought at an auction. Yeah, yeah. And so there was no Yats in this encyclopedia, although what the kookaburra too wasn't in there. And so we decided it would be easier if we, if we copied a picture of a kookaburra out of the encyclopedia. I've never seen such disappointment when I arrived back at school the following day with a picture of a kookaburra bird whenever I was expecting, you know, the famous yacht. Oh, right. I feel like we've we've well and truly diverted from the task at hand. Anyway, what we're talking about America's Cup now, we're talking about the budget and the fact that people did have to go to work following the budget. You know, the thing was, did you watch the budget? [00:04:29][138.4]

Thomas Keily: [00:04:30] No, no, no. [00:04:31][0.9]

Adam Keily: [00:04:31] It was like the most nerdy rap battle ending I've ever seen to get to a speech like, say, Josh Frydenberg has delivered his budget speech and like at the end is like and that's the budget I really gave. I forgot what he said. But you really just sort of threw it there, as he did SCREAMO and the rest of the Liberal Party, they all just jumped up and I just started laughing and smiling. They just like, yeah, why? The guy just smashed it. Zoidberg, that kind of thing. I everyone was just totally pumped. And on the other side, it was like Albanese must have said to his crew, just like if anyone claps, you know, working tomorrow, they just gave Frydenberg and CO just this kind of like a big stare down. And it just seemed like the half of Parliament House was just erupting in euphoria at how amazing Freudenberg had done with the budget. And the other side was just like not. [00:05:36][64.4]

Thomas Keily: [00:05:38] Yeah, I mean, so it's all very tightly stage managed. As I was saying last week, it's really a media show, first and foremost. [00:05:43][5.8]

Adam Keily: [00:05:45] Oh, it's ridiculous. Anyway, we had the budget and so I'm hoping because there's a lot in it. Obviously, you know, he kind of obliged to put a lot in a lot of it was like that, oh, there was a lot in his budget like, well, we just rocked out with one idea for the budget that we build a road over there. Very elegant budget. Yeah, well, that's good. Definitely data right there. But any other ideas for the budget now? That's all we had. We want to keep it simple. There's a lot. So I thought maybe times you might you might run us through some of the key takeaways from your perspective for the budget. Yeah, I think [00:06:24][38.8]

Thomas Keily: [00:06:24] when I was looking at the one thing that jumps out to me is that so there's a thing called my EFO, which is the Mid-Year Economic and Financial Outlook, which is MIFA, another term where that happens in October. And so it's like six months is a little sort of the budget comes down in May and in October they have like a mid-year review of where things are going. So at my Nivo, the projected budget deficit was one hundred and ninety six billion dollars, which was going to be massive for this financial year. It's now down to one hundred and sixty one billion dollars. So we've saved the thirty seven billion dollars there somewhere. And that's come about because the economy is tracking much better than we thought. Things that things are bumping along, doing really well. Unemployment benefits of that burdens come down, tax revenues going up. We've got an iron ore boom which is driving a lot of revenues into government coffers. So things are doing really well. And the budgets, the budgets, improving the budget outlook for next financial year. Twenty one, twenty two is literally unchanged. World practically unchanged, went from 108 eight billion to one hundred and six billion. So it was almost exactly the same over the forecast horizon. How to sort of. Twenty four. Twenty five percent. It's actually thirty seven billion dollars worse, right. Yeah. So what's happened is that. UBS crunched the numbers, crunched the numbers on this, there was a 100 billion dollar improvement in the budget bottom line just on improving economic conditions. So the economy doing much better than we thought, right. That gave the government an extra 100 billion dollars to work with. But what they did, what they chose to do was rather than fix the budget, rather than pay down debt, repair the budget or anything like that, they decided to spend it. So they funneled that into spending [00:08:18][113.2]

Adam Keily: [00:08:18] because they have caught a really big-spending budget. Right. Like this, just like it's like the Oprah Winfrey of budgets where just everyone gets a car, you know, [00:08:26][7.4]

Thomas Keily: [00:08:26] or something for everyone, that's for sure. Yeah, yeah, yeah. It's a big spending, but it's still, you know, even though it's thirty seven billion dollars less, this year's budget deficit is still the biggest since World War Two. So we're still talking about some really big numbers. And next year, twenty one. Twenty two at one hundred billion. That's still a really, really big deficit. That's huge. But it's a really interesting choice that rather than start the process of budget repair, rather than starting to pay down the budget deficit, they decided to keep spending and to keep ramping up spending going forward. Right. So the really interesting question is why they made that choice. Why have they done that? Now, there's a sort of a bit of talk in the financial press that Phil Lowe and Steven Kennedy. So like the head of the RBA central bank, Governor Steven Kennedy's the head of Treasury, the Treasury secretary. So they they'd like the two top ranking economic public servants in the country. Right. And they met with Josh Frydenberg and crew on a regular basis. So there's a sort of a narrative building in the media at the moment that Phil Lowe and Steven Kennedy have been in his ear and saying, look, we really want to try and get the unemployment rate down to four point something. Yeah. And that's that's that's what that's what we should be doing. That's what you guys should be doing. Phil Lowe saying we're not going to see inflation until we get unemployment down into the fours. And that's going to give us the wage pressures we need to get inflation back into the target band. So he's saying, look, we're not we can't hit our targets unless fiscal policy pulls its weight. The government spends and we get unemployment down. [00:09:59][92.9]

Adam Keily: [00:10:00] Who calls the shots there? Is that is that the RBA kind of do they normally get to kind of lean on the government to make these kinds of decisions? Or is it normally the other way around? The government leans on the RBA and says, hey, we reckon you guys should should do this way or we're going to change this policy or whatever. [00:10:17][17.4]

Thomas Keily: [00:10:19] Yeah, yeah. No, the then government's boss, the government's boss, the the RBA has statutory independence. So it gets a sort of run his own show within the limits of its mandate. But like at the end of the day, the government sets the mandate and can change the mandate. [00:10:33][14.3]

Adam Keily: [00:10:34] So, yeah, stay in your lane, RBA. Yeah. [00:10:37][2.9]

Thomas Keily: [00:10:41] Which is what you want in a democracy. Right. You don't want some institution just running its own show that's not accountable to the House of the People, which is the parliament. [00:10:48][7.6]

Adam Keily: [00:10:50] Yeah, I guess so. I mean, you know, if you're a bit boring. Yeah. [00:10:52][2.8]

Thomas Keily: [00:10:53] Well if you were in charge of the RBA, things would be different, but [00:10:56][2.1]

Adam Keily: [00:10:56] we'll be a lot different if I was in charge of the RBA, we get that road over there. [00:10:59][3.5]

Thomas Keily: [00:11:00] Yeah. So, yeah, no, there's no the load doesn't have any leverage on the Treasurer. He could just suggest this. Yeah. And hope that the hope that he listens and to listen to this narrative that's building. And I'm saying the narrative because I'm not sure I believe it. The narrative that's building is that Frydenberg has listened to Low and Kennedy and gone. You know what, guys? You're right. I get it. I want to see unemployment with a four as well. [00:11:27][27.3]

Adam Keily: [00:11:29] So supportive and [00:11:31][1.3]

Thomas Keily: [00:11:32] empathy coaching they've been [00:11:33][1.2]

Adam Keily: [00:11:33] getting here. You hear guys feel your need [00:11:37][4.1]

Thomas Keily: [00:11:38] for an unemployment rate with a four. [00:11:39][1.1]

Adam Keily: [00:11:40] Mm. [00:11:40][0.0]

Thomas Keily: [00:11:41] Yeah. Um, yeah. And so and so that's what, that's what the narrative that's being inside the AFA is running an article on this last week saying that yeah. He's had this epiphany. You know, previously he was talking about getting looking at budget repair once unemployment was comfortably below six in five somewhere. Now he's saying he wants a four. [00:12:01][20.0]

Adam Keily: [00:12:02] I was going to ask this question a bit later on. But, yeah, you've mentioned the term a few times already now, which is budget repair. What are we talking about with budget repair? Is that we're fixing the budget? [00:12:11][9.5]

Thomas Keily: [00:12:12] Yeah. Yeah, we're paying we're paying down the deficit. Paying down debt. Right. Yeah. So running more surpluses, using the surpluses to clear the debt, so to speak. Yeah. That's, that's, that's repair. That's what budget repair means in that context. [00:12:25][12.6]

Adam Keily: [00:12:26] Very good. All right, so in terms of what we were spending it on. [00:12:31][4.5]

Thomas Keily: [00:12:31] Yeah, well, it's on that. So yeah. So it may be the case. It may be the case that he's seen the light and now believes that Australia needs an unemployment rate with a four in front of it. He may be genuine about that. He may it might on. [00:12:46][15.1]

Adam Keily: [00:12:46] Why would he not want to be. Why would he? What do you mean? Do we have to be convinced? You know you know what, Josh? We need to get where we get unemployment down. I'd rather not. I'd I'd really rather [00:13:00][13.6]

Thomas Keily: [00:13:01] that I'd rather have a budget surplus at a job. Well, this is this is a thing given the choice previously, the coalition government would have said if the choice is between an unemployment rate with a foreigner and a budget surplus, we'll take the budget surplus. Ah, gotcha. OK, so previously they've been very committed to the budget surplus. They've banged on about the debt and deficits disaster. Yeah. Back in the black. Back in the black. Yeah. There was another stage moment for everyone cheering as he laid down that line [00:13:29][28.2]

Adam Keily: [00:13:32] of work like a complete sucker because I'm like regurgitating that line several years on, like like their marketing department bailout. It worked. We've got idiots who are still saying, yeah, 2021. I mean, [00:13:43][11.8]

Thomas Keily: [00:13:44] because this is what sticks. This is like, yeah. Soundbite politics, because that's that's how it works. Yeah. But given the choice previously and to prick over, the government would have said we would prefer, you know, a surplus. They definitely wouldn't have said we're willing to spend a hundred billion dollars to get unemployment down from five something to four. Something that. Right. That definitely wouldn't have happened. And so it's potential, you know, it may be the case that, you know, he's had an epiphany. He's willing to he's willing to make that trade-off. He's willing to go. Yep. I'm willing to add another hundred billion dollars to the deficit to get the unemployment rate down, which is which is kind of an mgmt kind of way of thinking. [00:14:25][41.5]

Adam Keily: [00:14:26] I was just I took away my opportunity to sound smart. I was always going to say that's because of his big-money printing machine he's got now. He doesn't have to worry about it. [00:14:34][8.1]

Thomas Keily: [00:14:34] Yeah, exactly. Exactly. Yeah. [00:14:36][1.3]

Adam Keily: [00:14:36] That's the first treasurer with a money-printing machine. You know, the easiest job in the world. [00:14:40][3.5]

Thomas Keily: [00:14:40] Yeah, yeah, yeah. Golden golden times. Mhm. Yeah. And poor Paul Wayne Swan had to labor with a head-to-head to try and at least pretend to get the budget in balance just for him is like a decade of deficits as far as the eye can see. This is not even pretending to care about the budget in anywhere anyway. [00:15:00][20.4]

Adam Keily: [00:15:01] Who else would like some money. Yeah, yeah. [00:15:03][2.2]

Thomas Keily: [00:15:06] Yeah. So yeah. So that so it may be so like there's two options. One is that there's this paradigm shift road to Damascus moment where Josh Frydenberg is gone. Yeah. You know what? Let's spend let's get unemployment right down. The deficit doesn't matter. I'm willing to spend. Let's just get make sure everyone's got jobs. Let's get wages going up, that sort of thing to that might it may be the case of that paradigm shift has taken place within the coalition. It may also be the case, and this is the other alternative is that there's just the machine printing out money and the government's gone. Gee, we've got a lot of problems. What if we just throw heaps of money at it and see what happens? [00:15:45][38.5]

Adam Keily: [00:15:47] In fairness, that if I had a money printing machine, that would literally be my answer to everything as well, you just go you go like that. And that typically is the way of the world. There's not many problems that can't be fixed by throwing lots of money at it. I mean, if you kept throwing enough at most problems that kind of go away and I mean, if that's true, you could throw money at someone else to take your problem. [00:16:12][24.8]

Thomas Keily: [00:16:14] Yeah, I think I mean, that's kind of true. But if you think that the problem is that, for example, that the coalition has deep cultural problem with its relationship to women and treatment of women, throwing money at the electorate isn't really the solution to that problem. [00:16:31][17.2]

Adam Keily: [00:16:32] No, it's probably true. It's it's a fair point. [00:16:34][2.0]

Thomas Keily: [00:16:34] And so and so this is the line of criticism that's come out about this budget is like, okay, yeah. It's a it's a big spending budget on aged care, health care, disability care, women, women specifically singled out for for money for different different things. But, well, they're all the problem areas that the government's got right now. You know, it's perceived to have a women problem is perceived to have mishandled aged care. So it seems like it's it's a it's a budget full of this is this is Labor's response is that it's full of political fixes, not not strategic policy. [00:17:06][32.1]

Adam Keily: [00:17:07] Yeah. And I'm just trying to buy its way out. [00:17:09][1.6]

Thomas Keily: [00:17:09] Yeah, yeah, yeah, yeah. And so that's why I think they're the sort of the two options and the kind of related because what the government does with the money. But you know, so this narrative that's building in the media and it wouldn't surprise me if this has been, you know, pushed by the spin doctors of the government to say, like, yet the government's had a had a realization they're now deeply committed to this four and a half percent unemployment rate. Hmm. That might just be a line that they're pushing out there to cover just a big pork barreling exercise. [00:17:40][30.8]

Adam Keily: [00:17:41] The other thing, there's an election next year as well, isn't it? [00:17:43][2.2]

Thomas Keily: [00:17:43] Or this year. Yeah, very soon. Like it's potentially the last year, the budget before the election. So it's freed up that has freed up a lot of cash to be able to spend in the run-up to an election campaign. [00:17:54][10.6]

Adam Keily: [00:18:35] Welcome back here and comedian versus economist, and we're talking the budget and the fallout from the budget, and we've heard a lot about what was in the budget from the Coalition. But, of course, Labor had their chance to reply, Thomas, to the budget on Thursday that a couple of days to digest what was in it. And they came back with their reply on Thursday. And I got to say. I didn't hear a lot about Labor's reply. I don't know if I'm looking in the wrong places in the media, but it doesn't seem as carefully constructed as and carefully stage managed, as you say, as the government's budget was. It seems like Labor is struggling for air time with their reply. is that fair? [00:19:16][41.5]

Thomas Keily: [00:19:17] Yeah, I think so. I mean, the news cycle has moved on two days. Budget's two days ago. It's old news. No one cares. Yeah, I don't [00:19:25][7.6]

Adam Keily: [00:19:27] even know what happened this morning. [00:19:28][1.1]

Thomas Keily: [00:19:30] Yeah. Now, they struggled for that. But I mean, Labor's budget reply was interesting, I think, in the sense that they just they kept it pretty tight and they said, look, we're not going to release a few alternative budgets with four alternative costings and hundreds of different projects and all of that. They just outlined a couple of key differences and focused on that, which I think is smart in in a political sense because there's no appetite for it for a big budget reply. This is like just to give us a couple of key differences. And, you know, that's as much as the public has got an appetite for. [00:20:03][33.5]

Adam Keily: [00:20:05] It reminds me, you know, if you've ever done like a group presentation thing or a group like a seminar or something. And then at the end of the seminar, they're like, all right, what I'd like to do is just go around to each person. If you can just give some thoughts on, you know, what you got out of the seminar today, what you know, what your takeaways were. And the first person gets off and I say a bunch of stuff and then it's your turn next and you just kind of get up and go, Yeah, I pretty much just bought their first guy. I said and I also liked the morning tea. That's kind of that's kind of Labor's budget reply, isn't it? They're like pretty much what Frydenberg said, but there's a couple of things that we do differently. Yeah. Which is kind of smart. Like it saves you having to, you know, try and as you say. Yeah, stand out. Yeah. And if you've got your key differences and that's really all that needs to be [00:21:01][56.3]

Thomas Keily: [00:21:01] with the first half of the reply was just a hyperlink to the original budget [00:21:06][4.9]

Adam Keily: [00:21:07] that explains the QR code that Albanese was wearing, just the first for the first 90 percent of the of our policy to scare the QR code on my shirt. Well, I guess because they had a problem. Right. So from what I saw or the the coalition's budget, as you say, was kind of very, um, coalition. And what Labor might like to do anyway. So Labor can't come out and say, well, that's a dumb idea, because that's because it makes a lot of ways it makes sense. And that's probably what they were going to spend a lot of their budget money on. So it doesn't leave you anywhere to go other than. Well, here's what here's what we do differently. Yeah. Yeah. So what would they do differently? What would they sort of what was their key, key messages. [00:21:56][49.3]

Thomas Keily: [00:21:57] This was a handful that the big one was building thirty thousand social housing homes. Right. For like affordable and key like essential worker housing. Yeah. Basically yeah. So they're going to build. Yes. Six thousand a year for the next five years. Thirty thousand homes in the next five years. Yeah. So it's pretty good. Policy was widely sort of applauded. Do you think about like we typically build 40 to 50 thousand homes a year in Australia. That's not the sort of average year. So adding, you know, five to six hours on top of that, another sort of 10 percent or so. So, yeah, that's that's significant. It's not nothing. And yet social housing has really been been gutted since the Howard Howard government really like investment in social housing and community housing has been falling. Yeah, right. So so. Yeah. So turning that around seems like a good use of money. And I think it's sort of politically it's a good sort of good differentiation point then like, well if there is all this money, surely housing our most in need is has got to be a priority, particularly as house house prices are on a tear again. So people are feeling that affordability pain point. [00:23:06][69.5]

Adam Keily: [00:23:07] Yeah, absolutely. And that's why I did a joke before about before the break about there's not many problems you can't throw money at to sort of make it go away and, you know. Things like social housing, you think we should have a crack if we've got all this money to print, then why not have a crack at, you know, throwing lots and lots of money at it, building lots and lots of houses and. [00:23:25][18.1]

Thomas Keily: [00:23:26] Yeah, I help the situation. Yeah, I think I think I think that's reasonable. Yeah. I mean, it's a hard one to argue against, particularly for sort of essential workers. Yeah. So that was sort of interesting that they're funding it through the Future Fund. So they're going to give ten billion dollars to the Future Fund to invest. [00:23:42][16.9]

Adam Keily: [00:23:43] I did hear that. What's what's the Future Fund before you get too far into it? [00:23:46][3.3]

Thomas Keily: [00:23:47] So the Future Fund was set up by Costello back in 2004. I think it was. So it's like a fund. It's a sovereign wealth fund. So it's a fund that manages money for the government, for the government to then spend on things from the proceeds, basically. [00:24:01][14.0]

Adam Keily: [00:24:01] So it's a managed fund. [00:24:03][1.2]

Thomas Keily: [00:24:03] Yeah, yeah, yeah. It manages money for on behalf of the government. [00:24:06][2.5]

Adam Keily: [00:24:06] And when you say manages money, what in invested in things and. [00:24:09][2.9]

Thomas Keily: [00:24:09] Yeah, yeah. [00:24:10][0.4]

Adam Keily: [00:24:10] Yeah. Just like any any of us would invest in an ETF or a managed fund or. Yeah. So it's just the government's Robin Hood trading account. That's what it is. That's right. Yeah. [00:24:20][10.2]

Thomas Keily: [00:24:22] Yeah. It's a bit overweight on Tesla but [00:24:24][1.7]

Adam Keily: [00:24:25] that's the idea we all know. All right. So, so they're going to use as long as it's now kind of dipping in like it sounds when you say Future Fund, to me it sounds a lot like, you know, college fund or rainy day fund or kind of like this is money we're putting away for a rainy day. We're calling it. It's a future fund because [00:24:48][22.1]

Thomas Keily: [00:24:48] it's for the future. Yeah, for the future. Um, something that was I think it I think it came out because after the sale of Telstra and the government end up with all this money that it didn't want to just sit on. So it like halved it away into a future fund to. Right. Deal with spending on stuff. But it's interesting, the Labor's policy, it seems, isn't to tap money in the Future Fund, but rather to give the Future Fund ten billion dollars. And then from the proceeds of investing that ten billion dollars, the money, the returns from those returns, then take that money and build houses for. [00:25:22][34.5]

Adam Keily: [00:25:24] Mirsky. [00:25:24][0.0]

Thomas Keily: [00:25:26] I mean, it's risky. [00:25:27][1.1]

Adam Keily: [00:25:30] Safe as houses. Well, you know all well and good for the Future Fund. You know, if it's not investing in Tesla or whatever or it's managed responsibly and it goes up, I guess I guess this is someone some smart probably in charge of that. Yeah. [00:25:47][16.8]

Thomas Keily: [00:25:47] Yeah. You know, but this is the point, right? It's a low interest rate world right now. So are they going to be able to raise enough money to to build it? And. Yeah, we'll see. We'll see. [00:25:57][10.1]

Adam Keily: [00:25:58] Uh, another word that's come up a bit that I've heard is austerity and dawned on me that among many, many words in this world, I don't really know what it means in the economic context. Mm. So when we're talking about austerity and people, you know, an austerity budget, what are we talking about? [00:26:16][18.0]

Thomas Keily: [00:26:16] Um, typically we're talking two things. One is reducing spending and the other is increasing. Taxes are probably three things actually reducing spending, increasing taxes and selling off assets. Right. To raise money. So probably the classic example from from recent times is Greece. So when through the Greek financial crisis, the eurozone got together and said, right, you guys are worth all this money, we want you guys to run an austerity budget to be able to start raising money to pay us back. So we want you to raise taxes, cut spending and sell off all the ports and other assets you have right now. [00:26:54][38.0]

Adam Keily: [00:26:55] So this is the budget. This is not an austerity budget and by any stretch. [00:26:59][3.6]

Thomas Keily: [00:26:59] No, no, no, no, definitely not. [00:27:01][1.5]

Adam Keily: [00:27:01] This is the kind of opposite. Yeah, it is. The coalition. Are they kind of have they got a track record of austerity budgets? Is that why it's being mentioned so much at the moment? [00:27:11][10.5]

Thomas Keily: [00:27:12] It's normally what you expect with a big deficit is typically and this is another this is another place where the economic orthodoxy has shifted in in the last couple of years is typically if you had big budget deficits and unsustainable debt, then you needed an austerity budget to get you back on track and right back in the black. But that's shifted now. So now we think one of one of the key lines that Feinberg's been running with is that the best way to repair the budget is to grow the economy. And if you grow the economy, then you start, then tax revenues increase welfare spending and so forth goes down. And so your budget naturally improves with with a growing economy. And this was always the criticism of austerity budgets. Is it sound like it's a short term measure, but if you sell off all your all your valuable assets and you raise taxes, which chokes economic activity and you cut support spending, which pulls money out of the economy, all of those things are a drag on growth. And and so you end up in in an austerity spiral almost, and that's sort of what Greece got stuck in Ren austerity budgets for a very long time, but really didn't took a long time to sort of get back on its feet. [00:28:27][74.8]

Adam Keily: [00:28:27] Yeah, it's like if you were, you know, for me, if I'm like, oh, I need some more money in the family budget, you just start selling the couch and you sell the TV and you sell everything. Eventually you run out of things to sell. You haven't improved your financial position, you know, because you if you're doing it to to meet your debts or whatever, it's not sustainable. You can't you can't just keep, you know, selling things off because you have to buy them again and then you're even worse off. Yeah. Once you get to the essentials. [00:28:55][28.0]

Thomas Keily: [00:28:56] Yeah, it's very much like that. Very much like that. Yeah. Thank you. [00:28:59][3.4]

Adam Keily: [00:29:02] Don't bother me. Well I'm trying to put it in language people understand. [00:29:09][6.2]

Thomas Keily: [00:29:09] Yes, you're right. You're right. You're right. But it's also, you know, it's it's a bit like I shouldn't [00:29:14][4.2]

Adam Keily: [00:29:14] shouldn't rope everyone else in the I try to put it in a language I understand, [00:29:18][3.5]

Thomas Keily: [00:29:20] but yeah, it's a bit like. Yeah, but it's also in that, you know, if you had a daughter who's earning money, you know, running a lemonade stand and then Germany comes and forces you to sell that daughter off to pay back German debts, then, you know, you've lost a productive asset. You've gone backwards. Yeah. [00:29:36][16.6]

Adam Keily: [00:29:37] See, simple, isn't that when you say in a common language that we it. All right. That just about does it for this week. But one, I just wanted to quickly cover of a story that we we talked about last week, which was the Colonial Pipeline ransomware attack. How are you? Good news. We didn't know how long it was going to be back until they were back up and running, but they are back up and running. They reportedly had to pay five million in ransom to get to get the keys to unlock all their stuff. But apparently unlocking all their stuff was running so slowly that they had to just keep restoring for backups as well. So, um, but the other good news from that, though, is that the dark side ransomware gang have announced that they're closing up shop. That was after their servers were seized and someone drained their cryptocurrency. Whoa from the account the group uses to pay their affiliate. So I know the FBI were looking into him and the CIA and whoever else. And so I suspect they they might have got them. But, uh, yeah, they they put out a thing saying, yeah, we're out of here for now. Well, actually, I mean, for now they said we're out of here. [00:30:48][70.6]

Thomas Keily: [00:30:49] What they are they releasing media releases something? Oh, yeah. [00:30:53][3.3]

Adam Keily: [00:30:53] Yeah. [00:30:53][0.0]

Thomas Keily: [00:30:54] Why? Who's monitoring what they're doing. Who cares. So they got investors [00:30:58][4.2]

Adam Keily: [00:30:59] or their business. They go, yeah, they have got investors. That's the sort of operate there like a uh. I mean not you know, they're not publicly listed but um. But now they got together. That's how they kind of get their resources. They solicit for, for people to join them or invest in them. And ransomware is a service. That's what it is. It's it's true. That's actually a thing. Um, so yeah, they that's what they do [00:31:28][29.1]

Thomas Keily: [00:31:29] is a whole world here and I don't know enough about that. I want to know more about we should do a show on us. [00:31:34][5.0]

Adam Keily: [00:31:35] Welcome to my world and the economy and economics. Mm. So yeah. Maybe we'll do another podcast. Mm hmm. But specifically about hacking and, and ransomware attacks. All right. Let's leave it there for now. Good work Thomas. I think that's enough of the budget. Yeah. This year. Let's let's talk about the budget again this time next year. I'll look forward to it. Don't forget, you can check out all the other great podcasts from equity mates. We've got get started investing equity mates investing podcast , Meet Pay Love, you're in good company, Thomas. Thanks again for your explanations and we'll see you again next week. [00:31:35][0.0]

[1708.8]