L-plate treasurer, Josh Recessionberg, has done the near impossible and crashed the miracle economy.
When he assumed the role of Treasuerer, Recessionberg made a critical misjudgement that if he follwed the Costello recipe of running surpluses, cutting taxes and stuffing in migrants then he’d force the RBA to ease, and rising house prices would boost household spending via the wealth effect.
What’s happened instead is that households have used every penny in their position to deleverage as they realise, quite rightly, that a housing boom generated at the monetary zero bound is completely insane since there is nowhere for it go but down when it stalls.
