Half right and half wrong: Rudd/Swan financial guarrantees

Comments on Peter Swan “The financial safety net we never should have had”, 8/02/2010, http://www.theaustralian.com.au/news/opinion/the-financial-safety-net-we-never-should-have-had/story-e6frg6zo-1225827616339

It seems there is a difference and should be a distinction between guarantee of deposits and guarantee of banks' other funding.

The former is to prevent potential run on banks even though they may be perfectly healthy but could not have enough cash in the case of a run on them.

The latter, though is a whole different beast and the rationale for the government to step in has been dubious at the best. That was where the Rudd government with Wayne Swan as the Treasurer have some credibility problems with economic management. They just do things without considering their costs to taxpayers with whatever excuses they may have in the context of fear by the public in the wake of the GFC.

That was how the Rudd essay came about. And that is Rudd government’s economic management credential.

We have seen quite a lot of this kind of economic management, such as NBN, school halls and libraries, etc.

Undoubtedly and unfortunately we will see more of it.