That’s about the sum of it.
Neo-liberalism is keen on free this and free that but not
1. The price of debt. They like that kept lower than it would otherwise be so the risk takers get a free ride. Coke would be over the moon if the govt intervened in the price of fizzy drinks by forcing non drinkers to subsidise the price of the sugary gunk.
2. Keeping an economy and its production capacity defended from attacks by currency warriors armed with ‘cheap money’ boarding axes and ram engines built by off shore central banks.
The shadow board are on the money but they leave themselves open to ‘what about the children’ attacks by not explicitly explaining how an economy can easily defend itself from currency warrior attacks WITHOUT the price signal destroying madness of manipulated debt pricing.
Unfortunately, the explicit explanation involves questioning the basic model of economic management and that is still a no go zone for our fearless policy wonks.
1. Regulate unproductive capital inflows.
This will immediately put downward pressure on the exchange rate.
2. As interest rates rise, which they will as the unproductive inflows are slowed, soothe the deleveraging economy with fiscal deficits.
Not necessarily more spending – tax cuts are best. The best would be to de-pork while cutting taxes. People are more than capable of pointing money where it will do the most good for them and their families.
3. Print at least some of the deficit.
This is not an option – a deleveraging economy means a shrinking money supply. Printing is essential to limiting a deflationary bust as asset prices adjust.