Australia housing bubble

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Originally Posted by prydey

I'm not an economist but how does taking away people's spending money help the economy?

Hospitality must already be stretched pretty thin. So many struggled through covid with many having to close up, and now this.

Many other industries doing it tough with people tightening up on spending.

Is interest rates really the only way to try to achieve what they want? Genuinely curious although I would guess that it's a very complex answer.

A good question, Rob. I found this to be a good read to help understand the balancing equation.

https://www.abc.net.au/news/2022-08-...vice/101327530

I recall a story on the ABC radio a few months ago, and the economist being interviewed said there was basically three or four things that could be done to help control inflation. I can't remember the detail, but basically he said all but increasing interest rates were either outside the government's control or for those controllable by the government, no government would make these choices as they would be received negatively by the voting public. As the government has no control over the RBA decisions, all governments were happy to allow the RBA to take the brunt of having to make the tough decisions.