The conduct of monetary and fiscal policy since the pandemic began has no parallel in Australia’s economic history, certainly not compared to what happened during the more severe Spanish Flu a century ago.   

Back then in the dying stages of the laissez-faire era, activist macroeconomic policy was simply unheard of.  Yet economies bounced back quickly without it and the 1920s subsequently roared. 

In contrast, over the past year and a half the Reserve Bank, like its foreign counterparts, has pegged official interest rates close to zero (the lowest level ever) and via quantitative easing (government bond purchases) massively expanded the money supply, fuelling the current inequitable burst of property and share price inflation.   

Meanwhile, budget deficits and the level of public debt have soared to historical peacetime highs, with the nation’s public debt to exceed a trillion dollars within a few years.   

The Reserve Bank has pledged to keep pinning official interest...