"Hi David and Eoin and trusting that all is well with you.

"Re CPI conspiracy theories: If John Williams thinks that the federal government has been deliberately understating significantly the level of inflation to keep increases in social security and other costs down, how does he square this with the problem of a mounting structural fiscal deficit due to welfare, healthcare and other social payments? Surely if the government has been succeeding in deceiving recipients of these payments to the extent suggested over recent years, the government's structural budgetary position would be much improved by now? Does the fiscal evidence not overwhelmingly suggest that no such deception has been perpetrated /achieved? If only it were that easy.... "

David Fuller's view Thanks, Eoin is thriving, judging from the feedback and I am enjoying emails, articles and reports from the Collective.

Beyond what I said yesterday, your questions are taking me off piste but I will share the following thoughts:

Every civilised and developed society needs and should be able to afford a social safety net for those in genuine need. However, it is difficult to get the balance right because these programmes can easily create their own demand and become a disincentive for people who should be trying to get back into work. Ballooning social services can easily bankrupt a country in an economic downturn. Also, there are plenty of other drains on the Treasury, from pork barrel programmes to expensive wars.