The cost-of-living crisis has made this an unusually tough year for many people as they struggle to make ends meet. It’s likely to get worse rather than better next year. The main way the Reserve Bank puts the squeeze on household spending is by engineering a rise in mortgage interest payments, leaving people with less money to spend on everything else.
What we’ve come to call the “ cost-of-living crisis ” has made this an unusually tough year for many people as they struggle to make ends meet. It’s likely to get worse rather than better next year. Which won’t help Anthony Albanese’s chances of being comfortably returned to government in early 2025. Everyone hates rapidly rising prices and demands the government do something.
But I’m not sure everyone understands the paradoxical nature of the usual ways central banks and governments go about fixing the problem. They make it worse to make it make better.In a market economy, when our demand for goods and services exceeds the economy’s ability to supply them, businesses solve the problem by putting up their prices. The economic managers then seek to weaken our demand by squeezing households’ finances so that they can’t spend as much.The main way the Reserve Bank puts the squeeze on household spending is by engineering a rise in mortgage interest payments, leaving people with less money to spend on everything els
Cost-Of-Living Crisis Rising Prices Household Finances Market Economy Reserve Bank Mortgage Interest Payments
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