Ian

Seriously, you are arguing for Australia to use our last remaining stimulus in a time when the economy is still expanding? If interest rates are at 1% when the bad times really arrive, what do you propose then? The argument for macro intervention is supposed to be two-sided - in good times we are supposed to build up the buffers so that they can be deployed when things turn ugly. If interest rates had been gradually raised a few years ago, we would not have built the housing bubble which we are now so concerned about preventing from popping. Unfortunately it appears that the economists of today think they can outsmart the markets, which I have absolutely no doubt will be proven to be devastatingly wrong in years to come.