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    Having backed themselves into a corner — flooding the world with debt to solve a series of crises caused by debt — our leaders now are preparing to jettison almost every rule in the economics texts.

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    VIDEO 1:47

    Scott Morrison makes first home buyers election pledge


    On the one hand, they are increasingly concerned by the lack of inflation and slow wages growth undermining living standards.

    On the other, they fear the consequences of deflating the runaway asset price bubbles — in real estate, stocks and bonds — that they've blown in an unsuccessful attempt to boost wages and inflation.

    First home buyers' bounty: Gift or curse?

    Let's just take the events of the past few weeks.

    Over the weekend, Prime Minister Scott Morrison announced yet another first home buyers' scheme; for the government to go guarantor on deposits for first home buyers who haven't saved enough.

    It was an idea quickly seized upon and matched by the Opposition.

    On the surface, it sounds a laudable initiative, notwithstanding there's an election this weekend.

    But who would be the biggest beneficiaries of this largesse?

    Overwhelmingly, it would be those trying to sell property, not those looking to buy.

    While it is not as bad as the old direct cash handout, which simply transferred cash straight into sellers' pockets, this still is a policy that would pump demand.

    It would lift, or at least put a floor under sagging real estate prices right now.

    Rather than make housing more affordable, it would likely boost prices in the first home buyer segment.

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