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The Reserve Bank of Australia should consider buying "zero coupon perpetual bonds" from our federal and state governments over the next two years. This is, in effect, a no-interest and non-repayable loan from the Reserve Bank to fund public works while the economy is sub-par.
It could fund a capital spending surge over two to three years for constructing social housing, schools, hospitals, roads and railways. This increase in the money supply and public spending would underpin the private sector’s recovery.
Glenn Barnes
Jonathan Chrimes