Housing again at forefront of Australia’s economic growth, making banks happy

Miraculous. That’s how Commonwealth Bank’s boss described Australia’s economic recovery last week.

But it was a strange word to choose.

“Miraculous” can suggest a miracle has occurred, which implies the hand of God has been involved.

If we start thinking that way, we’ll forget how the economy actually recovered.

It could also make it harder to know what to do about house prices, which are surging for very human reasons. 

Fiscal policy worked

Australia’s economy is growing so strongly at the moment because of massive amounts of government spending (fiscal policy) and exceptionally low interest rates (monetary policy).

Our Commonwealth, state and territory governments spent hundreds of billions of dollars to support the economy through…