I am not disputing Keynesian theory, it is an important tool and one Labor used correctly and very effectively during the GFC. Even now, I don't think we should be rushing into surplus, but definitely not for your reasons.

I am disputing your assertion that surpluses don't matter and answer why a government cares about it's own currency, why they don't magic up Aussie dollars and spend it on freebies for everyone.

When the economy stops growing, people stop spending.

Keynesian fiscal stimulus is not inflationary because it is countercyclical. It replaced what was missing, which is people stop spending. It would be wound back once demand comes back.

This is why I think today we should stay in deficit. Not because deficits don't matter and printing money solves everything. And we certainly shouldn't go deeper into deficit, unless it's to invest in something worthwhile.

You must make the distinction between "expansionary fiscal policy" and "deficit", they are not the same thing. Running a $100b surplus in 2007 and $10b surplus in 2008 is still inflationary stimulus, because that's an extra $90b in fiscal stimulus pumped into the economy. A better explanation, second paragraph.

US, Japan

Both very strong economies, which means their currencies have a strong backing. This does not dispute my theory.

Plus, they don't share your carefree attitude to debt, they actually care about managing it, which is why investors are still happy to buy their debt. Your "who gives a fuck" attitude reminds me of Argentina, look up their sovereign debt crisis to see how not to manage a currency.