Thousands, maybe tens or hundreds of thousands of hardworking people are going to go on the dole line, during an election campaign. Loads of people. And nobody's talking about it.

This week, as we prepare for the first interest rate hike in a decade to pass through the economy, let's do something radical and actually talk about inflation targeting, the policy of using mass joblessness as a tool to manage prices.

Ordinary citizens would be forgiven for thinking their government wants everyone working. It's only a few years since Prime Minister Scott Morrison told us "the best form of welfare is a job", as an excuse for not raising the former; just weeks since he told Australia his economic agenda for the next three years is "jobs, jobs, jobs (etc)".

IN OTHER NEWS:

What he didn't tell you - and Labor hasn't either by the way - is that parliament passed legislation decades ago to make sure the jobless queue is never, ever, ever empty.

Make no mistake: by raising interest rates on Tuesday, the Reserve Bank has thrown people on the street.

Now, I'm not saying the bank is engaged in some kind of evil criminal conspiracy, or that it is even doing something unusual; inflation targeting isn't rare around the world. I'm not arguing it's even doing anything wrong, or even that the policy should be abandoned.

I'm simply saying that this policy is a policy, that it could be reversed but hasn't been because of a choice by our elected governments, and that you, voting citizen reading this opinion piece, should decide one way or the other if it should be.

The Reserve Bank is an independent body, but it acts according to a mandate given it by government, which has been changed in the past and could be changed again. More on that later.

First let me explain the policy.

The logic behind inflation targeting is pretty simple: by making people buy less stuff, higher interest rates will choke out an "overheating" economy, and slow inflation, the propensity of money to gradually decline in value. To be clear, it does actually work.

The mechanism is equally simple: by laying off people, the remaining workers won't ask for a high wage rise for fear of joining them. It'll also stop lots of people buying a home and deny investment to many small businesses, slowing the economy from the other direction, too.

Hopefully, the bank thinks, it will be able to hit a target 2-3 per cent "stable" inflation rate without destroying too many thousands of hopes, dreams and lives. Hopefully.

Ultimately the bank will achieve what it calls "full employment" - a bit of a misnomer, because "full employment" in fact actually means "loads of unemployment, forever". The bank hopes joblessness will be measured in the hundreds of thousands, but hopefully less than a million. Again, hopefully.

This is all very very, long-standing economic policy, of about 30 years' standing. Crack open the Reserve Bank Act (1959) if you don't believe me, it's all there, honest.

So should we actually care this much about inflation?

Inflation is very bad if you're a creditor - like a bank or a loan shark - but great if you're a debtor like me. The value of a $500,000 mortgage will probably decline by about 5 per cent this year, which is a lot better for me personally than if it went down by 2 per cent.

As we've found recently, inflation is also disruptive and costly. It's annoying when prices go up at the grocery store. But lots of stuff is annoying. Nobody has ever starved to death because inflation was a per cent or two off target.

So upshot: care, and care a fair bit, depending on who you are.

Fun fact: inflation has been persistently below the "stable" target for years, without anyone losing their minds. Too few people in work is rarely a crisis in this country, but too many always is.

Anyway, here's another factor to consider while making up your mind about this policy.

If you do lose your job as interest rates go up, you'll be among the poorest people in the OECD.

Unemployed Australians receive about $45 to live on, per day. It's barely enough to afford three meals, let alone a house.

In return for this sub-poverty payment the jobless can be required to undertake often humiliating, usually worthless compulsory volunteer-style work - known as a "mutual obligation", the logic being they unemployed person must be unskilled, stupid or lazy and needs to be fixed.

That always struck me as an interesting approach. The government sets the economic levers so that hundreds of thousands of people can't find work - then blames them and punishes them for being unemployed.

Long story short, if you lose work as part of the government strategy for lots of people to lose work in order to cut inflation, that's a very painful sacrifice, both financially and morally. Not a moral failing, or a crime.

There are alternatives to this policy.

Australia once maintained low unemployment and inflation for decades, with joblessness averaging about 2 per cent from 1945 to 1974, before explicitly killing the policy in 1975 and burying its corpse in the 80s.

We did that by having government directly intervene into the economy, training people at publicly-owned TAFEs and universities, for free, matching workers with employers through the Commonwealth Employment Service, and using industry policy to produce manufactured goods at home in industries protected from foreign competition. There were costs to this policy, including higher prices and worse-quality materials, but perhaps it wasn't all bad.

Another alternative. In Germany, the government helps businesses to keep their staff during a downturn by spreading pain around. If a firm needs to cut its wages bill by 10 per cent, the business might cut the hours of every employee by 10 per cent, keeping everyone working. This requires strong coordination between government, business and powerful trade unions.

Australia could simply up Newstart. During the pandemic, Australia doubled welfare payments, paying unemployed people enough so they were not in poverty. It made thousands of lives better. We could just do that again. No law against it.

We could even decide we want to accept slightly higher inflation in return for less employment pain and just tell the RBA to be a bit more chilled out about price stability.

At the very least we could improve the representativeness of the Reserve Bank board. Of its nine members, other than the three statutory members, and one zoologist, the majority of five members were or are executives or directors of big corporates and suchlike.

I doubt there is a person on the body that independently determines every month how many people should lose their job to keep the economy ticking who has spent one day on Newstart. Shouldn't there be a place for the victims of inflation targeting on the body that governs it?

So, what should you personally do about this?

Dunno to be honest.

This bipartisan policy is so baked in that neither major party feels the need to say they believe in it.

It hasn't been a political issue for decades. It is treated as just part of the furniture.

There's no "more inflation, more jobs" party of government out there for you to vote for, in other words.

But it is something you could think about next time you talk to your MP.

Inflation targeting is something you could think about while casting your ballot, at least.

Next time our political leaders tell you they want everyone in work, know they're lying, at the very least.

There are laws with their name on it that say they don't.

Above all, as a bunch of suits chuck ten thousand people out of work this week, or at next month's RBA meeting or the one after that, that decision should be up for debate.

That is a policy that you should know exists, and that you should know is being implemented, and you should decide if you like it or not.

Andrew Messenger is an ACM journalist.