I agree. There was a rap video on another thread here of an Aussie vs an American. The Aussie goes on about how the US is suffering from the GFC and that Australia didn't. I wonder if this kind of smugness/arrogance is more widespread? Because I personally don't think the stimulus did anything apart from wasting a lot of money, creating malinvestment and delaying the inevitable. It irks me when Australians use the GFC as any kind of excuse or argument (as if somehow the GFC is over?).
The only people in the world who don't support the previous stimulus spending during the GFC are the federal opposition. That's not to say they didn't do a very good job of opposing the stimulus measures but, like with the NBN roll-out, all the experts in the field who actually understand how it all works think the stimulus spending had the intended effect and was carried out very successfully.
Hi Lovey, There may be some confusion here between what is the best policy for Australia and what is the best policy as viewed by the electorate. Personally, I am against Stimulus, Education spending, Cigarette Plain packaging and Pokies reform and I don't want the government involved in anything to do with Religion, Gay marriage. (I also don't want any special treatment for religion like tax concessions). I personally, am in favour of the the Carbon Price, the Royal Commission, the NBN and the NDIS. The MRRT, for me is neither here, nor there. Those very few mining companies still pay regular company tax plus royalties. However those 10 issues I have listed have (ultimately) all played out successfully in the electorate for Labour. The Libs in particular have proven to be on the wrong side of those issues electorally (initially, they were on the right side of those issues electorally; with their opposition to the Carbon Tax, the stimulus etc). But the electorate has now moved more towards the Gillard position on all those 10 issues; even if the electorate is wrong to do so. Abbott can still scare the electorate a bit with the refugee issue, and that might be enough; remember he is still slightly ahead on the 2pp. If the NBN (ultimately) proves to be the best option economically (even if by a fluke) then that is one more issue that Abbott has electorally fallen to the wrong side. (In my opinion the NBN has always been electoral gold for the ALP because to the younger voters it displays Abbott as a luddite.) If the US implement a Carbon price (even if it is economically the wrong thing to do), it will end up being electoral gold for Julia. So, my thinking is that Abbott needs a win somewhere. He's got refugees, but he might need something else. And whatever it is.................it needs to be big (like NBN big). But I suspect he's got nuthin; so look out refugees. If you are confused by my argument then consider this. The US, deep in debt, needed a Presidential candidate to state that they were going to balance the budget by dramatically reducing government spending across the board; from Defence through to welfare. This was the best thing for the US economically. But electorally, neither candidate was willing to go there. It was seen to be electoral poison. Obama won by being seen as less likely to go to war with Iran, illegal immigrants and women (and less likely to take away "entitlements"). Julia knows what she is doing. Tony needs a policy.
The same experts who allowed the GFC to occur in the first place? The same experts who enjoy ZIRP? The same experts who keep predicting some miracle recovery that doesn't happen? What a croc. That's embarassing.
^ I think Big A.D. is referring to the construction union experts who knew that they would obtain significant benefits from the stimulus program. Intention to pass lots of cash through to your cronies with unparalleled access to Government ministers compared to any other part of the population then Intended Stimulus Effect = 100% Success
Malcom Turnbull recently spoke in Adelaide where he said that the oppositions option would be 80% as effective but achievable in 3 yrs., and that it would'nt have the massive cost blow out's that the govt. is now being forced to admit to. Now, I know he'll spruik his own sides line, but it was interesting to hear none the less.
No, actually I was referring to local economists (both academic economists like Steve Keen and "working" economists like Saul Eslake), scores of other economists from around the world, the IMF, the World Bank, our commercial banks, the RBA, the Treasury, the leaders of a number of other countries, the central banks of quite a few other countries, the foreign finance media and, well, like I said, all the other people who are actually experts in the field. Again, I'm not saying that the Liberals haven't done a very good job of opposing the stimulus spending - the fact that the experts agree that doing it saved us from a deep recession and high unemployment and people are still unhappy the money was spent proves that they've been very effective at communicating their position on the subject.
He's been coming out with some version of that story since he became the shadow minister for telecoms. The engineers have repeatedly told the Opposition that even their rough ideas for broadband policies aren't realistic - like in the original article for example - or cost effective. Or both. Reality is, unfortunately, biased against Coalition broadband policy.
Now lets provide a bit of balance. Governments of all persuasions take the heat all the time for bad decisions and rightly so and eventually they pay the price..Hit with the baseball bat! Now lets have a look at Business. 1. Ford, Holden and Toyota have been building fewer and fewer cars for years but when was the last time that any of these manufactures designed , built and sold small cars under $25k in Australia..When their base model 6 and 8's Holdens/Falcons don't sell enough and the industry is going under. What do they do..The blue/red government give them a bailout to keep going..Have they no foresight? 2. Remember the year when a blue PM promised SA that we would build our own submarine in that state to ensure that skilled workers were not lost in the manufacturing industry. So we went ahead and built our own and what a white elephant they turned out to be. Seems like Australian did not have the skills to build such a vessel..Should have tried to acquired the Golan Sub from Sweeden. 3. Free trade agreements signed up with several countries..Everyone in favor. Just think of how many $ we can make selling farm produce to other free market countries..Wait a minute NZ want to sell us apples, Canada wants to sell us pig meat. Malaysia pineapples..Remember we sold wheat to Iraq when we were at war with them! We have viable industries in all these, Why do we have to import? It's the price Stupid! Got to keep Inflation down!Down! Down! 4. Australian Banks too big to fail. Too right. Federal Reserve Bank of th USA propped two of them up during the GFC but nay a mention in MSM. 5. Milk deregulation. What a rip off..Still paying today mind you. Coles and Woolworths sell you crap milk at $1 a litre but don't look at the price of other diary products. All the diary farms that remain will be in Victoria. But wait NZ, wants a slice of the Action! 6. Remember the time when Qantas Management wanted to sell the airline to a hedge fund for $11 billion and it nearly went through. Well if it had there would be no Qantas today! Qantas sponsor the Melbourne Cup, no we will have a fly past of the Emirates airliner! 7. BHP was bailed out over 30 year ago. I wonder did they ever pay it back. Oh thats right, it was only a grant not a loan. Australian Governments both red and blue, do what they are told or else! International World Bankers and Investors decide what is best for Australians..Your vote doesn't count in these matters. All your vote decide is do you want a red or blue ass hole to pretend to lead your country with a variety of issues that they pull from the hat like a magician. Do you like my hair Tony? I like your togs! REgards Errol 43
Yep you are 100% right..In my areas there is no more ADSL connections available so you have to sign up with satellite service...My mate had to do so...Keeps dropping out all the time especially in overcast, rainy or windy whether. Give me land line any day..Can't wait for the NBN to run past my door.! Regards Errol 43 BTW. I do have ADSL!
You appear to have a strong belief that Keynesian economists actually know what they are talking about and hence know what they are doing. Which rather flies in the face of being a stacker, doesn't it?
No, because Keynesian economics, particularly counter-cyclical spending is not the same thing as permanently running a deficit throughout multiple business cycles. Our response to the GFC was a textbook example of how you're supposed to do (Keynesian) counter-cyclical spending. We did it incredibly well, given the circumstances. Plenty of other countries did too little and did it too late, but many of them were also running deficits prior to the GFC and didn't have the capacity to act the way we did because they were basically already out of cash when the whole thing began. We went from surplus to deficit where they went from deficit to even bigger deficit. In those circumstances, it's perfect acceptable to "waste" money on things like roof insulation and school halls because they're only the channels for getting money into the economy. You can actually buy your way out of an impending recession but it's important to realise that Not Being In A Recession and A-Grade Infrastructure are two separate things and you can't necessarily have both with the same money. The government took the view that Not Being In A Recession was the highest priority and subsequently doled out huge chunks of cash to people who'd spend it quickly and keep it flowing through the economy. As for being a stacker, I have other investments and businesses to keep me busy. PMs are a means to an end, not an end in themselves and I'm not going to wait around for the stars to be aligned correctly or the perfect government to be in power or a magic unicorn to come along before I have a go at doing the things I find interesting and enjoy.
I'm sorry but taking the peoples' currency through tax, churning it through government administration and returning 70% or so into targetted spending is not getting money into the economy. Taxing people less leaves that currency in the hands of the people, the owners, in the first place. The economy is you and I and the companies we buy from and sell to, trading amongst ourselves. The government just takes from that, it doesn't give back the same amount that it takes. The portion that it gives back is often wasteful and doesn't grow the economy at all. To think so is just believing in magic beans.
You obviously missed where I said Re-adjusting tax rates doesn't have an immediate effect. Giving people a $900 cheque does. The government had a relatively short period of time to do something before it would be too late for anything they did (eventually) do to have an effect. (And for what it's worth, the currency doesn't belong to people, it belongs to the RBA. It's got their name written on it and everything. That's another reason I stack money that doesn't belong to anyone except me).
In those circumstances or any circumstances. Waste is waste. And I said above the $900 cheque was really created out of inflation. "Short period of time to do something" It shouldn't have done anything!
No, you can actually see where the debt shows up in the national accounts. The opposition have mentioned the size of it a couple of times too. Do nothing = bad recession/depression and high unemployment. Plenty of other countries took a "wait and see" approach and they're still paying the price for inaction.
You can't say "Do nothing = bad recession/depression and high unemployment" for a fact - although it is treated as so by the people that want it to be so. As there is no control group, this is the equivalent of saying "Vegemite cures the flu, because I gave someone Vegemite and the flu went away". So anything we say about the stimulus is speculation. What comes into question is the economic theory behind the stimulus. One of those countries that does not belong in your 'plenty' category, is China. Chinese stimulus = cheap exports, increased requirement for resources, etc. Now, how do we know that the GFC didn't send us into recession? Because of the technicality of what a recession is - two quarters of negative growth in a row. We almost had a technical one. What impact would Chinese stimulus have on economic growth in this country? Perhaps some investment in mining/gas? Perhaps buying up our properties? Final rhetorical question - how has Australia really been faring?
The economic theory behind the stimulus is based on empirical study. Economic downturns have occurred before and they've been responded to in different ways, including counter-cyclical government deficit spending. Compared to "control groups" where the government has stayed out of things, the Keynesian model generally results in recessions being less severe. So yes, while correlation does not equal causation and you can't conclusively prove a negative, surely following the Recession Prevention Model just when it looked like a really bad recession was going to come along and only getting a small dip instead is a little bit more than a coincidence? That's the technical definition of a recession. The other (practical) definition is that the unemployment rate goes over 8% and stays there for an extended period of time. The technical definition means your economy can grow at 0.1% in one quarter, then -5% the next, then 0.1%, then -6% and you finish the year down 11% without technically ever having a recession. The United States, for practical purposes, is in a recession. They might be bumping along with almost no growth but we all know they're pretty screwed and a lot of people are out of work. Less than ideal but better than just about everyone else. "Better than everyone else" counts for more in a global economy.
I already mentioned China. Coincidence? I'm not suggesting that giving money away for people to spend at Harvey Norman, JB Hi Fi and on overseas holidays did nothing at all - but rather that there's no way to show that it was the right way to spend the money. (Moving from the technical side to the 'results' side) What exactly did they supposedly achieve with the stimulus? Like the BER? (ignoring the pink batts fiasco). There was the first home owners grant increases too. Spending to theoretically prevent change to the exact areas of the economy that needed change, not the status quo. Australia has unemployment - but the Govt just tinkers with the stats to suit them. Just like the CPI. The US does the same thing, but I guess you're probably aware of that. That is true. But... are we in a better position than we were in 2007? Are we in a position to confidently move forward with investment and growth in the economy? As much as I don't even like to talk about 'growth' (like it is some kind of religion), I think Australia is in a very risky position. We still have a massive housing/debt problem, manufacturing is being ground into the dust, farmers are getting the short end continually, our scientific and research communities have minimal support, our education system (particularly tertiary) is a mess and has been going downhill for years... the list goes on and on. And Gillard is out and about talking us up, saying we need to boost productivity and become more of a services economy. Like the last PM. And the PM before that. I'd argue that our mines seem pretty productive - they're supporting our false economy after all. So in this case, better than most other countries is only true in the present, not in the future, and only by virtue of relativity to a host of countries in crisis. How about: "I've got leprosy, but all my friends have ebola, so i'm doing better than everyone else"
