Okay, then rephrase what I said to 'stimulus is supposed to maintain the status quo'. My further points remain unchanged. Incidentally we did suffer a stock market crash and an instant reduction in lending by the banks. Not to mention large businesses freaking out and laying off staff. But of course, it is important to get back to the status quo - all of that crash stuff is just an anomaly, a freak occurrence and nothing to do with blind speculation, rampant consumerism, debt expansion, etc (/sarcasm) I don't recall where I talked about US stimulus though. They're in a league of their own IMO. I talked of Chinese stimulus, which I believe kept the AUD high and speculative confidence in Australian industry. Of course we'll disagree on the Carbon Tax and NBN... so i'm not even going to touch that. Why is the 'parroting' nonsense? It makes perfect sense to me. It's called a business cycle. I don't believe I have said that the Govt should just let everything collapse by itself. An orderly collapse is what I would prefer. Nationalise banks, offer some Govt loans to companies that have minor cashflow issues, help out the farmers and those who work in industries that will have a competitive advantage with a lower AUD. But the point is to encourage survival of the fittest. The strong survive, the weak perish. As harsh as that sounds, that is the prescription to quickly deal with the issue of malinvestment*. There are other ways of course, slower ways that drag out the pain for longer. Doesn't really matter though, we won't ever be taking the bitter pill by choice because we lack the political environment (and memory) to do so. The entire reason we're in this turtling mess is because there are people in this world that believe that the business cycle is inconvenient and that downturns should be avoided at all costs. And as a repurcussion we get a terminal downturn instead of a head cold. *obviously there are other issues to deal with such as baseless welfare, taxation, infrastructure projects, etc. But that's outside the scope of my rant.
Yes, all of that stuff happened (including our darling mining industry laying people off at 4x the rate that other sectors were) and we've had some business failures, but nothing on the same scale as what happened in other parts of the world. And a lot of smart local operators took a reality check and started reassessing the viability their riskier projects (Twiggy Forrest obviously wasn't among them) and de-leveraging by paying down debt as opposed to defaulting and the lenders having to eat the loss. Our household savings rate has more than doubled. There was actually an article in The Age/SMH today about Australia being second only to Canada in households being ahead on their mortgages. Our property prices have topped out in the last few years and are actually down a bit when you take inflation into account. Our stimulus cushioned the blow from the GFC and since all economies are relative, we only needed to be less worse off than everyone else to be ahead and that's pretty much how it turned out. (Again just for clarity, when I say "our" stimulus I mean the kind of pre-emptive stimulus that went straight to individuals and businesses in vulnerable sectors.) If we use a chart that looks something like this: <catastrophic meltdown>-<big crash>-<orderly collapse>-<panicked restructure>-<orderly restructure>-<gradual shift>-<business as usual> ...then I'd say our post-GFC economy is somewhere between "orderly restructure" and "gradual shift". Obviously "business as usual" isn't a sensible course of action, but if it's fair to say the U.S. is a little bit closer to "big crash" than it is to "orderly collapse", I think we're in a pretty good position where we are. It isn't perfect by any means but we're not seeing people out on the streets holding "Will Work For Food" signs either. So you don't misunderstand me, I don't think the downturns in the business cycle should be avoided at all costs. I think we have governments that exist solely to make life better than it would otherwise be for the citizens it represents and if they're able to smooth out the extremes of the cycle so the highs aren't as high and the lows aren't as low, we can avoid the worst of humanity's excesses.
Perhaps medicare in the US would be easier to fund if their doctors stopped charging like Lamborghini mechanics.
^^^ said this before but unfortunately Big AD has fallen for the propoganda Oop, that was targetted at Yippe's subtle comment.
Why should they? They're simply making use of the rigged, pseduo market which the thieving government has artificially created - and will now inflate even further by forcing Americans to have private health insurance - much like the socialists here in Australia have done. You don't need to be a genius to understand that once government puts its fat ugly nose into ANY MARKET - prices are driven up exponentially. If you have a captive market - who are coerced through the threat of violence to participate in said market - then prices go up even quicker and higher! savvie??
We're obviously not going to agree. I don't even see your responses as refuting what I say at all, but you might think they do. That's okay, agree to disagree, etc. But, responding to the above - I would not use such a scale personally. That only fits the symptoms of the business cycle - fluctuating somewhere between crashing and BAU. That is what it might look like on a chart perhaps, or from inside the central planning control tower, but looking at it purely from this perspective of course the conclusion will always be "how to we avoid the recession part?". The difference is that on your scale, we could have BAU and a completely disfunctional economy, ala Japan. Are they a success? No, and they're in severely deep kaki right now (it's just not in the MSM). Likewise, you could have an economy that is functioning well and has a 'big crash', but has structural resilience and sound investment - which means it will be back on its feet quickly. A scale that would better represent what I am talking about relates to business investment and economic fragility. It would range from one end being: <a high level of malinvestment, overegulation, disproportionate and excessive taxation, convoluted legal system, increased political volatility, excessive use of debt, unsustainable growth policies> to the other end <a high level of long-term sound investment, minimal regulation, minimal taxation, clear and accessible legal system, stable government policy, minimal debt, sustainable growth> I do wonder though why I find myself arguing about a scale. Is it not obvious that our economy was and still is an unsustainable pile of crap? The very things that allowed us to be resilient, like farming and some manufacturing are now up turtle creek - meanwhile the unsustainable and volatile business of digging holes is our lifeblood? As I said before - 'Dutch Disease much?'. Or you could even try Resource Curse if you like.
I think the disturbing thing is no one is actively reminding people, especially those that are indoctrinated in government propaganda like Big A.D, is that these so called "extremes" in the business cycle are actually caused by the government and central banks in the first place. The morally criminal part about it though is that the policies that allow these extremes damage the little guy on the way up AND the way down. It's not free to "smooth" out the lows and it certainly isn't the banksters and corporations that pay for it, or at the very least are way ahead of its detrimental effects. If we had sound money the highs wouldn't be as high and the lows wouldn't be as low. Most importantly it wouldn't require an ounce of intervention from the government in either direction.
