Geez we are lucky to have Wayne Swan

[Savige Silver]

Correct me if I am wrong but isn't Penny Wong Australian finance minister ?

 

[Silverthorn]

So basically you're saying Costello's solution to the GFC would have been to do exactly the same as what he did during the boom before the GFC.

A cunning plan to be sure, but I see one or two small flaws.

Well basically yes, except he would have lowered tax rates FURTHER...

So when the economy is doing well, the government should cut taxes and when the economy is doing badly, the government should cut taxes?

See, the problem with this that I alluded to earlier is that after a while, there aren't any more taxes left to cut (which is sort of what the United States is discovering at the moment).

Australia didn't need a tax cut anyway. Australia needed a massive amount of money pumped directly into the economy in the space of a few months, right before Christmas when poor trading conditions would have hammered confidence into the ground.

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

Disagree with some of this. The cash handouts where timely and useful but the home insulation scheme was a debacle, the education package less so and more useful long term. Better to have tax cuts up your sleeve to roll out during the crisis though than have the government engineer something.

 

[Big A.D.]

Better to have tax cuts up your sleeve to roll out during the crisis though than have the government engineer something.

Well, I'd agree that its good to have tax cuts up your sleeve to roll out during a slowdown.

The situation a few years ago wasn't a slowdown though. It was a full-blown crisis in global financial markets and that meant a tax cut most likely wouldn't have been enough to support the economy during that critical 4th quarter.

For example, if you divide $900 by 52 weeks, you'd get a tax cut of $17.30 per week spread out over a whole year. That's great and I certainly wouldn't say no to it but it doesn't have the same "Woohoo, free money! Let's go shopping" effect that a cheque for $900 has.

I think its dangerous to just assume that a bog standard tax cut is the best way of fixing everything. If you look at the Republicans in the United States, they just chant this tax cut mantra regardless of what the situation is.

"Congressman, I don't have health insurance".

"You need a tax cut, son".

"Senator, demand in my manufacturing business is falling".

"Hey buddy, a tax cut would fix that".

"Hey guys, our entire country is going to default on it's sovereign debt!"

"Well, if Obama let us have our tax cuts then everything would be just fine again".


I just think it's too simplistic to say tax cuts will always improve everything.

 

[hiho]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession. And now in the next two years coming we are going to pay for that reckless spending in job losses and small business failures. Keynesian economics is flawed, ask Bernanke even he's starting to realise this after rooting the US economy even further, and that was after it was thought it was totallt rooted.

 

[Big A.D.]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession.

You're kidding, right?

There were major global financial institutions collapsing in the space of hours. Share markets were tanking at a rate of 5% or more per day. Liquidity was drying up. Businesses were worrying about being able to make payroll at the end of the week. Managed funds (here) were freezing redemptions. Banks around the world were trying to prevent runs of deposits from occurring. Governments were stepping in to support them by guaranteeing those deposits.

Are you seriously suggesting we should have waited for everything to come down in a flaming heap before saying "Oh look, we're in a recession" and then tried to come up with a way of digging ourselves out of the ginormous hole we'd be sitting at the bottom of?

You're night, simply being in a recession isn't an emergency. If we were just in a recession, tax cuts would have been a good way of stimulating the economy.

Being on the edge of a depression that could last decades on the other hand is an emergency and it requires massive amounts of money pumped into the economy in a very short space of time.

 

[Silverthorn]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession. And now in the next two years coming we are going to pay for that reckless spending in job losses and small business failures. Keynesian economics is flawed, ask Bernanke even he's starting to realise this after rooting the US economy even further, and that was after it was thought it was totallt rooted.

It look to me like business was starting to struggle and a bank run was developing so the stimulus checks and bank guarantee were needed I think. Tax cuts would have also been a boost longer term. After a while it looked liked construction had tanked so the education stimulus was also very useful to stop unemployment rising. Things could've have got bad quite quickly.

 

[hawkeye]

Deleted.

what was wrong with your post? I read it

Yes, but I didn't read Jonesy's above which was basically the same.

 

[hiho]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession.

You're kidding, right?

.

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures, yes it would have been ugly for a while, but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch

 

[hiho]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession. And now in the next two years coming we are going to pay for that reckless spending in job losses and small business failures. Keynesian economics is flawed, ask Bernanke even he's starting to realise this after rooting the US economy even further, and that was after it was thought it was totallt rooted.

It look to me like business was starting to struggle and a bank run was developing so the stimulus checks and bank guarantee were needed I think. Tax cuts would have also been a boost longer term. After a while it looked liked construction had tanked so the education stimulus was also very useful to stop unemployment rising. Things could've have got bad quite quickly.

and whats happening now to business?

 

[renovator]

sorry but where was the emergency bigAD? We werent technically in a recession.

You're kidding, right?

.

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures yes it would have been ugly for a while but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch.

Well im pretty happy they papered over the cracks & kept the boat afloat for this long . So it did help even if it was for a few years thats a few years prosperity that a lot of other countries didnt have the luxury of having

 

[hiho]

You're kidding, right?

.

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures yes it would have been ugly for a while but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch.

Well im pretty happy they papered over the cracks & kept the boat afloat for this long . So it did help even if it was for a few years thats a few years prosperity that a lot of other countries didnt have the luxury of having

your only happy because of the FHOG's that artifically inflated property prices, I take it you made a killing on some sales, you owe krudd a beer or two me thinks

 

[Big A.D.]

sorry but where was the emergency bigAD? We werent technically in a recession.

You're kidding, right?

.

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures, yes it would have been ugly for a while, but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch

When you say "papering over the cracks", it's not like Wayne Swan just pushed a button and postponed an economic crash until 24/4/2014 or something. The stimulus spending allowed our economy time to adjust gradually to the new global reality of low growth.

Australians are de-leveraging. Americans just went bankrupt.

Our housing market stopped rising, growth slowed, is now at a standstill and will begin deflating. The American market just went BANG and tanked.

Those kinds of extreme changes cause very, very unpredictable things to happen and they're best avoided wherever possible. We did and we're lucky to have some breathing space to work out how to fix any structural problems in our economy. The alternative is being backed into a corner with a very limited number of options, which is exactly where the United States is right now.

 

[fishball]

So exactly which structural problems have we fixed in Australia?

Edit: I do agree that a slow path downwards is better than a crash but has anything really changed the past few years? Was that money spent in futile? Did people actually prepare for the worst? Seemed like kicking the can down the road to me, to keep the Good times rolling and wasn't much really done to address to underlying issues of the economy.

 

[Yippe-Ki-Ya]

Better to have tax cuts up your sleeve to roll out during the crisis though than have the government engineer something.

Well, I'd agree that its good to have tax cuts up your sleeve to roll out during a slowdown.

The situation a few years ago wasn't a slowdown though. It was a full-blown crisis in global financial markets and that meant a tax cut most likely wouldn't have been enough to support the economy during that critical 4th quarter.

For example, if you divide $900 by 52 weeks, you'd get a tax cut of $17.30 per week spread out over a whole year. That's great and I certainly wouldn't say no to it but it doesn't have the same "Woohoo, free money! Let's go shopping" effect that a cheque for $900 has.

I think its dangerous to just assume that a bog standard tax cut is the best way of fixing everything. If you look at the Republicans in the United States, they just chant this tax cut mantra regardless of what the situation is.

"Congressman, I don't have health insurance".

"You need a tax cut, son".

"Senator, demand in my manufacturing business is falling".

"Hey buddy, a tax cut would fix that".

"Hey guys, our entire country is going to default on it's sovereign debt!"

"Well, if Obama let us have our tax cuts then everything would be just fine again".


I just think it's too simplistic to say tax cuts will always improve everything.

You're wrong mate! TAX CUTS are exactly what's needed... the only thing the Republicans keep getting wrong is that they dont CUT SPENDING!!

which is why Ron Paul is the only man for the job who knows what the hell he's doing ...

SAVVVIE???

 

[Yippe-Ki-Ya]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession.

You're kidding, right?

There were major global financial institutions collapsing in the space of hours. Share markets were tanking at a rate of 5% or more per day. Liquidity was drying up. Businesses were worrying about being able to make payroll at the end of the week. Managed funds (here) were freezing redemptions. Banks around the world were trying to prevent runs of deposits from occurring. Governments were stepping in to support them by guaranteeing those deposits.

Are you seriously suggesting we should have waited for everything to come down in a flaming heap before saying "Oh look, we're in a recession" and then tried to come up with a way of digging ourselves out of the ginormous hole we'd be sitting at the bottom of?

You're night, simply being in a recession isn't an emergency. If we were just in a recession, tax cuts would have been a good way of stimulating the economy.

Being on the edge of a depression that could last decades on the other hand is an emergency and it requires massive amounts of money pumped into the economy in a very short space of time.

Being in a depression for decades is exactly what happens when government interferes and meddles in the free markets! I guess the dumb Fabian F..s didn't learn that lesson from the last time they tried that in the 30's...

but then again, socialists aren't exactly the smartest people around now are they!!?? :lol:

 

[Yippe-Ki-Ya]

And no, you don't do that for fun - you do it because its an emergency and you need to do it.

sorry but where was the emergency bigAD? We werent technically in a recession. And now in the next two years coming we are going to pay for that reckless spending in job losses and small business failures. Keynesian economics is flawed, ask Bernanke even he's starting to realise this after rooting the US economy even further, and that was after it was thought it was totallt rooted.

It look to me like business was starting to struggle and a bank run was developing so the stimulus checks and bank guarantee were needed I think. Tax cuts would have also been a boost longer term. After a while it looked liked construction had tanked so the education stimulus was also very useful to stop unemployment rising. Things could've have got bad quite quickly.

Stealing money from one portion of the economy and handing it out to other portions of the economy (umm as in to the construction industry for grossly overpriced construction work) simply distorts the economy and causes much more LONG TERM DAMAGE than the short term "fix" it gives...

 

[Yippe-Ki-Ya]

You're kidding, right?

.

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures yes it would have been ugly for a while but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch.

Well im pretty happy they papered over the cracks & kept the boat afloat for this long . So it did help even if it was for a few years thats a few years prosperity that a lot of other countries didnt have the luxury of having

yep - and now we have hundreds of billions of dollars of debt that we, our children and our grandchildren will end up toiling to pay for...
all to give one sector in our economy a fix!

:lol:

 

[Yippe-Ki-Ya]

You're kidding, right?

.

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures, yes it would have been ugly for a while, but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch

When you say "papering over the cracks", it's not like Wayne Swan just pushed a button and postponed an economic crash until 24/4/2014 or something. The stimulus spending allowed our economy time to adjust gradually to the new global reality of low growth.

Australians are de-leveraging. Americans just went bankrupt.

Our housing market stopped rising, growth slowed, is now at a standstill and will begin deflating. The American market just went BANG and tanked.

Those kinds of extreme changes cause very, very unpredictable things to happen and they're best avoided wherever possible. We did and we're lucky to have some breathing space to work out how to fix any structural problems in our economy. The alternative is being backed into a corner with a very limited number of options, which is exactly where the United States is right now.

LOL - that's really funny!! :lol:

 

[renovator]

NO I do not kid, Australia was not in any danger other than going into recession which is a normal process, if the world had not have introduced the flawed keynesian measures yes it would have been ugly for a while but by now we would probably been on the road to genuine recovery. All they did was paper over the cracks, history will prove this, YOU just watch.

Well im pretty happy they papered over the cracks & kept the boat afloat for this long . So it did help even if it was for a few years thats a few years prosperity that a lot of other countries didnt have the luxury of having

your only happy because of the FHOG's that artifically inflated property prices, I take it you made a killing on some sales, you owe krudd a beer or two me thinks

Yes sure i only think of myself no one else ......What sort of stupid thing is that to say?I was talking about everyone in the country that has had the opportunity to get themselves out of debt & make a few bucks & prepare for whatever is around the corner.I always sell my houses regardless. Did you know ive never sold a house to a first home buyer ? because by the time they procrastinate a more mature buyer usually snaps it up.

Personally i disagree that the FHOG has kept prices artificially inflated . The market sets the price Im not sure but if you can use your google fu & find out the amount of houses sold & the percentage bought by first home buyers i would think it was a very small amount & small percentages of anything cannot determine a market. Its like saying us stackers can have an effect on the price of silver ...Its negligable

 

[Yippe-Ki-Ya]

So exactly which structural problems have we fixed in Australia?

Edit: I do agree that a slow path downwards is better than a crash but has anything really changed the past few years? Was that money spent in futile? Did people actually prepare for the worst? Seemed like kicking the can down the road to me, to keep the Good times rolling and wasn't much really done to address to underlying issues of the economy.

yes - we now have a TON OF DEBT that will be paid for by even more government theft from private citizens...

so that their favourite special interest group could make a motza on overpriced school halls and the like ...