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Desmond
09-02-2009, 10:04 AM
What are you going to do with the handouts?




EDIT: can an admin please change the following (I ran out of room):

Spend it on something I wouldn't have bought anyway
to
Spend it on something I would NOT have bought anyway

Garvinator
09-02-2009, 10:12 AM
All of the above.

Basil
09-02-2009, 12:16 PM
I don't know if I am receiving hand-outs! If I do, my vote(s) stand(s) :)

Capablanca-Fan
09-02-2009, 12:39 PM
I don't know if I am receiving hand-outs! If I do, my vote(s) stand(s) :)
I didn't last time, but my vote still stands too if I get any this time.

Garvinator
09-02-2009, 01:00 PM
I want a poll option: Do everything Kruddy does not want me to do just to spite him :whistle:

Garrett
09-02-2009, 01:43 PM
I missed out last time because I don't have kids.

Do you have to have kids this time ?

cheers
Garrett.

Desmond
09-02-2009, 03:35 PM
I missed out last time because I don't have kids.

Do you have to have kids this time ?

cheers
Garrett.No, you don't. If you filed a tax return last year, and your income is below 100k, you should qualify. Even if you haven't filed it yet, you can do so now and still qualify I believe.

I think there will also be handouts for parents with school aged children, but haven't payed much attention to that as it does not apply to me.

Saragossa
09-02-2009, 03:41 PM
With the kids one. Once again the government rewards the financially irresponsible.

Capablanca-Fan
09-02-2009, 05:07 PM
With the kids one. Once again the government rewards the financially irresponsible.
That's often the way. Same goes for bailing out home-owners who mortgaged way over their heads, while those muggins who stuck with more frugal homes are being forced to subsidize them. See also this post and cartoon (http://www.chesschat.org/showpost.php?p=215560&postcount=1965). ;) :cool: :whistle:

Trent Parker
09-02-2009, 05:13 PM
Not sure so have selected a few options.

Probably save it to go on holiday when my sister gets married.in Canada

Garrett
09-02-2009, 05:44 PM
maybe they should just spend the money on disaster relief in Victoria and Nth Queensland.

Rincewind
09-02-2009, 07:10 PM
With the kids one. Once again the government rewards the financially irresponsible.

Are you saying it is financially irresponsible to have children? Have you discussed this position with your parents? :P

Miranda
09-02-2009, 07:31 PM
Are you saying it is financially irresponsible to have children? Have you discussed this position with your parents? :P
No doubt they would agree!

Capablanca-Fan
09-02-2009, 07:44 PM
maybe they should just spend the money on disaster relief in Victoria and Nth Queensland.
Andrew Bolt argues something similar (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/the_stimulus_package_for_these_times/).

pax
10-02-2009, 12:58 PM
That's often the way. Same goes for bailing out home-owners who mortgaged way over their heads, while those muggins who stuck with more frugal homes are being forced to subsidize them. See also this post and cartoon (http://www.chesschat.org/showpost.php?p=215560&postcount=1965). ;) :cool: :whistle:

Which government are you talking about?

MichaelBaron
11-02-2009, 11:05 AM
My family is going use the money we are going to get to reduce repayments on our investment properties. Hopefully, others will also use the money to pay off their morgages, school fees, medical insurance etc. rather than gamble it away or spend it on partying in local nightclub.

TheJoker
11-02-2009, 12:41 PM
My family is going use the money we are going to get to reduce repayments on our investment properties. Hopefully, others will also use the money to pay off their morgages...

Doesn't paying down bank debt defeat the purpose of the stimulus package?

Bank don't exactly have a liquidity problem after the RBA measure. So giving extra money to the banks that dont need it isn't going to provide any stimulus to the economy. In essence you are working against the government. I guess that a big problem with the stimulus package you can't direct what people will do with the money once it hits their hands.

In fact gambling the money is not really an issue, since it will have the desired effect of boosting the economy, since nearly all gambling profits stay onshore and are likley to be spent locally. The only problem is the leakage back to state governments in the form of tax.

I guess alot of people won't spend the cash bonus (i.e. save the money or pay-off debts) and will then complain that the stimulus package didn't have much effect, not realising their own actions were to blame.

On the other you might consider that Australian's are already overloaded by a high level of household debt, and that long-term reduced levels of debt will allow for more consumption.

Spiny Norman
11-02-2009, 12:49 PM
That's why (I think) the government ought to be spending the money directly on projects and programs that are of long-term benefit to the country, not frittering away billions by giving it to people who won't spend (most of) it anyway.

I would have liked to see a national water infrastructure built, plus money poured in to solar energy (every home with a panel within 20 years), plus money poured in to provide every home with water tanks. Those that already have solar could have been given a cash handout. Ditto for water tanks. They could have moved the country a long way towards their CO2 targets at the same time.

Why are they being so short-sighted. Giving $950 handouts to people who already earn up to $80,000pa? Meanwhile some pensioners are living on dog food. Disgusting waste of resources.

/rant

Capablanca-Fan
11-02-2009, 12:50 PM
Doesn't paying down bank debt defeat the purpose of the stimulus package?
Not according to your fellow lefty Ian Murray, who made a good case that saving is good for the economy for two reasons.

Some people are sensible enough to realise that spending beyond our means is a major reason for this crisis, so fail to see how more of the same will help.


Bank don't exactly have a liquidity problem after the RBA measure. So giving extra money to the banks that dont need it isn't going to provide any stimulus to the economy.
Paying down debt stops the bank from taking so much of your money.


In essence you are working against the government.
Not a bad thing. The government should be working for the people, not vice versa.


I guess that a big problem with the stimulus package you can't direct what people will do with the money once it hits their hands.
Some people would like to.


I guess alot of people won't spend the cash bonus (i.e. save the money or pay-off debts) and will then complain that the stimulus package didn't have much effect, not realising their own actions were to blame.
Fine, make excuses for Chairman KRudd.


On the other you might consider that Australian's are already overloaded by a high level of household debt, and that long-term reduced levels of debt will allow for more consumption.
Exactly. And this makes business planning better as well, since they can think long-term instead of stimulus rush.

Desmond
11-02-2009, 01:03 PM
I have to admit that I am rather tempted to spend it on something tax deductible, then claim a refund back on money that I didn't earn or pay tax on anyway!

MichaelBaron
11-02-2009, 01:29 PM
Doesn't paying down bank debt defeat the purpose of the stimulus package?

Bank don't exactly have a liquidity problem after the RBA measure. So giving extra money to the banks that dont need it isn't going to provide any stimulus to the economy. In essence you are working against the government. I guess that a big problem with the stimulus package you can't direct what people will do with the money once it hits their hands.

In fact gambling the money is not really an issue, since it will have the desired effect of boosting the economy, since nearly all gambling profits stay onshore and are likley to be spent locally. The only problem is the leakage back to state governments in the form of tax.

I guess alot of people won't spend the cash bonus (i.e. save the money or pay-off debts) and will then complain that the stimulus package didn't have much effect, not realising their own actions were to blame.

On the other you might consider that Australian's are already overloaded by a high level of household debt, and that long-term reduced levels of debt will allow for more consumption.

1) People like me are actually good for the economy. You can argue that refusing to spend bonus money on trash items is not going to make the economy healthier in the short-term but long term, Australia needs more people who can take care of their financial security as opposed to being depedent on government. Therefore, any funds contributed towards one's financial security is investment into Australia's future

Capablanca-Fan
11-02-2009, 01:44 PM
... but long term, Australia needs more people who can take care of their financial security as opposed to being depedent on government. Therefore, any funds contributed towards one's financial security is investment into Australia's future
But this contradicts the aim of Leftist politicians and bureaucrats, who follow Machiavelli's advice in Il Principe (The Prince):

“A wise prince will seek means by which his subjects will always and in every possible condition of things have need of his government, and then they will always be faithful to him.”

TheJoker
11-02-2009, 01:56 PM
1) People like me are actually good for the economy. You can argue that refusing to spend bonus money on trash items is not going to make the economy healthier in the short-term but long term, Australia needs more people who can take care of their financial security as opposed to being depedent on government. Therefore, any funds contributed towards one's financial security is investment into Australia's future

Totally agree, but the stimulus package is meant as short-term injection to counter a cyclical downturn, it assumes that the long-term economic situation does not have any underlying deficiencies.

Of course there is a strong arguement that the recent high level of consumption has been fueled by credit in a unsustainable manner. This is a long-term issue and a stimulus package is not going to address this.

Ian Murray
11-02-2009, 02:05 PM
My family is going use the money we are going to get to reduce repayments on our investment properties. Hopefully, others will also use the money to pay off their morgages, school fees, medical insurance etc. rather than gamble it away or spend it on partying in local nightclub.
I'll be putting mine into my super fund, and so picking up the $1500 Govt co-contribution - using a grant to obtain another grant ;)

What my wife does with hers is her business

TheJoker
11-02-2009, 02:13 PM
Not according to your fellow lefty Ian Murray, who made a good case that saving is good for the economy for two reasons.

Some people are sensible enough to realise that spending beyond our means is a major reason for this crisis, so fail to see how more of the same will help.

I'd agree if you consider this current dowturn to be a long-term correction to level of consumption to most consumer having reached their maximum sustainable levels of debt.

However if you consider the current crisis to be a short fluctuation caused by massive write down in asset values. Then fiscal stimulus would seem appropriate.



Paying down debt stops the bank from taking so much of your money.

Such blanket statements are misleading. Often in order to increase one's income it is preferable to take on debt. A concept known a s gearing or leverage.

If the money used to pay down the debt can be invested such that it generates more money than the interest payments. For example if own has a $15,000 in cash and a $250,000 mortage but needs to purchase a car in order to have transport to get to work each day. That $15,000 would be much better spent on buying a car than paying down the mortage.

The main problem is that many people use debt to buy consumables.



Exactly. And this makes business planning better as well, since they can think long-term instead of stimulus rush.

Again it depends if you consider that the long-term economic is broken or not. It also depends if you think the economy can remain in equilibrium at lower than average levels of output, in which case stimulus is necessary to increase aggregate demand.

MichaelBaron
11-02-2009, 03:39 PM
Totally agree, but the stimulus package is meant as short-term injection to counter a cyclical downturn, it assumes that the long-term economic situation does not have any underlying deficiencies.

Of course there is a strong arguement that the recent high level of consumption has been fueled by credit in a unsustainable manner. This is a long-term issue and a stimulus package is not going to address this.

Unfortunately short-term injections are useless. If you give people fish but do not teach them how to fish it will not make much of a difference.

TheJoker
11-02-2009, 04:08 PM
Unfortunately short-term injections are useless.

I believe you are wrong here, there is a well-known economic phenomenon called the business cycle. The cyclical fluctuations can be smoothed out with short-term leakages and injections, commonly known as the automatic stabilisers. The importance of economic stability as opposed to wild fluctuations in an obvious one.

Typically, as with business, both short-term and long-term strategies are required for effective management.

The difficulty with the current crisis is assessing whether the downturn is a long-term correction due to previous unsustainable growth or a short-term cyclical fluctuaction.

If it is a long-term correction then you are right short-term injections won't help. If it's a cyclical fluctuation then at least in theory the should. The reality is it is probably a bit of both. So the stimulus package will likley help prevent an overly downward correction, but lon-term we can still expect a much slower rate of global economic growth.

Saragossa
11-02-2009, 04:13 PM
So the government are taking tax dollars and giving them back to tax payers and people already paid by tax...So congrats hard working Australians for allowing the government to boost the economy with your money by giving it back to you :P

TheJoker
11-02-2009, 04:19 PM
So the government are taking tax dollars and giving them back to tax payers and people already paid by tax...So congrats hard working Australians for allowing the government to boost the economy with your money by giving it back to you :P

Exactly take some of the money out of the economy to keep inflation in check and act as an insurance policy for the inevitable "rainy day".

Desmond
11-02-2009, 04:21 PM
So the government are taking tax dollars and giving them back to tax payers and people already paid by tax...So congrats hard working Australians for allowing the government to boost the economy with your money by giving it back to you :P
Yes except the people who earnt the most money (>100k) and paid the most tax don't get any handouts. Go figure.

Saragossa
11-02-2009, 04:26 PM
Not sure so have selected a few options.

Probably save it to go on holiday when my sister gets married.in Canada

If you spend the money outside of the country it completely destroys the point of the handout.

TheJoker
11-02-2009, 04:27 PM
Yes except the people who earnt the most money (>100k) and paid the most tax don't get any handouts. Go figure.

Yes that seems a bit unfair. I wonder whether there is any economic justification for such a decision. Possibily they have a lower marginal propensity to consume (MPC) meaning that giving them handouts will be less expansionary than giving handouts to lower income people who may have a higher MPC.

However, I doubt the policy decision had anything to with the MPC and more to do with straight-out politics.

TheJoker
11-02-2009, 04:29 PM
If you spend the money outside of the country it completely destroys the point of the handout.

I am sure he is going to fly QANTAS ;)

Garvinator
11-02-2009, 04:32 PM
If you spend the money outside of the country it completely destroys the point of the handout.
I thought this when I first read Trent's comment and laughed, thinking go Trent, but then realised that it still helps a few businesses along the way.

pax
11-02-2009, 05:44 PM
Exactly take some of the money out of the economy to keep inflation in check and act as an insurance policy for the inevitable "rainy day".

Do you mean deflation?

MichaelBaron
11-02-2009, 06:22 PM
I believe you are wrong here, there is a well-known economic phenomenon called the business cycle. The cyclical fluctuations can be smoothed out with short-term leakages and injections, commonly known as the automatic stabilisers. The importance of economic stability as opposed to wild fluctuations in an obvious one.

Typically, as with business, both short-term and long-term strategies are required for effective management.

The difficulty with the current crisis is assessing whether the downturn is a long-term correction due to previous unsustainable growth or a short-term cyclical fluctuaction.

If it is a long-term correction then you are right short-term injections won't help. If it's a cyclical fluctuation then at least in theory the should. The reality is it is probably a bit of both. So the stimulus package will likley help prevent an overly downward correction, but lon-term we can still expect a much slower rate of global economic growth.

Lets not narrate university economics text books to each other. :) I also studied economics at uni so i am a aware that short-term injections do have an impact. However, the impact is social rather than economic.

There is no major economics paper that i am aware of (please correct me if I am wrong) that suggests that short-term injections in the form of distributing funds around to citisens (as opposed to supporting selected businesses) can achieve any long-term economic results.

MichaelBaron
11-02-2009, 06:23 PM
Yes that seems a bit unfair. I wonder whether there is any economic justification for such a decision. Possibily they have a lower marginal propensity to consume (MPC) meaning that giving them handouts will be less expansionary than giving handouts to lower income people who may have a higher MPC.

However, I doubt the policy decision had anything to with the MPC and more to do with straight-out politics.

Similarly to the idea of having handouts in the first place, there is no economic justification for such a decision - but thee is a socio-economic one. :)

Capablanca-Fan
11-02-2009, 07:31 PM
Such blanket statements are misleading.
And if I spelt out caveats to everything I say, they would drown out the main point.


Often in order to increase one's income it is preferable to take on debt. A concept known as gearing or leverage.
Yes, yes, I've used it myself. Negative gearing tax deductions make it more attractive, although that should be a minor focus.


If the money used to pay down the debt can be invested such that it generates more money than the interest payments. For example if own has a $15,000 in cash and a $250,000 mortage but needs to purchase a car in order to have transport to get to work each day. That $15,000 would be much better spent on buying a car than paying down the mortage.
Also true. A good rule is not to go into debt for assets that always depreciate.


The main problem is that many people use debt to buy consumables.
Right.


Again it depends if you consider that the long-term economic is broken or not. It also depends if you think the economy can remain in equilibrium at lower than average levels of output, in which case stimulus is necessary to increase aggregate demand.
And one can argue about what stimulus is best. KRudd and Obamov want to rush their particular stimuli into law without consultation.

TheJoker
11-02-2009, 08:07 PM
Do you mean deflation?

No inflation, the more money there is in the economy the more likley there will be inflation.

Saragossa
11-02-2009, 08:14 PM
I'm still not seeing how this is putting more money into the economy. Dosen't the government have more important things to spend money on *looks over at dismal law and medical systems*.

littlesprout85
11-02-2009, 08:25 PM
aw nice,

Seems like everyones got a different opinion on this thread.

The way sprout sees it. Everyone gets 500$ just like da last stimulas.
in the last go round. That 500$ got ate right up with high gas prices and then some. :C This ones going to the same place. Its possible :|

If ur a college student with student loans good luck on getting some stimulas at all, just like last time:C

One big difference this go round is the inflation like others have stated.

So lets all go ride a bike or walk it and let are technology do the lifting while we all relax -rawr ;)

-Sprout85 :)

Kevin Bonham
11-02-2009, 08:46 PM
I don't really think of "doing something" specific with money received. It's the same if a relative gives me money for Xmas or something; that money just goes into the bank with no conscious decision to spend it on anything in particular, or to save it for any specific amount of time, but an improvement to my net financial situation all the same. Ditto for tax returns (in those rare years when the tax office gives me money back rather than the other way around).

It's probable that I'd buy some things I normally wouldn't as a result of having slightly more money however.

(We shouldn't get too carried away as this hasn't passed the Senate yet.)

(I was tempted to vote "gamble it" but Donnelly piked!)

TheJoker
11-02-2009, 10:21 PM
i am a aware that short-term injections do have an impact. However, the impact is social rather than economic.

So you dont consider the increase in comsumption that results from short-term changes to disposable income as an economic outcome:confused:



There is no major economics paper that i am aware of (please correct me if I am wrong) that suggests that short-term injections in the form of distributing funds around to citisens (as opposed to supporting selected businesses) can achieve any long-term economic results.

There are plenty, probably the most well known would be Keynes' General Theory of Employment, Interest, and Money.

But for a more recent perspective refer to Nobel Laureate Paul Krugman's


"IS FISCAL POLICY POISED FOR A COMEBACK?"
OXFORD REVIEW OF ECONOMIC POLICY, VOL. 21, NO. 4

Garvinator
11-02-2009, 10:35 PM
So you dont consider the increase in comsumption that results from short-term changes to disposable income as an economic outcome:confused:
I think the two main points here are:
1) We are talking about tax money, so it is being taken from the people to be given back to the people.
2) Instead of the money being given back to the 'average folk' in $950 amounts, it could instead be used in worthwhile projects that will generate genuine jobs and create infrastructure projects that are badly needed.

It is also certain that out of the 42billion that is allocated for government projects, quite a lot of it will be wasted because of government budget blowouts, wastage and other pieces of general government incompetency.

MichaelBaron
12-02-2009, 01:16 AM
So you dont consider the increase in comsumption that results from short-term changes to disposable income as an economic outcome:confused:




There are plenty, probably the most well known would be Keynes' General Theory of Employment, Interest, and Money.

But for a more recent perspective refer to Nobel Laureate Paul Krugman's


"IS FISCAL POLICY POISED FOR A COMEBACK?"
OXFORD REVIEW OF ECONOMIC POLICY, VOL. 21, NO. 4

1) Its Internal Funds (Tax Money) that are being "injected" not clear how it will make the economy healthier as it is not going to change its overall value.
2) I will have a look at the Krugman's article when i have a chance. Does he talk about returning tax money etc. as cash? If he talks about "giving back to the community'" (Something that Krugman is famous for) then i am afraid its not the same thing! There is a difference between enjecting money into businesses and giving it to individual in a form of cash.

Jim_Flood
12-02-2009, 05:32 AM
I have to admit that I am rather tempted to spend it on something tax deductible, then claim a refund back on money that I didn't earn or pay tax on anyway!

Provided that you meet the ATO criteria, place the money in a superannuation fund as a personal contribution and claim it as a tax deduction.

http://www.ato.gov.au/superprofessionals/content.asp?doc=/content/00120268.htm&pc=001/007/131/002/001&mnu=41762&mfp=001/006&st=&cy=1

Alternatively, buy Brisbaneconnections partially paid just for the thrill of it all and then go bankrupt.

MichaelBaron
12-02-2009, 09:00 AM
I think the two main points here are:
1) We are talking about tax money, so it is being taken from the people to be given back to the people.
2) Instead of the money being given back to the 'average folk' in $950 amounts, it could instead be used in worthwhile projects that will generate genuine jobs and create infrastructure projects that are badly needed.

.

Exactly!

TheJoker
12-02-2009, 09:47 AM
1) Its Internal Funds (Tax Money) that are being "injected" not clear how it will make the economy healthier as it is not going to change its overall value.
2) I will have a look at the Krugman's article when i have a chance. Does he talk about returning tax money etc. as cash? If he talks about "giving back to the community'" (Something that Krugman is famous for) then i am afraid its not the same thing! There is a difference between enjecting money into businesses and giving it to individual in a form of cash.

The article mentions tax rebates and other forms of government transfers.

Michael I am not sure what you are trying to say, are you suggesting that tax rebates do not increase short-term consumption? If so I can point an article that measures directly the relationship between tax cuts/rebates and consumtption.

These cash payments are not about long-term economic growth they are about smoothing out the cyclical fluctuations. That is preventing the wild boom/bust cycle, that is inevitable due to the speculative nature of markets and business in general.

Monetary policy des a similar thing by trying to stimulate investment rather than consumption, problem at the moment is that monetary policy hasn't worked well due to the banks being overly risk aversive in their lending practices.

TheJoker
12-02-2009, 09:58 AM
I think the two main points here are:
1) We are talking about tax money, so it is being taken from the people to be given back to the people.

Exactly more is taken from the people during the boom years, preventing the economy from exapnding to rapidly (especially in the case of progressive taxation). And given back during the bust years to reduce the level of recession.


2) Instead of the money being given back to the 'average folk' in $950 amounts, it could instead be used in worthwhile projects that will generate genuine jobs and create infrastructure projects that are badly needed.

Actually best to do both, cash payments have an immediate effect on the economy, infrastrucuture spending generally suffer from long delays due planning and bureaucratic processes. The cahs payments are a form of stop gap.


It is also certain that out of the 42billion that is allocated for government projects, quite a lot of it will be wasted because of government budget blowouts, wastage and other pieces of general government incompetency.

Same occurs in private business it is an inevitable part of doing business. This is generally why monetary policy has been preferrable to fiscal policy, but in this case monetary policy has not been very effective due to the increase in lender risk aversiveness.

Spiny Norman
12-02-2009, 10:57 AM
Exactly more is taken from the people during the boom years, preventing the economy from exapnding to rapidly (especially in the case of progressive taxation). And given back during the bust years to reduce the level of recession.
If that were true, they wouldn't be borrowing money to fund the stimulus. :whistle:

TheJoker
12-02-2009, 11:27 AM
If that were true, they wouldn't be borrowing money to fund the stimulus. :whistle:

Is Australia borrowing I thought they were dipping into the future fund?

As for the USA you are right the Bush Administration ran a deficit during the boom period primarily due to the pork-barrelling war efforts with the likes of Halliburton. So they need to borrow to support a stimulus package. I suspect they have some deeper long-term economic issues associated with this crisis compared to Australia and the stimulus package may only temporarily prop-up the level aggregate at unsustainable levels. I think they may been in for an inevitable long-term downward correction to theireconomy at some point down the track adn the stimulus may well on delay that rather than resolve it.

TheJoker
12-02-2009, 11:42 AM
An interesting article that supports Michael's assumption that household balance sheet consolidation in Australia will be required long-term, and that his will soften immediate consumption but lead to a stronger long-term economic position for Australian households.

http://www.businessspectator.com.au/bs.nsf/Article/WEEKEND-ECONOMIST-How-bad-will-it-get-$pd20090123-NK5ZG?OpenDocument&src=sph

So either way spending or paying down debts the cash payments should help the economy in the short-term and long-term respectively.

Spiny Norman
12-02-2009, 11:55 AM
I haven't been following it too closely. Too depressing. You may be right about the Future Fund. But I have a recollection somewhere in that rat's maze I call a brain, that Australia was arranging a $200B line of credit (debt funding) ... did I hear right?

Miranda
12-02-2009, 01:33 PM
If they really want people to spend the handouts instead of saving them, they should give them to all 11-20 year olds ;)

Saragossa
12-02-2009, 02:22 PM
Already happened. except they gave it to your parents I think but my mum was super nice and is keeping mine in her account until I move out.

Capablanca-Fan
12-02-2009, 02:30 PM
As for the USA you are right the Bush Administration ran a deficit during the boom period primarily due to the pork-barrelling war efforts with the likes of Halliburton.
Please spare us this Halliburton conspiracy nonsense. As P.J. O'Rourke said (http://www.weeklystandard.com/Content/Public/Articles/000/000/015/791jsebl.asp?pg=2):


And "bioenergy" is a fraud of John Edwards-marital-fidelity proportions. Taxpayer money composted to produce a fuel made of alcohol that is more expensive than oil, more polluting than oil, and almost as bad as oil with vermouth and an olive. But this bill passed with bipartisan majorities in both houses of Congress and was happily signed into law by President Bush. Now it's going to cost us at least $285 billion. That's about five times the gross domestic product of prewar Iraq. For what we will spend on the Farm, Nutrition and Bioenergy Act of 2008 we could have avoided the war in Iraq and simply bought a controlling interest in Saddam Hussein's country.

And Wall Street Journal columnist James Taranto said about the Porkulus and Iraq (http://online.wsj.com/article/SB123384457995552387.html):


"The so-called stimulus bill may not do much for the economy, but it's certainly stimulating a lot of laughter, as its supporters are reduced to arguing essentially that it would be irresponsible not to waste boatloads of taxpayer money. We do not exaggerate. Consider this article by Michael Hirsh of Newsweek:


'Obama's desire to begin a "post-partisan" era may have backfired. In his eagerness to accommodate Republicans and listen to their ideas over the past week, he has allowed the GOP to turn the haggling over the stimulus package into a decidedly stale, Republican-style debate over pork, waste and overspending. This makes very little economic sense when you are in a major recession that only gets worse day by day. Yes, there are still some very legitimate issues with a bill that's supposed to be "temporary" and "targeted" -- among them, large increases in permanent entitlement spending, and a paucity of tax cuts that will prompt immediate spending. Even so, Obama has allowed Congress to grow embroiled in nitpicking over efficiency when the central debate should be about whether the package is big enough. When you are dealing with a stimulus of this size, there are going to be wasteful expenditures and boondoggles. There's no way anyone can spend $800 to $900 billion quickly without waste and boondoggles. It comes with the Keynesian territory. This is an emergency; the normal rules do not apply.'

Who is this Michael Hirsh, who has elevated unrestrained spending of the people's money to a high principle? Here's his bio:


'Michael Hirsh covers international affairs for Newsweek, reporting on a range of topics from Homeland Security to postwar Iraq. He co-authored the November 3, 2003 cover story, "Bush's $87 Billion Mess," about the Iraq reconstruction plan. The issue was one of three that won the 2004 National Magazine Award for General Excellence.'

The bill for 'Bush's mess' is less than the margin of error in reckoning the cost of the 'emergency' legislation about which Hirsh now chides lawmakers for 'nitpicking over efficiency.'"

...

President Obama himself, in a Washington Post op-ed, admits that the so-called stimulus is not just about stimulating the economy in response to an emergency:


This plan is more than a prescription for short-term spending--it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care and education.
If we are really in an emergency, and "science" tells us that we need to spend money now in order to deal with it, why not just do that and deal with the long-term agenda in the long term? Is it irresponsible to question a new president who seems to be cynically using a crisis in order to grab new power and huge sums of money for the federal government? We'd say it's irresponsible not to.

Desmond
12-02-2009, 02:43 PM
Provided that you meet the ATO criteria, place the money in a superannuation fund as a personal contribution and claim it as a tax deduction.

http://www.ato.gov.au/superprofessionals/content.asp?doc=/content/00120268.htm&pc=001/007/131/002/001&mnu=41762&mfp=001/006&st=&cy=1Hmm I don't think I would qualify, if I am reading this correctly. Seems like this designed for people who earn most of their income from a source other than as an employee.

Under this condition, the amount you earn as an employee must be less than 10% of your combined assessable income and reportable fringe benefits for that income year.

TheJoker
12-02-2009, 02:50 PM
Please spare us this Halliburton conspiracy nonsense.

It's not a conspiracy, it is common knowledge that the Iraqi contracts operate on a cost plus basis. That means the more contractors spend the more profits they make.:eek: It is also well known that there was not a proper tendering process to award the contracts.

Halliburton Iraqi contracts amount to more than US$10-billion. If that's not a way of funnelling public funds inot private corporations then I don't know what is.

Miranda
12-02-2009, 03:02 PM
Already happened. except they gave it to your parents I think but my mum was super nice and is keeping mine in her account until I move out.
They gave it to our parents... who are saving it. Not putting it in *our* bank accounts so we can spend it. :)

Saragossa
12-02-2009, 03:14 PM
Yeah i can't believe how many of my friends parents just gave it straight to them but.

Desmond
12-02-2009, 03:21 PM
Yeah i can't believe how many of my friends parents just gave it straight to them but.Geez, nice parents. I hope they got a good Xmas gift.

Miranda
12-02-2009, 03:24 PM
Yeah i can't believe how many of my friends parents just gave it straight to them but.
Actually, if my parents gave me the money, I'd save it.

I hate spending money. I deliberate for a long time before I buy anything - even just a $20 tshirt takes a lot of deliberation!

Space_Dude
12-02-2009, 05:13 PM
The economic stimulus hand out is dead now just saw it on the tele... am gonna watch now why... why??

Kevin Bonham
12-02-2009, 06:49 PM
The economic stimulus hand out is dead now just saw it on the tele... am gonna watch now why... why??

It's not dead yet. The bill did not go through the Senate because the Coalition and SA Senator Nick Xenephon voted against it, but the bill will be put forward again and there will be more negotiations. It may still pass, perhaps even within days.

Xenephon wants the government to throw lots more money at fixing the Murray-Darling rivers.

Earlier the Greens and the Government had agreed a deal that would reduce the handout from $950 to $900 but increase spending on other stuff. But without the support of Xenephon that was irrelevant.

littlesprout85
12-02-2009, 06:55 PM
Not the nutshell game,

Starting to look like a shell game here stateside on the stimula that was passed today and is now heading for the prez desk for signing.

The local & state agencies have passed a budget that cuts out 1.55 billion in education & healthcare funds. All the time they are cutting the spending in the worse area's the fed is passing the $. WHY !!!!!!!!

Yes its truly a tatic for the state and local agencies to pocket the new funding and say they havent recieved any stimula this year. Or the best case point is that they will use it in the 2010 fisical yr :C

Either way the ppl of the country here are getting the worse end of the stick. Nobody on the bottom end is getting any cash flow & the big dogs on the top are getting payed while cutting the throats of the average joe all the while smiling.:wall:

-Sprout85 :)

Kevin Bonham
12-02-2009, 09:48 PM
I zapped some speculation about an early election if Xenephon votes against the bill again from my post above because a double-dissolution trigger is only possible if the same bill is rejected twice three months apart. So that won't be happening in any hurry.

Desmond
12-02-2009, 10:05 PM
Would Rudd risk it anyway? He could lose power.

MichaelBaron
12-02-2009, 10:51 PM
Actually, if my parents gave me the money, I'd save it.

I hate spending money. I deliberate for a long time before I buy anything - even just a $20 tshirt takes a lot of deliberation!
Well Done! I wish more people from your generation would treat money like you do.:clap:

CameronD
12-02-2009, 11:41 PM
Actually, if my parents gave me the money, I'd save it.

I hate spending money. I deliberate for a long time before I buy anything - even just a $20 tshirt takes a lot of deliberation!

All you have to do now is kick the chess addiction and youd have a bright future ahead of you.

ER
13-02-2009, 12:10 AM
Not only I miss out on handouts, I have to pay for them! :P

Igor_Goldenberg
13-02-2009, 08:39 AM
Not only I miss out on handouts, I have to pay for them! :P
Hear hear

Jim_Flood
13-02-2009, 08:58 AM
Not only I miss out on handouts, I have to pay for them! :P

True, and in order to repay the debt it is always a possibility that your taxes, and that of others, will increase. May not happen but just don't be surprised if it occurs.

TheJoker
13-02-2009, 09:05 AM
Not only I miss out on handouts, I have to pay for them! :P

Yeah but you do get the benefit of living in country that is well governed enough that you (and a lot of others) can have an income of over $100,000 p.a. Which is a lot better than the majority of countries in the world, so i wouldn't be complaining about the way this country is governed too much.

MichaelBaron
13-02-2009, 09:42 AM
Yeah but you do get the benefit of living in country that is well governed enough that you (and a lot of others) can have an income of over $100,000 p.a. Which is a lot better than the majority of countries in the world, so i wouldn't be complaining about the way this country is governed too much.

LOL:D

Sounds like Chinese or Russian Propaganda

Igor_Goldenberg
13-02-2009, 09:43 AM
Yeah but you do get the benefit of living in country that is well governed enough that you (and a lot of others) can have an income of over $100,000 p.a. Which is a lot better than the majority of countries in the world, so i wouldn't be complaining about the way this country is governed too much.
You got it wrong. One of the reasons we live so well is that our country is not governed as much as many others.

Basil
13-02-2009, 09:48 AM
Yeah but you do get the benefit of living in country that is well governed enough that you (and a lot of others) can have an income of over $100,000 p.a. Which is a lot better than the majority of countries in the world, so i wouldn't be complaining about the way this country is governed too much.
I think the issue is not
"woe is us - look at the over-government", but rather
"woe is us - the over-government is so unnecessary", and
"woe is us, we could be in even better shape (comparatively against whomever) without it (over-government), and actually
"despite the comparative well-being among us, some of us do actually faaaaarked up the 'aaaarsk-me-another-question' by the over-government in question".

and then for people like me and Jono, we have the bonus extra
"woe unto us coz you fools you mindlessly follow the doctrine of over-government coz you don't have a brain".

TheJoker
13-02-2009, 10:29 AM
we could be in even better shape (globally) without it.

Actually to little regulation (whether government or self-regulation) got us into this crisis in the first place.

I'd like you to point out a country that has a better quality of life than Australia due to less government.

I am not saying the process of government couldn't be improved upon. It most certainly could, in numerous areas. But that is a whole new thread all together.

I just think that those that push for a laissez-faire / minarchist approach are tipping the balance too far in the opposite direction.

MichaelBaron
13-02-2009, 11:22 AM
Actually to little regulation (whether government or self-regulation) got us into this crisis in the first place.

I'd like you to point out a country that has a better quality of life than Australia due to less government.

I am not saying the process of government couldn't be improved upon. It most certainly could, in numerous areas. But that is a whole new thread all together.

I just think that those that push for a laissez-faire / minarchist approach are tipping the balance too far in the opposite direction.

There are several issues that our economy is facing right now mainly: unlikely sustainablity and low productivity.

While governing decisions is just one of the factors behind these issues, it is certainly one of the most critical ones.

Garvinator
13-02-2009, 11:33 AM
Actually to little regulation (whether government or self-regulation) got us into this crisis in the first place. Clarification point please: Are you saying we need more regulation?


I'd like you to point out a country that has a better quality of life than Australia due to less government.I would argue that our better quality of life has little to do with our government per se. It is also very subjective to define what is a better quality of life or what makes a better country.


I am not saying the process of government couldn't be improved upon. It most certainly could, in numerous areas. But that is a whole new thread all together. Perhaps a new thread, but is also tied into this thread and some of us are saying that this economic package will do very little and may very well indeed make things worse in the long run, so we are debating the logic and fundamentals of thought behind the idea of the economic stimulus handout.


I just think that those that push for a laissez-faire / minarchist approach are tipping the balance too far in the opposite direction.
I think most people who have a clue about what they are talking about do not really mean an open slather approach, but more of an approach of smart regulation, not more regulation. And most importantly, that the regulations are actually enforced on all, so all players actually have to play by the rules.

Capablanca-Fan
13-02-2009, 11:56 AM
Actually to little regulation (whether government or self-regulation) got us into this crisis in the first place.
Good grief, Joke's blind "in big government we trust" faith has to ignore the huge amounts of regulation already in America. Econmist Dr George Reisman points out in The Myth that Laissez Faire Is Responsible for Our Financial Crisis (http://georgereisman.com/blog/2008/10/myth-that-laissez-faire-is-responsible.html):


Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country. This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted “bailouts.” What this means is that substantially more than forty dollars of every one hundred dollars of output are appropriated by the government against the will of the individual citizens who produce that output.

...

Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country. This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted “bailouts.” What this means is that substantially more than forty dollars of every one hundred dollars of output are appropriated by the government against the will of the individual citizens who produce that output.

...

The economic interference of today’s cabinet departments is reinforced and amplified by more than one hundred federal agencies and commissions, the most well-known of which include, besides the IRS, the FRB and FDIC, the FBI and CIA, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA.

...

To complete this catalog of government interference and its trampling of any vestige of laissez faire, as of the end of 2007, the last full year for which data are available, the Federal Register contained fully seventy-three thousand pages of detailed government regulations. This is an increase of more than ten thousand pages since 1978, the very years during which our system, according to one of The New York Times articles quoted above, has been “tilted in favor of business deregulation and against new rules.”

...

And, of course, to all of this must be added the further massive apparatus of laws, departments, agencies, and regulations at the state and local level.

...

What this brief account has shown is that the politico-economic system of the United States today is so far removed from laissez-faire capitalism that it is closer to the system of a police state than to laissez-faire capitalism. The ability of the media to ignore all of the massive government interference that exists today and to characterize our present economic system as one of laissez-faire and economic freedom marks it as, if not profoundly dishonest, then as nothing less than delusional.

...


I'd like you to point out a country that has a better quality of life than Australia due to less government.
As Tony Abbott said (http://www.theaustralian.news.com.au/story/0,25197,25017669-28737,00.html) (and KB agreed):


It is logically impossible to contend that Australia has been in the grip of a 30-year mania for de-regulation and, in the same week, to claim that our regulatory systems are the equal of the best in the world. It is logically impossible to claim that the Howard government was consumed by free-market fundamentalism yet to laud the institutional framework that the former government created; unless, of course, Rudd is making the implicit claim that Australia's financial and regulatory system has been transformed in just 12 months. Perhaps, deep down, he really does think that he has performed the governmental version of the miracle at Cana.


I am not saying the process of government couldn't be improved upon. It most certainly could, in numerous areas. But that is a whole new thread all together.
Yes, as Abbott said:


If social democratic parties are uniquely gifted to understand the present problems and how to solve them, why, after 11 years of "third way" Labour government, is Britain the advanced economy most exposed to the slump?


I just think that those that push for a laissez-faire / minarchist approach are tipping the balance too far in the opposite direction.
More likely, it would be good to try it for a change.

TheJoker
13-02-2009, 12:49 PM
Clarification point please: Are you saying we need more regulation?

It's already happening in the form of self-regulation by the banking sector who are no being far more strigent on who they offer credit. I don't think it is even a question as to whether more regulation was required just whether that regulation should be self-imposed or government imposed.



I would argue that our better quality of life has little to do with our government per se. It is also very subjective to define what is a better quality of life or what makes a better country?

What would you put it down to then. Poor governance (e.g. corruption) is certainly a factor causing some resource rich countries to have a low standard of living.


Perhaps a new thread, but is also tied into this thread and some of us are saying that this economic package will do very little and may very well indeed make things worse in the long run, so we are debating the logic and fundamentals of thought behind the idea of the economic stimulus handout.

Well there is certainly logic and fundamentals behind the stimulus package, doesn't mean you have to agree with that logic or fundamentals.



I think most people who have a clue about what they are talking about do not really mean an open slather approach, but more of an approach of smart regulation, not more regulation. And most importantly, that the regulations are actually enforced on all, so all players actually have to play by the rules.

Agreed, modern governments are trying to move away directive based regulation, towards a more consensus based model where all the stakeholders are involved in the decision making process, admittedly it is a slow process of change. Particularly considering the bureaupathic nature of most public servants.

TheJoker
13-02-2009, 01:01 PM
Good grief, Joke's blind "in big government we trust" faith has to ignore the huge amounts of regulation already in America. Econmist Dr George Reisman points out in The Myth that Laissez Faire Is Responsible for Our Financial Crisis:.

Firstly there is no myth that poor lending standards caused the crisis. Secondly I never said it was necessary for the government to introduce regulations to protect against this. The financial institutions seem to be doing of good job of this themselves since the crisis (some word argue that they being overly stringent).

That article says absolutely nothing specific about what caused the crisis, which was undoubtly at least partial due to market failures due to asymmetries of information.



As Tony Abbott said (http://www.theaustralian.news.com.au/story/0,25197,25017669-28737,00.html) (and KB agreed):


It is logically impossible to contend that Australia has been in the grip of a 30-year mania for de-regulation and, in the same week, to claim that our regulatory systems are the equal of the best in the world. It is logically impossible to claim that the Howard government was consumed by free-market fundamentalism yet to laud the institutional framework that the former government created; unless, of course, Rudd is making the implicit claim that Australia's financial and regulatory system has been transformed in just 12 months. Perhaps, deep down, he really does think that he has performed the governmental version of the miracle at Cana.
.

It think the claim is that we have had sensible de-regulation in this country, we have managed to get the balance right in most areas. I never thought that the Howard gvoernment pushed for an extreme sort of de-regulation except for Work Choices.


More likely, it would be good to try it for a change.

No problems as long as it is a slow incremental change, and when things don't work well they are rolled back, rather than blindly following a particular ideology (NB same applies to left wing ideologies).

TheJoker
13-02-2009, 01:21 PM
There are several issues that our economy is facing right now mainly: unlikely sustainablity and low productivity.

While governing decisions is just one of the factors behind these issues, it is certainly one of the most critical ones.

No doubt, in the issue of unsustainability if you are reffering household debt level and the need to repair household balance sheets in order to ensure future sustainability, I'd agree especially since we are tracking right behind the US model.

As for labour productivity we are fairly middle of the road for an OECD country

GDP per Hour worked

1. Luxembourg
2. Norway
3. Belgium
4. Ireland
5. Netherlands
6. France
7. United States
8. Germany
9. Sweden
10. Denmark
11. Australia
12. Austria
13. Finland
14. Canada
15. United Kingdom
16. Switzerland
17. Spain
18. Italy
19. Iceland
20. Japan
21. New Zealand

Basil
13-02-2009, 02:18 PM
Actually to little regulation (whether government or self-regulation) got us into this crisis in the first place.

Not the point.
I'm talking generally about fatuous, bloated, big-spending, over-regulating, Rudd-Festivus, Laba Big Brotha government.
You're talking specifically about one or two regs for one industry sector.


I'd like you to point out a country that has a better quality of life than Australia due to less government.
Not the point. I'm talking about Australia being in a good starting position and being generally healthy but about to become worse than it should be because of fatuous, bloated, big-spending, over-regulating, Rudd-Festivus, Laba Big Brotha government.

You're trying to ignore what I'm complaining of and introducing a third fighter.

MichaelBaron
13-02-2009, 02:51 PM
No doubt, in the issue of unsustainability if you are reffering household debt level and the need to repair household balance sheets in order to ensure future sustainability, I'd agree especially since we are tracking right behind the US model.

As for labour productivity we are fairly middle of the road for an OECD country

GDP per Hour worked

1. Luxembourg
2. Norway
3. Belgium
4. Ireland
5. Netherlands
6. France
7. United States
8. Germany
9. Sweden
10. Denmark
11. Australia
12. Austria
13. Finland
14. Canada
15. United Kingdom
16. Switzerland
17. Spain
18. Italy
19. Iceland
20. Japan
21. New Zealand

As far as rememeber, last time i was looking at the map...were were in Asia Pacific region. Therefore, Asia is currently (and potentially) our major market/competitor. EU productivity is not relevant. As for Japan, lets compare capital investment levels as well as the Technology component :)

TheJoker
13-02-2009, 03:04 PM
Not the point. I'm talking about fatuous, bloated, big-spending, over-regulating, Rudd-Festivus, Laba Big Brotha government. You're talking about one or two regs for one sector.


Not the point. I'm talking about Australia being in a good starting position and being generally healthy but about to become worse than it should be because of fatuous, bloated, big-spending, over-regulating, Rudd-Festivus, Laba Big Brotha government.

You're trying to ignore what I'm complaining of introducing a third fighter.

Firstly the government government is not over spending according to what the IMF considers to be reasonble amount of fiscal stimulus required given the economic climate. In fact the stimulus package (in-terms of actual amount) is what might be expected from a conservative government.

Do you want to give some examples of the "over-regulation" otherwise it is pretty hard to agree or disagree. However I do agree with you that the current state of regulation is hardly cause for major economic concern, one would be hard pressed to call it stiffling, except in various small pockets. Again that doesn't discount the need for continual improvement which could include both increasing or decreasing regulation in various areas to achieve better outcomes. BTW do you still object to government regulation that has broad industry and public support?

You might also consider giving some examples of what you consider unwarranted Totalitarian behaviour from the Rudd government. that way I'll be able to see if I agree with you that there is some danger of the government turing to a "Big Brother" approach.

I don't expect this government to make any radical changes to the status quo, regardless of what is said in speeches or essays, it just doesn't make political sense to do so. So far they been fairly conservative IMO.

Desmond
13-02-2009, 03:11 PM
Senate approves $42b stimulus package (http://news.ninemsn.com.au/national/751546/new-stimulus-package-goes-to-senate)


The Rudd government has pushed its $42 billion economic stimulus package through the parliament after striking a series of compromise deals with seven crossbench senators.

Labor secured the crucial vote of independent Nick Xenophon to pass the legislation in the Senate after agreeing to a package of compromise measures to help rescue the parched Murray-Darling Basin.

The coalition, which opposed the stimulus package, painted the passage of the bills as a tragedy for the Australian economy.

Opposition Senate leader Nick Minchin, a former finance minister, told the Senate it was a tragedy that the strong economy the coalition had gifted Labor was being turned around so rapidly.

"It is a panic reaction, it is not consistent with the economic management of this country," he said.

Senator Xenophon had used his make-or-break vote to torpedo the original package of bills in the Senate on Thursday after voting with the coalition.

But the government immediately reintroduced amended legislation, pushing it through the House of Representatives on Thursday night and bringing it back before the Senate on Friday morning.

There were jovial cheers in the chamber as the crossbench senators moved to vote with the government, passing the legislation 30 votes to 28.

TheJoker
13-02-2009, 03:16 PM
As far as rememeber, last time i was looking at the map...were were in Asia Pacific region. Therefore, Asia is currently (and potentially) our major market/competitor. EU productivity is not relevant. As for Japan, lets compare capital investment levels as well as the Technology component :)

Please feel free to offer an alternate set of stats the OECD ranking were just pulled from a previous post on another thread.

Here is another set from wiki (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_hour_worked) admittedly it doesn't include China but has Hong Kong and Singapore

Capablanca-Fan
13-02-2009, 05:42 PM
Senate approves $42b stimulus package (http://news.ninemsn.com.au/national/751546/new-stimulus-package-goes-to-senate)
The Opposition had nothing to lose. If this the economy manages to recover despite this Porkulus (with still more pork for the Greenstapo senators and that Xenophon person), Layba would get all the credit anyway even if Opposition had supported it. But if we have a repeat of the Depression* where the spending doesn't help employment but lands us in more debt, the Opposition can say, "told you so".


*In May 1939, Treasury Secretary Henry J. Morgenthau Jr., one of Franklin Roosevelt's best friends, testified (http://mises.org/misesreview_detail.aspx?control=347)before the House Ways and Means Committee: “I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot” (p. 2). When he spoke, unemployment exceeded 20 percent.

Basil
13-02-2009, 06:07 PM
Firstly the government government is not over spending according to what the IMF considers to be reasonble amount of fiscal stimulus required given the economic climate.
Really? I didn't kow that. The IMF giving advice to Australia - I should read up.


Do you want to give some examples of the "over-regulation" otherwise it is pretty hard to agree or disagree.
I'd love to. I can't. The bloke's only been here 12 months. That first year was spent on gesture politics, flying around, talking sweet to the indigenous (little action) hundred failed "watch" programs. I was getting in (perhaps unfairly) early as I'd bet my bottom dollar he'll be well at it - enforcing his entrenched ideology.

One of the biggest hoodwinks of the Rudd election preamble (and there were a few) was selling the electorate on the idea of fresh think as well as painting the Libs as old and crusty. The reality is quite the opposite. Rudd's ideas are old - largely discarded - but beaming new to the young and or clueless who fell in love with the control-freaked Milky Bar Kid.


BTW do you still object to government regulation that has broad industry and public support?
It would have to be on a case by case basis, but in principle if the community wants it, then I generally support it, even if I disagree with it. The present government's very tenure is a good case in point.


I don't expect this government to make any radical changes to the status quo, regardless of what is said in speeches or essays, it just doesn't make political sense to do so.
And this will the interesing thing. I believe Kevin Rudd is one of the most egotistical megalamaniacal people I've seen in politics - and that includes many of the yank offerings. There will indeed a struggle between his quest for footprint-for-the-annals vs political astuteness reagrding his personal image conservation. I guess it will come down to how early, if at all, he is convinced that his ideals are pathetic.

MichaelBaron
13-02-2009, 06:49 PM
Please feel free to offer an alternate set of stats the OECD ranking were just pulled from a previous post on another thread.

Here is another set from wiki (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_hour_worked) admittedly it doesn't include China but has Hong Kong and Singapore


I do not have time to search for stats but let me take a guess, both productivity and cost of labour is significantly lower in Australia than in China, India etc....
Of course you may say that these are developing/undeveloped country. However, as a developed country - we are supposed to be able to invest significantly into lesser developed economies and expoloit their lower costs rather than suffer from them. From what i can see, its not happening. Furthermore, government allocates significant funds towards social programs but lesser funds towards commercial development of the economy.

Capablanca-Fan
17-02-2009, 12:52 PM
Bradley Schiller, economics professor at the University of Nevada, Reno (http://online.wsj.com/article/SB123457303244386495.html):


President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package…

This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don’t come close to those of the 1930s… The Congressional Budget Office projects a GDP decline of 2% in 2009. That’s comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%…

Mr. Obama’s analogies to the Great Depression are not only historically inaccurate, they’re also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren’t likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup.
Stanford Unviersity’s Professor John Taylor (http://www.abc.net.au/lateline/content/2008/s2493046.htm):


But what I do know is what I’ve seen here over many years and it ["stimulus"] doesn’t have really any affect. Even if it has some effect, it’s very small. So, you can’t count on it to really jumpstart the economy. You know, go back to the United States again: we had a huge stimulus package last year. Cheques were paid out in May, June and July, August and consumption — in fact consumption has fallen since then… The decline kept going.

... I think permanent tax cuts, then people can recognise that not only this year, this month, but next month, next year and for the foreseeable future, that their taxes bill will be lower. That’s gonna affect their expectations of income for a number of years, and it’s gonna get their consumption rising again by a much larger amount than the one-time payments will. ...

.... I think that if you look in the United States and other countries where this particular crisis first began to be seen, in each case, you can see there’s government excesses. In the United States, very easy monetary policy got the housing boom going which caused a bust. If you look at other countries, some countries in Europe like Spain and Ireland, the same kind of story holds, then you see the initial reaction, which was a lot of government intervention. It prolonged the crisis and ultimately has made it worse. So my reading of this crisis is that it’s the government actions and interventions that caused it, prolonged it and made it worse.

Dominic Lawson (http://www.timesonline.co.uk/tol/comment/columnists/dominic_lawson/article5733858.ece):


Obama is backing the most primitive interpretation of Keynes’s theories: that any form of government spending amounts to an economic stimulus. He is almost blind to supply-side economics, which suggests that if you want to encourage profitable job creation, you should concentrate on reducing companies’ payroll taxes — and then leave individual businesses to decide how best to employ the funds released.

Capablanca-Fan
19-02-2009, 09:06 AM
Obama's Stimulus Creates Useless Jobs (http://townhall.com/Columnists/BenShapiro/2009/02/18/obamas_stimulus_creates_useless_jobs)
by Ben Shapiro
18 Feb 09


When politicians embrace government make jobs programs, they demonstrate a fundamental misunderstanding of the role of employment in the economy. The goal of a thriving economy isnt full employment — its raising the standard of living. Employment rate means nothing if the jobs it measures do not create wealth for the economy. During the Great Depression (1930-1940), the United States had an average unemployment rate of almost 18 percent; the USSR, by contrast, had full employment. And yet when the Oscar-nominated movie The Grapes of Wrath, chronicling the Great Depression, premiered in 1941, the USSR banned the movie for the simple reason that the poverty-stricken Joads owned a car — a luxury virtually no Soviet outside the government enjoyed. Full employment did not breed prosperity.

Thats because not all jobs are created equal. Valuable jobs provide products and services the free market supports; useless jobs provide products and services the free market would not support. Valuable jobs provide products and services that enrich quality of life, making it cheaper to live better; useless jobs provide products and services that have minor impact on quality of life.

Heres the magic of private sector jobs. Imagine Bill owns a fruit stand. He sells his fruit for $2 per pound. Herman sees that Bill is doing well, and decides to open a fruit stand of his own. He figures he can undercut Bill and live on less of a profit margin, so he sells his fruit at $1 per pound. Pretty soon, Herman runs Bill out of business. Its tough for Bill. But meanwhile, customers are spending $1 less for their fruit than they were. Theyre spending that extra money at Bobs clothing store, keeping Bob employed — and Bob can now hire Bill. The bottom line is this: The power of free enterprise creates competition that raises production, lowers prices, and makes lives better for consumers and producers. And thats true even if employment declines in the fruit stand business.

Capablanca-Fan
20-02-2009, 09:17 AM
Frédéric Bastiat's 1850 Essay What Is Seen and What Is Not Seen (http://www.econlib.org/library/Bastiat/basEss1.html) showed up the fallacy of much leftist socialist policy by pointing out how the unseen costs outweigh the seen benefits.

See the section on Thrift v Luxury, which backs up Ian Murray's contention that saving is good for the economy:

Ten years have gone by. What has become of [big-spender] Mondor and his fortune and his great popularity? It has all vanished. Mondor is ruined; far from pouring fifty thousands francs into the economy every year, he is probably a public charge. In any case he is no longer the joy of the shopkeepers; he is no longer considered a promoter of the arts and of industry; he is no longer any good to the workers, nor to his descendants, whom he leaves in distress.

At the end of the same ten years [frugal saver] Ariste not only continues to put all of his income into circulation, but he contributes increasing income from year to year. He adds to the national capital, that is to say, the funds that provide wages; and since the demand for workers depends on the extent of these funds, he contributes to the progressive increase of remuneration of the working class. Should he die, he will leave children who will replace him in this work of progress and civilization.

Morally, the superiority of thrift over luxury is incontestable. It is consoling to think that, from the economic point of view, it has the same superiority for whoever, not stopping at the immediate effects of things, can push his investigations to their ultimate effects

Capablanca-Fan
21-02-2009, 12:09 AM
Rudd’s bandwagon on a roll (http://www.ipa.org.au/news/1804/rudd-s-bandwagon-on-a-roll)
John Roskam
Australian Financial Review, 20 February 2009

Pathetic is the only description that can be applied to the behaviour in recent weeks of Australia's economics profession, business organisations, and the media.

Witnessing the reaction of these groups to the federal government's $42 billion stimulus package, it is impossible to avoid feeling anything other than a mixture of pity, sadness, and contempt.

It's a pity that the country's economists, corporate leaders and journalists have been reduced to little more than cheerleaders for the government. It's sad that we've come to this. And there's something a little bit contemptible about the whole thing.

Given the way the country's policy elites have rushed to embrace more government intervention in the economy, more government spending and more government debt, it's as if the 1980s never happened. And what was the point of the recession we had to have if we have forgotten its lessons?

At least in America, the economics profession was willing to engage in some sort of debate about President Barack Obama's stimulus package.

...

The media's main interest was in reproducing the views of everyone who supported the stimulus package. There wasn't too much analysis of what the package contained. The media reported that the Treasury Department endorsed the package as if it were news. Given that Treasury wrote the package it's hardly surprising that Treasury would endorse it. This country's press, which prides itself on its willingness to probe and question (and sometimes even harass) anyone in authority, seems content to accept as holy writ the pronouncements of the secretary of the Treasury.

...

The business lobby stopped supporting the free market years ago. Credit must go to the new shadow treasurer, Joe Hockey, who started in the job this week by declaring the obvious truth that ‘‘the [free] market has made every Australian richer than they have ever been - even with this economic downturn''. It's impossible to recall any business leader who in recent months has come close to saying anything like this.

...

Capablanca-Fan
24-02-2009, 09:50 PM
Rudd must get radical (http://www.theaustralian.news.com.au/story/0,25197,25096788-7583,00.html)
Michael Stutchbury, Economics editor |
The Australian, 24 February 2009

...

Australia mistook the surge in iron ore and coal prices for a permanent increase in national income, which provided the misplaced confidence to spend up and borrow big. The bursting of this bubble has yet to fully hit Queensland and Australia because the boom-time contract prices for iron and coal exports run until April.

That's when the commodity price collapse will spread from the wealthy, who have been hit by margin loans on borrowed shares, to the mass of voters, who increasingly will show up on Bligh's jobless scrap heap, even if their mortgage repayments have fallen.

By then it will be clear Australia is already in recession. Kevin Rudd's strategy of using budget borrowing to stimulate demand will run into the excess of government debt hitting stressed global capital markets. The Reserve Bank's pre-emptive interest rate cuts will run into the limit set by the need to attract foreign capital. This should create an urgency to genuinely get ahead of the policy curve. There are several obvious options.

* Shelve the looming windback of labour market deregulation. As unemployment rises towards 7 per cent, it is against workers' interests for governments to it make less attractive for business to hire them. The risk that small business will be more exposed to unfair dismissal rules could even provoke needless pre-emptive lay-offs.

* Call an end to more taxpayer-funded entitlements. Tony Abbott is right that the budget cannot afford the increase in the government aged pension that Rudd promised as part of the supposedly temporary pre-Christmas budget handout.

The world has given Australia a pay cut. It is dangerous to borrow more to finance consumption and budget handouts.

* Maintain tax cuts. As predicted, the budget squeeze is producing calls to ditch the modest tax cuts scheduled from the start of the next two financial years. But we need to sharpen incentives to work and save, not blunt them.

Australia won't recover from the crisis by increasing taxation to fund an excess of middle-class welfare entrenched during the boom.

* Postpone the carbon impost. The Rudd Government already has shown the wobbles on this, which will encourage everyone else to shake harder against a trading scheme design that, in any case, needs a rethink. When banks aren't lending and industrial capacity is being junked is the wrong time to tax Australia's advantage in fossil fuels.

* Welcome Chinese investment. Just as Beijing continues to keep the US economy afloat by purchasing Treasury notes, Australia needs China to finance our external deficit, even if it means selling off the farm at the bottom of the cycle. Attracting foreign equity in productive capacity is better than budget borrowing to fund consumption or artificial job creation. This from the crisis relatively stronger. could be to Australia's extra advantage given that China will likely emerge

...

littlesprout85
25-02-2009, 11:36 PM
Aw Crikey !

Sprout just found out that there isnt going to be any stimulas checks being handed out stateside :C

After further digging into this touchy subject meh have found that they are going to take 10$ less outta da paychecks in taxes.

Yea right, meh sure this isnt going to happen. This idea cannot support itself in principle due to the lack of income it generates, definatly not enough to stay afloat long.

The Problem today is that local,state,and fed arent collecting enough taxes to keep the whole thing afloat. The Last Thing WE NEED is Another Tax Cut- :wall:

-Sprout85 :)

Spiny Norman
26-02-2009, 05:54 AM
The world has given Australia a pay cut. It is dangerous to borrow more to finance consumption and budget handouts.

That's the guts of it right there folks. What kind of idiots would borrow to support a lifestyle after getting a substantial pay cut? Real people generally don't behave that way. Why should our government? We need to wind back our lifestyles a little and wait for the world to give us a pay rise again.

That would be the prudent thing to do.

Capablanca-Fan
26-02-2009, 07:01 PM
“You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.” Dr Adrian Rogers (1931–2005):

Mokum
27-02-2009, 05:08 PM
"I feel slavery is a much maligned institution. If we had slavery today we would not have such a welfare problem." Dr Adrian Rogers (1931–2005)

ElevatorEscapee
27-02-2009, 05:39 PM
Apparently the Roman Empire had all the technology available to build steam engines... but they didn't do so because they didn't need to; they had enough slaves to do all the work for them.

Capablanca-Fan
28-02-2009, 10:12 PM
"I feel slavery is a much maligned institution. If we had slavery today we would not have such a welfare problem." Dr Adrian Rogers (1931–2005)
Welfare as we have it now is a form of slavery, which at its base is forcing some people to work while others take the fruit of their labours.


Apparently the Roman Empire had all the technology available to build steam engines... but they didn't do so because they didn't need to; they had enough slaves to do all the work for them.
Actually, slavery was the result of wealth not the cause of it. Romans who owned slaves showed that they could afford them. Slavery is impoverishing compared to the free market where workers can keep most of the fruits of their labours. The relatively free North beat the slave South in the US Civil War, largely because of its much stronger economy. Brazil had slavery longer than other South American countries yet remained poorer.

Desmond
05-03-2009, 04:54 PM
Kogan Wants Your Stimulus Money, Releases $900 'Kevin37' 37-Inch TV (http://www.gizmodo.com.au/2009/03/kogan_wants_your_stimulus_money_releases_900_kevin 37_37-inch_tv.html)


Ruslan Kogan obviously wants you to stimulate his economic wellbeing when you get your $900 cheque from K-Rudd, seeing as how he's just announced a 37-inch Kogan LCD cheekily named "Kevin37". The 1366 x 768 HD screen will even come with a free promotional T-shirt in the style of the Kevin 07 campaign shirt.

...

Capablanca-Fan
06-03-2009, 11:56 PM
Good grief, even Paul Keating is concerned with Ruddernomics (http://www.abc.net.au/news/stories/2009/03/05/2508723.htm), so does anyone still support it?


Former prime minister and treasurer Paul Keating says fiscal stimulus is reaching its limits and even advanced nations are at risk of debt default if they continue to amass huge budget deficits and borrowings to rescue their economies.

“There is a limit to what fiscal policy can do simply because there is a limit to fiscal policy,” Mr Keating told a Lowy Institute gathering in Sydney on Thursday.

“Is this sustainable? Who is going to buy the bonds?”

He cited in particular the huge bill the United States was running up in an effort to counter the recession and to bail out its banking system and strategic companies such as the insurer AIG.

“Is America going to default on its debt or be able to issue bonds?” he asked.

Desmond
12-03-2009, 12:30 PM
Stimulus Payment Information.

“This year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgin.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set or some such thing, thus stimulating the economy.

Q. But isn’t that stimulating the economy of China ?
A. Shut up.

Below is some helpful advice on how to best help the Australian economy by spending your stimulus cheque wisely:

If you spend that money at Kmart, all the money will go to China .
If you spend it on petrol it will go to the Arabs.
If you purchase a computer it will go to India .
If you buy a car it will go to Japan .
If you purchase useless crap it will go to Taiwan .

And none of it will help the Australian economy.

We need to keep that money here in Australia. You can keep the money in Australia by spending it at garage sales, going to a cricket match or footy game, or spend it on prostitutes, beer and wine (domestic ONLY), or tattoos, since those are the only businesses that may still be owned by Aussies.

Thank you all Australians,
Your mate,
K.RUDD.

TheJoker
12-03-2009, 04:14 PM
We need to keep that money here in Australia. You can keep the money in Australia by spending it at garage sales, going to a cricket match or footy game, or spend it on prostitutes, beer and wine (domestic ONLY), or tattoos, since those are the only businesses that may still be owned by Aussies.

Thank you all Australians,
Your mate,
K.RUDD.

You forgot the pokies, they are mostly Australian owned and operated businesses, the majority of Australia's poker machines are manufactured locally and... here's the real bonus the pokies are a fantastic way to redistribute the stimulus payments from idiot's (pokie players) to people with a brain (pokie owners).

Capablanca-Fan
12-03-2009, 04:38 PM
You forgot the pokies, they are mostly Australian owned and operated businesses, the majority of Australia's poker machines are manufactured locally and... here's the real bonus the pokies are a fantastic way to redistribute the stimulus payments from idiot's (pokie players) to people with a brain (pokie owners).
This is true, but it belies Layba's professed compassion for the poor.

TheJoker
12-03-2009, 04:46 PM
This is true, but it belies Layba's professed compassion for the poor.

That is based on the assumption that poor people are more prone to problem gambling, which isn't true.

I posted some AC Nielsen research on problem gambler demographics sometime back.

Capablanca-Fan
12-03-2009, 04:55 PM
Savers aren’t losers (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/savers_arent_losers/)
Andrew Bolt
Herald Sun, 7 March 09


The astonishing pokie losses in poor suburbs help to explain why some of the poor are poor, and will stay poor even after handouts of free cash. [citing Victorians lose $2.6bn on poker machines (http://www.theage.com.au/national/victorians-lose-26bn-on-poker-machines-20090306-8rgx.html)]

Jim_Flood
12-03-2009, 10:06 PM
We need to keep that money here in Australia. You can keep the money in Australia by spending it at garage sales, going to a cricket match or footy game, or spend it on prostitutes, beer and wine (domestic ONLY), or tattoos, since those are the only businesses that may still be owned by Aussies.

Cool. Shuffle on down to Avis or Hertz, hire a brand new Holden or Ford V8, find a quiet out of the way spot and do some circle work for the day.

Alternatively, you could:


sponsor an American family;
buy top-shelf porn; or
apply the George Best Principle, ie "I spent a lot of money on booze, birds and fast cars. The rest I just squandered."

MichaelBaron
13-03-2009, 07:50 AM
Cool. Shuffle on down to Avis or Hertz, hire a brand new Holden or Ford V8, find a quiet out of the way spot and do some circle work for the day.

Alternatively, you could:


sponsor an American family;
buy top-shelf porn; or
apply the George Best Principle, ie "I spent a lot of money on booze, birds and fast cars. The rest I just squandered."


LOL :D

Spiny Norman
16-03-2009, 10:45 AM
I received the first of my 2nd-round stimulus package handouts today, in the amount of $1,900 ($950 for each of my kids).

It has been paid straight off my mortgage, as will the next slab of money which is due in another 2-4 weeks I believe.

TheJoker
20-03-2009, 12:04 AM
Savers aren’t losers (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/savers_arent_losers/)
Andrew Bolt
Herald Sun, 7 March 09


The astonishing pokie losses in poor suburbs help to explain why some of the poor are poor, and will stay poor even after handouts of free cash. [citing Victorians lose $2.6bn on poker machines (http://www.theage.com.au/national/victorians-lose-26bn-on-poker-machines-20090306-8rgx.html)]

You need to be careful when drawing conclusions from such limited statistics. For example some suburbs have a much higher participation rates meaning the expenditure per person can be equivalent. It could well be the case that pokies are a more popular form of entertainment in lower income regions and that the average expenditure per person is no more than what what is spent on other forms of entertainment in more affluent suburbs. This is an area that requires more research.

For example the Sydney CDB (postcode 2000) has the highest pokie revenue of any suburb in NSW, that doesn't mean that those who gamble in the city are more likley to be problem gamblers just that the participation in the city is much higher.

There are also some rather affluent suburbs that rank much higher in gambling expediture in NSW than some lower income suburbs, again I suspect demographics and social norms play a role in affecting participation rates.

This is something that the NSW Government is likley to research in the near future. However, current statistical research is focused on the type of prize reinforcement schedules (maths models) that are more likley to result in problem gambling behaviours.

On a note more related to the topic of the thread, there is to be a High Court challenge to the constitutional legitimacy of the stimulus, law professor (or uni lecturer??) Bryan Pape

Capablanca-Fan
24-03-2009, 03:24 PM
“The greater the amount of government spending, the more it depresses the economy. In so far as it is a substitute for private spending, it does nothing to ‘stimulate’ the economy. It merely directs labor and capital into the production of less necessary goods or services at the expense of more necessary goods or services. It leads to malproduction. It tends to direct funds out of profitable capital investment and into immediate consumption.” — Henry Hazlitt, The Inflation Crisis and How to Resolve It (http://www.mises.org/books/inflationcrisis.pdf).

TheJoker
24-03-2009, 04:34 PM
“The greater the amount of government spending, the more it depresses the economy. In so far as it is a substitute for private spending, it does nothing to ‘stimulate’ the economy. It merely directs labor and capital into the production of less necessary goods or services at the expense of more necessary goods or services. It leads to malproduction. It tends to direct funds out of profitable capital investment and into immediate consumption.” — Henry Hazlitt, The Inflation Crisis and How to Resolve It (http://www.mises.org/books/inflationcrisis.pdf).

"Crowding Out", the name applied to the situation where government spending drives out private investment (due to pushing up interest rates and tightening the labour market) has been shown only to be a problem in two situations:

1. The economy is already booming, interest rates are high and the labour market has no spare capacity.

2. The economy is in a downturn however there is stagflation (high inflation and high unemployment) usually due to supply-side effects.

Situation number 2 is what Hazlitt's book is describing, as it was written in 1978 in the context of the 1973 oil shock.

Niether situation is remotely close to current conditions, the chances of "crowding out" in the current climate is such a remote possibility, its not worth considering.

The econometrics show that government spending does stimulate the economy they also show that govrnment spending stimulates the economy at a greater rate than tax cuts (the multiplier in the US for Gov Spending is 1.1 and for tax cuts 0.7).

All that said, the cash bonuses aren't really government spending in the traditional sense, in that the government doesn't actually spend the full amount (savings are zero). I expect they will have a multiplier effect closer to that of tax cuts. But like tax cuts there effect is more immediate than infrastrucuture spending that take a long time to hit the ground.

Capablanca-Fan
24-03-2009, 04:59 PM
TheJoke, like all lefties, believes in a free lunch. But those in the real world know that government can't spend a dime that it hasn't taken from somewhere else. Bastiat showed this 160 years ago. But now governments might disguise this by printing money, stealing purchasing power from its citizens by devaluing currency; or borrowing, landing the next generation with debt long after the politicians have moved on.

Even worse, Comrade Obamov and the Debtocrats have signed a Porkulus bill without even reading it. Much of the "stimulus" will stimulate nothing for several years if at all, and we see the recent demagogery by these charlatans about the AIG bonuses explicitly guaranteed by the bill they signed, imposing an appalling ex post facto bill of attainder on the recipients.

Spiny Norman
26-03-2009, 12:21 PM
After the recent bout of back-slapping and self-congratulatory pontifications in Washington (tell me, where are all the leftys complaining about Australia tugging the forelock and genuflecting to the USA now?) ... and our lock-step economic policy actions (economic stimuli, a.k.a. the global porkfest), I offer two comments:

(1) "We consider that in Europe we have already invested a lot for the recovery, and that the problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself," -- French President Nicolas Sarkozy

If he's right, and we take Julia Gillard's earlier comments about Australia having the best system of regulation as also being right (and I believe she's at least close to the truth) ... then why are we doing anything at all? Surely we could just have sat tight, focused on infrastructure and micro-economic reforms, and been wonderfully positioned for global recovery. Instead we've been spending like a drunken sailor with nary a care for tomorrow's debt burdens.

(2) This grandiose idea that we can "stimulate the economy" (whether at national or global level) and get a better outcome by borrowing our way to ever deeper levels of debt, is a bit like a self-absorbed male with no knowledge of female anatomy thinking to himself "She's moaning, so I must be doing something right".

So should I just lay back, fake it, grin and bear it, moan a little, and hope it'll all be over soon?

Basil
26-03-2009, 12:28 PM
So should I just lay back, fake it, grin and bear it, moan a little, and hope it'll all be over soon?
Just keep talking it through, Steve. The good guys are listening.

The words are lost on the happy planks - the thick ones have tuned out and couldn't process what you're saying anyway - and the intellectuals filter it with lefty dumb-think.

So, just keep talking it out ... ata boy. We're all in this together. :lol:

useless patzer
26-03-2009, 12:54 PM
From today's Age by business editor Michael Pascoe (link (http://business.theage.com.au/business/cultural-cringe-and-the-debt-binge-20090326-9b0n.html?page=-1))

Clever Emerson

Sometimes much is said by a little silence. There was such a moment's silence last night by the Federal Minister for Small Business and Deregulation, Craig Emerson, at an Edmund Rice Business Ethics Initiative forum on banking that I happened to be chairing.

Emerson has significantly more economic knowledge than the average minister, let alone MP - a PhD in the stuff from ANU on top of his honours degree and masters from the Sydney U. He took a question from the audience about why the government allowed Australian banks to borrow overseas instead of just obtaining their funds from the Reserve Bank and government.

With a wry smile the minister said something along the lines that that would be just printing money, something he thought the Germans had tried in the Weimar Republic with questionable results.

"The Americans and UK are doing it,'' interjected the questioner.

That's when there was the silence. I think I saw a minister who didn't want to comment any further.

On such slender shoulders as Tim Geithner and Gordon Brown then rests the recovery hopes of much of the developed world.

At least at the chessboard, we get to resign a hopelessly lost position and try again.

Mephistopheles
26-03-2009, 01:07 PM
Just keep talking it through, Steve. The good guys are listening.

The words are lost on the happy planks - the thick ones have tuned out and couldn't process what you're saying anyway - and the intellectuals filter it with lefty dumb-think.
Really? As a lefty who is extremely leery of stimulus packages, which only serve to stave off disaster for a tiny while in situations like the one that we currently face, I feel that you're engaging in some fairly gratuitous generalisation.

We can't afford to borrow ourselves into oblivion and I even doubt that the bailout packages implemented in the States were necessarily sensible in the long run and have already (at least partially) backfired.

I agree wholeheartedly with The Snail King's post so stuff that up yer nose and set it on fire. [insert appropriate emoticon here]

Basil
26-03-2009, 01:40 PM
Really? As a lefty who is extremely leery of stimulus packages, which only serve to stave off disaster for a tiny while in situations like the one that we currently face, I feel that you're engaging in some fairly gratuitous generalisation.
I am indeed.


We can't afford to borrow ourselves into oblivion and I even doubt that the bailout packages implemented in the States were necessarily sensible in the long run and have already (at least partially) backfired.
Bravo!


I agree wholeheartedly with The Snail King's post so stuff that up yer nose and set it on fire. [insert appropriate emoticon here]
:lol: Magnificent! More! More!

TheJoker
26-03-2009, 02:46 PM
TheJoke, like all lefties, believes in a free lunch. But those in the real world know that government can't spend a dime that it hasn't taken from somewhere else. Bastiat showed this 160 years ago. But now governments might disguise this by printing money, stealing purchasing power from its citizens by devaluing currency; or borrowing, landing the next generation with debt long after the politicians have moved on.

Jono more strawmen and a lack of fundamental understanding of how the economy works as usual. Firstly where has anybody said the funding for deficits can be created out of thin air?:doh:

Also show me a government that is financing their deficit by printing money? It simply doesn't happen. It is a massive strawman, since we are all aware of what happened in Germany with regards to hyperinflation.

Deficits are either be financed by previous surpluses, or through issuing debt securities (selling of bonds)

Also taking on debt is not necessarily a bad thing, if the debt is invested in a manner that will generate more future income (in the governments case tax revenues through a growing economy) than the cost to service the debt then it can be beneficial its known as leveraging and almost every business uses it to some degree or another. Now as to whether the Government is too highly geared, I'll leave that judgement up to the experts (so far unlike Qld the Federal Gov still has a AAA credit rating), the level a deficit spending (as a % of GDP) is well within the IMF recommendations.

You can certainly argue that the government is lacking in capacity to invest the debt in a manner that will stimulate the economy, or that the stimulus will come too late. Of course you'd be wrong if you argued that fiscal spending doesn't stimulate the economy because all the empirical evidence points towrds the fact that it has a greater stimulatory effect than tax cuts (this probably doesn't apply to cash handouts but they are a minority in this stimulus package).

TheJoker
26-03-2009, 03:00 PM
"the problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself," -- French President Nicolas Sarkozy

Yes that's the long-term solution, but the stimulus packages are a short-term measure.


Surely we could just have sat tight, focused on infrastructure and micro-economic reforms, and been wonderfully positioned for global recovery. Instead we've been spending like a drunken sailor with nary a care for tomorrow's debt burdens.

Firstly the majority of the stimulus is being spent of infrastructure!

Secondly, the current federal debt burden is not at all alarming (The states such as QLD might be another story).


(2) This grandiose idea that we can "stimulate the economy" (whether at national or global level) and get a better outcome by borrowing.... is a bit like...

The good old fashioned concepts of leverage, and continuing to invest in assets in a downturn because we are focused on long-term capacity, not short-term porfit or loss.

Spiny Norman
26-03-2009, 03:04 PM
... the stimulus packages are a short-term measure ...
If you measure them by how long it takes to spend the money and how long the effect lasts, yes, short term.

If you measure them by how long it will take you and I to pay for them, they are at a minimum a medium-term measure and more than likely a long-term measure.

Incidentally, every time I read "government" I try re-reading it with "I" substituted. Helps enormously. e.g. instead of "The Australian government is spending $40B ..." try instead "I am spending $40B ...", because I (and you) are the ones spending it and paying it back.

Mephistopheles
26-03-2009, 03:11 PM
Firstly the majority of the stimulus is being spent of infrastructure!
Good-o. As a lefty, I heartily approve of spending on infrastructure. What I would contend, though, is that we should have been doing that without the global financial meltdown having occurred. Now that it has occurred, I'm far from convinced that massive spending, even on something as worthwhile as infrastructure (of various kinds), is a good idea at all.


Secondly, the current federal debt burden is not at all alarming
Yet.


The good old fashioned concepts of leverage, and continuing to invest in assets in a downturn because we are focused on long-term capacity, not short-term porfit or loss.
We should have been focused on long-term capacity in any number of ways quite some time ago. The flurry of borrowing is a bad thing, even if the money is being spent on useful stuff.

TheJoker
26-03-2009, 04:00 PM
If you measure them by how long it takes to spend the money and how long the effect lasts, yes, short term.

If you measure them by how long it will take you and I to pay for them, they are at a minimum a medium-term measure and more than likely a long-term measure.

Depends on the repayment strategy.



Incidentally, every time I read "government" I try re-reading it with "I" substituted. Helps enormously. e.g. instead of "The Australian government is spending $40B ..." try instead "I am spending $40B ...", because I (and you) are the ones spending it and paying it back.

If you look at it that we are all equally responsible the $40b then it works out to $180 each.

But in reality we all don't contribute equally.

Capablanca-Fan
26-03-2009, 04:20 PM
If you look at it that we are all equally responsible the $40b then it works out to $180 each.

But in reality we all don't contribute equally.
No, the most productive ones contribute more.

TheJoker
26-03-2009, 04:40 PM
No, the most productive ones contribute more.

No not necessarily. In the production of goods and services the benefits are not always distributed equally according to the contribution to the production process. In fact iis often not possible to accurately measure each individuals contribution to the process.

For example, are you sure that Sol Trujillo was 300 times more productive than the average Telstra worker?

Spiny Norman
26-03-2009, 04:43 PM
Funny clip on the news just now ... Kevin Rudd, after his meeting with the head of the World Bank, rabitting on about how important it is to be doing something rather than nothing, and how what he's doing is "the right thing" ... followed by the head of the World Bank back-pedalling with "nobody is sure how any of this is going to turn out".

Kevin must be furious. Someone forgot to brief the head of the World Bank and inform him that Kevin knows exactly how its going to turn out, because Kevin is doing "the right thing" ...

... whatever that is ...

... anyway, its better than doing NOTHING! ...

... so he says ...

Garvinator
27-03-2009, 12:17 AM
I am confused on this topic, in these circumstances, couldn't 'doing nothing' be called doing something? As in by not getting involved you take the proactive decision to let things sort themselves out, or let other players get involved, rather than have big government try and keep bailing everything out all the time.

I keep looking at this all 'stuff' day after day and am reminded of what seem to me to be two simple principles:

1) You do not solve money problems with money- you solve money problems by addressing the underlying causes
2) When dealing with credit debt, at the end of the day, someone has to end up paying the final bill, no matter how much it is passed around.

ER
27-03-2009, 01:55 AM
Garvin!!!!
I just noticed you have ticked 8/9 answers in the poll!!!:eek:

Redmond Barry
27-03-2009, 03:59 AM
Garvin!!!!
I just noticed you have ticked 8/9 answers in the poll!!!:eek:

someones keen on apportioning $112.50 to multiple areas in need.

hoot hoot ;) ;)

Capablanca-Fan
09-04-2009, 02:35 PM
Money gone and now jobs, too (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/money_gone_and_now_jobs_too/)
Andrew Bolt, 9 April 09

If the Rudd Government’s stimulus packages are working so well, why this (http://www.theaustralian.news.com.au/business/story/0,28124,25313128-643,00.html)?:


THE jobless rate hit 5.7 per cent in March, the highest level in more than five years, as 38,900 full-time workers lost their jobs.

Will Kevin Rudd now admit that his first $10.4 billion handout last December failed to do what he’d promised (http://news.ninemsn.com.au/article.aspx?id=756522)?


The 75,000 jobs the government said would be created by its first economic stimulus package will flow this year, Prime Minister Kevin Rudd says.

Will Treasurer Wayne Swan also admit the $10.4 billion stimulus package failed to do what he promised (http://www.businessspectator.com.au/bs.nsf/Article/IMF-forecast-backs-govt-outlook-Swan-L5TBY?OpenDocument), too, leaving us with just debt?:


The Economic Security Strategy is expected to add half to one percentage point to GDP growth and create up to 75,000 additional jobs over the coming year.

Rudd is spending billions we don’t have on fixes that don’t work.

Compare this review (http://mises.org/misesreview_detail.aspx?control=347)of New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America by Burton Folsom, so show that Rudd and Obama haven't learned from history:


His anti–New Deal verdict is hard to dispute: levels of unemployment at the end of the 1930s remained at depression levels. In May 1939, Treasury Secretary Henry J. Morgenthau Jr., one of Franklin Roosevelt's best friends, testified before the House Ways and Means Committee: "I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot" (p. 2). When he spoke, unemployment exceeded 20 percent. Further, and here Folsom has absorbed the pioneering research of Robert Higgs, not even the onset of World War II ended the Depression. True enough, unemployment ended; but this was only because of the draft. Absent this military slavery, there is every reason to think that Roosevelt would have continued to struggle with unemployment.

Spiny Norman
09-04-2009, 06:35 PM
Conversation overhead on the train tonight ... I kid you not:

Boy: "Have you got your $900 from the government yet?"

Girl: (couldn't have been more than 20 years old, quite probably younger, with infant perched on her hip) "Nah, hope it arrives soon, I'm getting a tattoo next week and I don't have enough money".

My bloody taxes are paying for this lunacy!

eclectic
09-04-2009, 06:42 PM
Conversation overhead on the train tonight ... I kid you not:

Boy: "Have you got your $900 from the government yet?"

Girl: (couldn't have been more than 20 years old, quite probably younger, with infant perched on her hip) "Nah, hope it arrives soon, I'm getting a tattoo next week and I don't have enough money".

My bloody taxes are paying for this lunacy!

reminds me of a conversation i heard on a melbourne train twenty odd years ago

these two high powered execs were complaining about having to do twenty hours extra time at the office each week

i, being unemployed at the time, thought how nice it would have been if they could have given those forty hours to me

:rolleyes:

Kevin Bonham
09-04-2009, 08:01 PM
My bloody taxes are paying for this lunacy!

Everyone's a taxpayer now.

Actually if young people are looking at spending some of the money on completely unnecessary items then perhaps it is doing what it was meant to do. But I agree the "girl" is silly; if she'd been paying attention she'd know the payments are spread over several weeks to prevent postal congestion and cheque theft issues.

Capablanca-Fan
09-04-2009, 08:45 PM
Everyone's a taxpayer now.
Tax churning provides jobs to bureaucrats.


Actually if young people are looking at spending some of the money on completely unnecessary items then perhaps it is doing what it was meant to do.
Distort the market, like his bank guarantees and bailout of Holdens?

Kevin Bonham
09-04-2009, 09:25 PM
Distort the market, like his bank guarantees and bailout of Holdens?

Apparently something like that.

I've heard that General Motors in the States is not far from filing for bankruptcy, so why we're bothering to bail out our own boganmobile I'm not quite sure.

arosar
09-04-2009, 09:32 PM
This is concerning: http://www.washingtonpost.com/wp-dyn/content/article/2009/04/02/AR2009040201264.html

AR

Capablanca-Fan
14-04-2009, 02:56 PM
Magic Words in Politics (http://townhall.com/Columnists/ThomasSowell/2009/04/14/magic_words_in_politics?page=full&comments=true)
by Thomas Sowell
14 April 2009


Abraham Lincoln once asked an audience how many legs a dog has if you count the tail as a leg. When they answered “five”, Lincoln told them that the answer was four. The fact that you called the tail a leg did not make it a leg.

It is too bad that Lincoln is not still around today. He might emancipate us all from our enslavement to words.

When you call something a “stimulus” package, that does not mean that it actually stimulates. The way individuals, banks and businesses in general are hanging onto their money suggests that “sedative" package might be more accurate.

This is not a new phenomenon, peculiar to this administration. President Bush's “stimulus” package did not stimulate either. The same was true back in the days of Franklin D. Roosevelt's “pump-priming” by spending government money to get private money flowing.

The circulation of money slowed down back then the way it has slowed down today.

Capablanca-Fan
19-04-2009, 06:21 PM
Australia's debt sentence (http://www.quadrant.org.au/blogs/qed/2009/04/australia-s-death-sentence)
by Cory Bernardi, Liberal Senator for South Australia
Quadrant Online 17 April 2009

...

Excusing the obvious Australianisation of US terminology, the Rudd Government’s reckless indifference to debt and deficits is creating a 'debt sentence' for every Australian that could prove every bit as catastrophic for our future prospects ....

Before we can explore that further, it is important to briefly recall the economic environment pre Prime Minister Rudd. Australia experienced an unprecedented level of continuous economic growth. Nearly $100 billion of Labor Government debt was repaid, budget surpluses became the norm and tens of billions of dollars were set aside for future obligations and opportunities.

Some of these billions were directed to the unfunded liability of the public service retirement accounts, others to establish the communications fund and an education stipend. There were successive years of tax cuts, record employment and productivity increases. All important in preparing our nation for the major demographic, economic and societal changes that lay ahead.

The Rudd Government inherited a $20 billion plus budget surplus. Despite this, the inexperienced and impetuous Mr Rudd immediately demonstrated his lust for battle, manifested in his ill considered and manufactured war on inflation. The result was higher taxes and higher spending in the Rudd Government’s first Budget.

Such is the hubris of Mr Rudd that one can only presume that to celebrate vanquishing his imaginary inflation genie, he has been emptying the Government cellars and toasting his own non-achievement. Or perhaps he is just having another ‘Scores’ moment. How else can you explain Mr Rudd spending like the proverbial drunken sailor ever since?

First there was $10 billion to create 75,000 jobs. Not a single job was created but it was still deemed a magnificent success by Mr Rudd. In fact, such was the success that a further $42 billion of borrowed money was spent under the similar, but even less accountable, guise of 'protecting jobs'.

But before the ink had dried on the Government’s stimulus cheques, Mr Rudd was confronted with another abject failure. His magical broadband tender had turned into the farce it had always promised to be, with no tenderer deemed suitable.

But undeterred, Mr Rudd grabbed the nearest envelope, did a few quick calculations and declared that the taxpayers would come to the rescue with a $43 billion proposal -- nearly ten times the Government’s original commitment. Not satisfied with that, Mr Rudd then went into PT Barnum mode and confirmed it would be the investment opportunity of the millennium, despite no credible investment calculations having been done.

All this with a budget outlook suggesting over $200 billion in national debt will be accrued in little over three years.

This is Mr Rudd’s debt sentence to all Australians ... it is the colour of borrowed money that will shackle every Australian man, woman and child with more than $9500 worth of debt for decades to come.

And what practical benefits has this spending spree delivered? Well, so far not much. Leading economic commentators suggest we are already in recession. Unemployment is rising and business and consumer confidence is low.

Despite the immediate gloom, the Government's actions presuppose a rapid recovery in the international and domestic economy. We are right to be concerned about the consequences if this expectation does not eventuate.

What then? Will Mr Rudd continue his seemingly uncontrollable urge to borrow and spend? What can be done when we are faced with ongoing very high levels of debt, high unemployment, low or negative growth and a spendthrift Government?

The answer is a deceptively simple but very dangerous range of choices. A nation can default on its debts, place an increasing burden on those still working via increased taxation or inflate their way out of debt -- or even a combination of all three. Not so much Morton’s fork, as a trident of potentially dire consequences for Australian citizens.

...

Basil
19-04-2009, 06:29 PM
The love affair with Rudd, the self-loathing and head in sand aside; one thing is certain - sooner or later the electorate will toss out these fools on teh grounds of incompetence. That has been the exit door of leftist governments in the western world for a century. Krudd and friends will be no different.

I'll just be sitting over here marking time while the country very slowly but certainly surely works this all out.

Carry on!

Oepty
19-04-2009, 10:24 PM
The love affair with Rudd, the self-loathing and head in sand aside; one thing is certain - sooner or later the electorate will toss out these fools on teh grounds of incompetence. That has been the exit door of leftist governments in the western world for a century. Krudd and friends will be no different.

I'll just be sitting over here marking time while the country very slowly but certainly surely works this all out.

Carry on!

Why do right wing governments lose power? Surely it is also because they are veiwed as incompetent
Scott

Basil
19-04-2009, 10:28 PM
Why do right wing governments lose power? Surely it is also because they are veiwed as incompetent
Scott
No Scott. Right governments lose power because they are hated. You can set your clock by that as accurately as you can set you clock by left-wing incompetence.

Oepty
19-04-2009, 10:30 PM
No Scott. Right governments lose power because they are hated. You can set your clock by that as accurately as you can set you clock by left-wing incompetence.

Okay. Personally I would rather be veiwed as being incompetent than to have done something that makes me hated.
Scott

Capablanca-Fan
19-04-2009, 10:44 PM
Okay. Personally I would rather be veiwed as being incompetent than to have done something that makes me hated.
Who says they have done something to make them hated? Also, incompetence screws up the whole country, while being hated by lefties doesn't (it's really a badge of honour).

Kevin Bonham
19-04-2009, 10:52 PM
No Scott. Right governments lose power because they are hated. You can set your clock by that as accurately as you can set you clock by left-wing incompetence.

Often they are incompetent as well as hated (just as some left-ish governments become hated as well as incompetent). The tail end of the Menzies era (Gorton and McMahon) was a mess and the last years of Fraser weren't too pretty either. Can think of plenty more right-wing regimes that were a mess by the time of their demise at state level (as well as a few that were not).

Oepty
19-04-2009, 11:08 PM
Who says they have done something to make them hated? Also, incompetence screws up the whole country, while being hated by lefties doesn't (it's really a badge of honour).

Being hated by lefties would not be a problem if they were a minority of population. To be voted out of office for this reason implies that there are more lefties than righties and right wing governments only get into power because lefties vote for them against their general view of things.
I don't think this is true. I think all governments lose power because they do things which cause people who formerly supported them to stop supporting them. Because ALL governments make mistakes over time they are going to make enough mistakes to annoy enough people to make them lose power. The greater the incompetence (and having less skills to cover for the incompetence) the quicker a government will be in a position to lose power. A poor opposition will extend the life of a government because it cannot take advantage of a winnable situation.
Scott

Capablanca-Fan
19-04-2009, 11:10 PM
Often they are incompetent as well as hated (just as some left-ish governments become hated as well as incompetent). The tail end of the Menzies era (Gorton and McMahon) was a mess and the last years of Fraser weren't too pretty either. Can think of plenty more right-wing regimes that were a mess by the time of their demise at state level (as well as a few that were not).
Fraser was hardly right wing, just the anti-Whitlam when it suited him to gain power. IIRC you posted something not long ago that argued that Menzies was not that right either. Conversely, Howard had not mucked up; unemployment was at record lows and the sharemarket was at record highs. People out of a job now, or our children still paying off KRudd's debt, may regret throwing him out.

Oepty
19-04-2009, 11:15 PM
Often they are incompetent as well as hated (just as some left-ish governments become hated as well as incompetent). The tail end of the Menzies era (Gorton and McMahon) was a mess and the last years of Fraser weren't too pretty either. Can think of plenty more right-wing regimes that were a mess by the time of their demise at state level (as well as a few that were not).

A government which becomes hated is just a government that is being incompetent in a way that makes people angry. One of major things a government must do is sell initially unpopular policies and failure to do so is incompetence.
Scott

Oepty
19-04-2009, 11:16 PM
Fraser was hardly right wing, just the anti-Whitlam when it suited him to gain power. IIRC you posted something not long ago that argued that Menzies was not that right either. Conversely, Howard had not mucked up; unemployment was at record lows and the sharemarket was at record highs. People out of a job now, or our children still paying off KRudd's debt, may regret throwing him out.

Howard mucked up, he was not perfect.
Scott

Basil
19-04-2009, 11:17 PM
Howard was 'hated' by some for his green policy.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's policy.
People luv Rudd. Hate Howard.

Howard was 'hated' for his immigration policy.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's policy.
People luv Rudd. Hate Howard.

Howard was 'hated' for his US relations.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's posture.
People luv Rudd. Hate Howard.

Howard was 'hated' for his surplus policy.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's policy.
People luv Rudd. Hate Howard.

It goes on and on.
Same is happening with Obama.
Same has happened in previous eras.

We talk semantics and ideology all we like. As I said before, I'm sitting over here waiting for the country to work it out. They will.

Unless you think Rudd will rule for eternity, I'm happy for anyone to pick another reason why he will be tossed. The result will be the same.

Basil
19-04-2009, 11:19 PM
Okay. Personally I would rather be veiwed as being incompetent than to have done something that makes me hated.
Scott
Really? Incompetence is one of the the worst thing one can be accused of at this level. Being hated ... pffft - that's part of the gig - especially when the hate is deciphered and broken down to its roots. One thing lefties do very well is hate. It doesn't make it legitimate.

Oepty
19-04-2009, 11:21 PM
Howard was 'hated' by some for his green policy.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's policy.
People luv Rudd. Hate Howard.

Howard was 'hated' for his immigration policy.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's policy.
People luv Rudd. Hate Howard.

Howard was 'hated' for his US relations.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's posture.
People luv Rudd. Hate Howard.

Howard was 'hated' for his surplus policy.
Rudd promised utopia. The people voted for Rudd.
Rudd adopted to all intents and purposes Howard's policy.
People luv Rudd. Hate Howard.

It goes on and on.
Same is happening with Obama.
Same has happened in previous eras.

We talk semantics and ideology all we like. As I said before, I'm sitting over here waiting for the country to work it out. They will.

Unless you think Rudd will rule for eternity, I'm happy for anyone to pick another reason why he will be tossed. The result will be the same.

Howard was incompetent, Rudd is being incompetent, the Prime Minister who replaces him (Liberal or Labour or anything else) will be incompentent
Scott

Oepty
19-04-2009, 11:23 PM
Really? Incompetence is one of the the worst thing one can be accused of at this level. Being hated ... pffft - that's part of the gig - especially when the hate is deciphered and broken down to its roots. One thing lefties do very well is hate. It doesn't make it legitimate.

Fair enough, I didn't consider irrational hatred, but still my comment applies. See my other posts, for a polictian becoming hated for something that they have done is the greatest level of incompetence.
Scott

Kevin Bonham
20-04-2009, 12:52 AM
Fraser was hardly right wing, just the anti-Whitlam when it suited him to gain power. IIRC you posted something not long ago that argued that Menzies was not that right either.

I posted a link to the Humphreys thing that argued that Menzies wasn't a capo. But economically, you don't have to be a capitalist to be "right-wing".
You can pick areas in which particular right-ish regimes haven't been consistently "right" but you can do the same for "leftish" regimes as well.


Conversely, Howard had not mucked up; unemployment was at record lows and the sharemarket was at record highs. People out of a job now, or our children still paying off KRudd's debt, may regret throwing him out.

Or they may just see how blatantly obvious it is that unemployment and the sharemarket are driven primarily by global factors with the Australian government having a relatively minor hand in either.

As regards Howard, some governments get the boot for being incompetent at delivering what the people want. Other governments get the boot for being all too competent at delivering what the people actually don't want. It can be a matter of being incompetent at selling the message (as Scott suggests) - but it can also be a matter of having a message that is well past its sell-by date. Otherwise known as becoming "out of touch".

Capablanca-Fan
20-04-2009, 01:00 AM
I posted a link to the Humphreys thing that argued that Menzies wasn't a capo.
Yeah, that's the one.


Or they may just see how blatantly obvious it is that unemployment and the sharemarket are driven primarily by global factors with the Australian government having a relatively minor hand in either.
Yet we got through the Asian financial crisis, the NASDAQ tech wreck and the 11-9 panic. Even apart from this, there are some things the government can control: whether to gain a surplus or spend our way into debt. Note also, the Howard government started under a huge handicap: the surprise huge debt of the Keating government. But the Rudd government had a great head start with the surplus the Howard government left it.


As regards Howard, some governments get the boot for being incompetent at delivering what the people want. Other governments get the boot for being all too competent at delivering what the people actually don't want. It can be a matter of being incompetent at selling the message (as Scott suggests) - but it can also be a matter of having a message that is well past its sell-by date. Otherwise known as becoming "out of touch".
More likely what Scott suggests. Howard didn't privatize the ABC, and his party didn't counteract the Union mendacity about work choices.

Basil
20-04-2009, 10:58 AM
Or they may just see how blatantly obvious it is that unemployment and the sharemarket are driven primarily by global factors with the Australian government having a relatively minor hand in either.
Kevin, do you believe that broadly Rudd and Swann have even the remotest clue as to how to run an economy regardless of prevailing conditions? One of the biggest advantages these two clowns have with the prevailing conditions is that anything and everything (that they gooed up about in their hatching years) can be tried and the ensuing failure can put down to "factors beyond their control". I'd be interested to know if you believe that Rudd and Swan have just wrecklessly emptied the country's coffers or not.


Other governments get the boot for being all too competent at delivering what the people actually don't want. It can be a matter of being incompetent at selling the message (as Scott suggests) - but it can also be a matter of having a message that is well past its sell-by date. Otherwise known as becoming "out of touch".
You say this with some aplomb as if it's QED. Well deeer. Exactly - and this is what conservatives pretty well know going in. This is history repeating and will continue to occur. Parent - teenager. It's no surprise that what the conservatives are branded as out of touch with is generally filtered back into the system with palatable packaging under Laba - see 'It's not the message but the messenger'.

The out of touch mantra is a fav of the leftist spin machines. Teenagers in particular luv it. I have a room full at the office who mouth it on call. That they have the remotest clue about any of the issues is an entirely separate matter. Their abhorrence of Howard's Kyoto policy and their subsequent intellectual accepting of the same policy from Rudd makes me wanna puke.
http://i4.photobucket.com/albums/y105/scene66/smilies/puke.gif

TheJoker
20-04-2009, 04:38 PM
Gunner I believe the Howard Government primarily lost the election on Workchoices and the promise to keep interest rates low.

Workchoices in my opinion was not the sort of IR reforms this country needed.

As for interest rates I found it dishonest for them to suggest that they would be able to keep interest rates low with the economy booming as it was.

Kevin Bonham
20-04-2009, 06:59 PM
Kevin, do you believe that broadly Rudd and Swann have even the remotest clue as to how to run an economy regardless of prevailing conditions?

At this stage I haven't the remotest clue about that. Far too early for a non-expert (in economics) to tell.


One of the biggest advantages these two clowns have with the prevailing conditions is that anything and everything (that they gooed up about in their hatching years) can be tried and the ensuing failure can put down to "factors beyond their control".

Absolutely, although the downside to that is that even if they perform brilliantly they are unlikely to get full credit for it.


I'd be interested to know if you believe that Rudd and Swan have just wrecklessly emptied the country's coffers or not.

In terms of the stimulus, I doubt it. Australians were overtaxed anyway and have been by both parties for yonks. The stimulus is like a clumsy form of tax cut. I'd be most surprised if it proves unaffordable. What I want to see is if there is now a pattern of unsustainable spending even after the worst of the "crisis" is over.


Their abhorrence of Howard's Kyoto policy and their subsequent intellectual accepting of the same policy from Rudd makes me wanna puke.

That was one of the incompetence at selling the message examples. Workchoices was one of the selling the wrong message ones.

Basil
20-04-2009, 09:46 PM
Gunner I believe the Howard Government primarily lost the election on Workchoices ...
No question.


Workchoices in my opinion was not the sort of IR reforms this country needed.
We could argue semantics about 'needed'. Let's not. I think it was good policy.

TheJoker
21-04-2009, 10:16 AM
We could argue semantics about 'needed'. Let's not. I think it was good policy.

I dont

Capablanca-Fan
21-04-2009, 11:45 AM
But even TheJoke's beloved OECD can see it’s insane to make it harder to hire young workers in this crisis, according to the article Labor risk to youth jobs says OECD as PM Kevin Rudd calls recession ‘inevitable’ (http://www.theaustralian.news.com.au/story/0,25197,25362737-601,00.html):


THE OECD has warned that the rollback of the Howard government’s Work Choices industrial relations laws may result in higher youth unemployment, as Kevin Rudd conceded for the first time that recession in Australia was inevitable.

The Prime Minister’s concession came as the OECD called on the Labor Government to return to individual contracts and move away from industry awards if youth unemployment starts to rise. The OECD said young workers would be hardest hit by the downturn, with their jobless rate set to rise twice as fast as that of adult workers.



The OECD believes the rollback of the Howard government's Work Choices industrial relations regime may make the plight of young workers worse.

"Care should be taken to avoid discouraging bargaining at the workplace level and pricing low-skilled youth out of entry-level jobs," the report says.

It says low wages at entry level help youth job prospects. The OECD believes individual contracts under Work Choices "increased the labour market competitiveness of low-skilled youth" and it is concerned that the greater role of awards under the new system will undermine that.

The OECD urged the Government to monitor the effect of the new industrial relations legislation, to determine if the result was significantly higher entry wages for low-skilled youth and/or less demand for these workers.

"Policymakers should be prepared to take steps to amend the new rules if sizeable negative effects are detected."

TheJoker
21-04-2009, 12:25 PM
But even TheJoke's beloved OECD can see it’s insane to make it harder to hire young workers in this crisis, according to the article Labor risk to youth jobs says OECD as PM Kevin Rudd calls recession ‘inevitable’ (http://www.theaustralian.news.com.au/story/0,25197,25362737-601,00.html):


THE OECD has warned that the rollback of the Howard government’s Work Choices industrial relations laws may result in higher youth unemployment, as Kevin Rudd conceded for the first time that recession in Australia was inevitable.

The Prime Minister’s concession came as the OECD called on the Labor Government to return to individual contracts and move away from industry awards if youth unemployment starts to rise. The OECD said young workers would be hardest hit by the downturn, with their jobless rate set to rise twice as fast as that of adult workers.



The OECD believes the rollback of the Howard government's Work Choices industrial relations regime may make the plight of young workers worse.

"Care should be taken to avoid discouraging bargaining at the workplace level and pricing low-skilled youth out of entry-level jobs," the report says.

It says low wages at entry level help youth job prospects. The OECD believes individual contracts under Work Choices "increased the labour market competitiveness of low-skilled youth" and it is concerned that the greater role of awards under the new system will undermine that.

The OECD urged the Government to monitor the effect of the new industrial relations legislation, to determine if the result was significantly higher entry wages for low-skilled youth and/or less demand for these workers.

"Policymakers should be prepared to take steps to amend the new rules if sizeable negative effects are detected."

OECD is probably right, however there is more to employemnt relations than youth unemployment.

I don't doubt that Workchoices has the ability to reduce unemployment levels, its the type of employment it creates and the broader social and economic impacts on moving towards this type of employment that needs to be considered. If it turns previous full-time positions into temporary positions, or several part-time or casual positions that should be taken into account. Driving down the cost of low-skilled labour and creating a numerically flexible workforce has benefits for global competiveness but also may have side-effects on consumption, investment, family planning and many other issues that face this country. Full employment should not be pursued at the expense of quality of employment. For example, temporary workers may have a diffuculty in obtaining home loans (which has a broader effect on the economy) or be less likley to have children (which has an effect on the ageing of the population). It's about finding the right balance that will promote the long-term social and economic outcomes we are looking for.

That's not to say I think the new Fair Work Bill has got it right either. I agree with the National Employment Standards (that is a set of minimum conditions to be afforded to all workers) and the ability of employees to collectively bargain. In my personal opinion, I do not see the need for specific industry award conditions; conditions beyond the minimum safe guards can be negotiated at an enterprise level.

Hopefully IR will cease to become such a political issue, then we might get well researched reforms rather than populist or ideological reforms. These simplified solutions offered by both Labour and Liberal governments often fail to consider the broader impacts of employment realtions and the various trade-offs that occur with any position. OECD is right that a flexible or contingency apporach to IR may be necessary.

It would be nice to think that all of here on this board could understand the social and economic impacts of various IR reforms, but the truth of the matter is none of us understand them enough to make an informed judgement. Still we will have our opinions ill-informed opinions (myself included) based on various biases and perceptions.

Basil
21-04-2009, 12:31 PM
By and large, I think the above post is unmitigated lefty scare-mongering rubbish. I do believe that lefties believe it though.

1. As full employment is approached, the demand for labour and the rates of pay it can attract (skilled or unskilled) increases.
2. I am an employer - have been for 16 years. The second consideration is am I paying too much? The first consideration is am I paying enough!?

Lefties can't process this on account of never having been anywhere near a cash register.

Lefties continue to murder their children in their beds; emptyingthe country's coffers, short-changing jobs. They are, by every standard, utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter utter

planks.

TheJoker
21-04-2009, 12:40 PM
For those that wishing to read the the full OECD summary and recommendations on Youth Employment in Australia can vist the following link

http://www.oecd.org/dataoecd/47/32/42481505.pdf

For example here is the complete statement regarding WorkChoices:


The Labour government has started removing some aspects of the WorkChoices legislation implemented by the former government. The new policy will include an enlarged safety net (reinstatement of dismissal rules for workers in firms with less than 100 employees and more minimum terms of employment and pay) and a phase-out of AWAs. Changes designed to protect vulnerable workers, including youth, who were found in some cases to be disadvantaged under WorkChoices bargaining arrangements, are welcome. However, care should be taken to avoid discouraging bargaining at the workplace level and pricing low-skilled youth out of entry-level jobs. The process of streamlining and modernising awards started under WorkChoices should also be continued.

TheJoker
21-04-2009, 01:19 PM
By and large, I think the above post is unmitigated lefty scare-mongering rubbish. I do believe that lefties believe it though.

1. As full employment is approached, the demand for labour and the rates of pay it can attract (skilled or unskilled) increases.

And then we get a demand-pull inflation, increases in consumption and further pressure on wages until eventually the bubble bursts and wages and employment come crashing down. That's fine if want this sort of cyclical fluctuation. Or you could accept that full employment is not a sustainable goal and that creating more rigid but smaller labour markets has stability benefits. Like I said it is a trade-off. Especially when growth in the economy is fuelled by articfical factors such as the cost of labour (which as you point out is temporary) rather than real increases in productivity.



2. I am an employer - have been for 16 years. The second consideration is am I paying too much? The first consideration is am I paying enough!?.

No doubt, do you also consider whether you have sufficient numerical flexibility to respond to economic changes. That it mitigating some of the risk to your bottom line?

Basil
21-04-2009, 02:35 PM
And then we get a demand-pull inflation, increases in consumption and further pressure on wages until eventually the bubble bursts and wages and employment come crashing down. That's fine if want this sort of cyclical fluctuation. Or you could accept that full employment is not a sustainable goal and that creating more rigid but smaller labour markets has stability benefits. Like I said it is a trade-off. Especially when growth in the economy is fuelled by articfical factors such as the cost of labour (which as you point out is temporary) rather than real increases in productivity.




No doubt, do you also consider whether you have sufficient numerical flexibility to respond to economic changes. That it mitigating some of the risk to your bottom line?
Unmitigated twaddle and irrelevancy of premium quality. This is exactly why you people never ever evr ever ever ever end up in business or within 100 yards of it. Your naval gazing and model watching is
- straight out of Rudd's Boys Own manual
- entirely useless, impractical and indeed not of this world
- desperately preached by others equally as clueless and under-exposed

You people make me wanna puke.

TheJoker
21-04-2009, 04:06 PM
Unmitigated twaddle and irrelevancy of premium quality. This is exactly why you people never ever evr ever ever ever end up in business or within 100 yards of it. Your naval gazing and model watching is
- straight out of Rudd's Boys Own manual
- entirely useless, impractical and indeed not of this world
- desperately preached by others equally as clueless and under-exposed

You people make me wanna puke.

Well it is exactly what billionaire investor George Soros says about markets, but then again he probably doesn't much about business or markets either:rolleyes:

George Soros' theory of reflexivity:


Reflexivity is discordant with equilibrium theory, which stipulates that markets move towards equilibrium and that non-equilibrium fluctuations are merely random noise that will soon be corrected. In equilibrium theory, prices in the long run at equilibrium reflect the underlying fundamentals, which are unaffected by prices. Reflexivity asserts that prices do in fact influence the fundamentals and that these newly-influenced set of fundamentals then proceed to change expectations, thus influencing prices; the process continues in a self-reinforcing pattern. Because the pattern is self-reinforcing, markets tend towards disequilibrium. Sooner or later they reach a point where the sentiment is reversed and negative expectations become self-reinforcing in the downward direction, thereby explaining the familiar pattern of boom and bust cycles

Maybe you wouldn't feel so sick if you took of your ideological blinkers for a minute or two

Basil
21-04-2009, 04:11 PM
Nice try. And what a steaming pile of more bollocks. This is too funny. Your quote of Mr Bazzillionaire has almost nothing to do with your post which I ridiculed. George's theory is esentially one of markets finding balance on a price vector. Your theory twaddle was a bunch a hogwash about wage indexing.

Capablanca-Fan
21-04-2009, 04:16 PM
Well it is exactly what billionaire investor George Soros says about markets, but then again he probably doesn't much about business or markets either:rolleyes:
Of course, he's another limousine lefty who despises free markets, and advocates high taxes while finding tax havens for his own fortune.

TheJoker
21-04-2009, 04:20 PM
Nice try. And what a steaming pile pile of more boolocks. This is too funny. Your quote of Mr Bazzillionaire has almost nothing to do with your post which I ridiculed. George's theory is esentially one of markets finding balance on a price vector. Your theory twaddle was a bunch a hogwash about wage indexing.

No you are just too stupid to see the relationship. They are exactly the same, wages is the price of Labour. Inreasing demand for labour will inflate wages this has a reinforcing effect of inflating prices (wage-price spiral), increased prices put further pressure to increase wages, eventually demand for labour falls as high wages are unsustainable causing the market to enter a downward cycle.

You really have real superiority complex which is rather laughable, considering it stems from running a little dance rag.

TheJoker
21-04-2009, 04:26 PM
Of course, he's another limousine lefty who despises free markets, and advocates high taxes while finding tax havens for his own fortune.

Firstly Soros is quick to point out that over-regulation is more detrimental than under-regulation.

Secondly, he openly admits to profitting from the very flaws in the system he argues against. I don't see anything wrong with that

Basil
21-04-2009, 04:40 PM
They are exactly the same, wages is the price of Labour.
Yes but wages is not the price of goods. And this is the relationship you have expressly tried to argue exists. Your are wrong. You are stupid. You are dangerous if allowed to make any decisions concerning someone else's money.

I am not arguing that wages isn't labour (your quote). Nor have I said anything approximating that. You are either disingenuous in the extreme or clueless or both.

While it is true that labour components make up some part of the total cost of goods; it is also true that the price of goods can decrease while the wages component is rising. This is a very common scenario.


Increasing demand for labour will inflate wages this has a reinforcing effect of inflating prices (wage-price spiral)...
Only if out of control. There is all the difference between inflation being out of control as opposed to normal creep (which is unavoidable).


... increased prices put further pressure to increase wages, eventually demand for labour falls as high wages are unsustainable causing the market to enter a downward cycle.
Again you're back to catastrophic scenarios. A solid demand for labour approaching full employment is a healthy, even optimal environment. No one, not even KRudd would say otherwise.

All that remains is your wages twaddle which I called you on, your disingenuous price quote to somehow patch your ill-considered statement.

TheJoker
21-04-2009, 06:02 PM
You are an absolute waste of bandwidth. The most clueless and dangerous type of lefty possible.

When lacking in arguement the personal attack is usually good option


Yes but wages is not the price of goods. And this is the relationship you have expressly tried to argue exists. Your are wrong.... While it is true that labour components make up some part of the total cost of goods; it is also true that the price of goods can decrease while the wages component is rising. This is a very common scenario..

We are talking about a macro level here not some individual product line price:doh: . By far the most common scenario is that rapidly rising wages causes an increase in the price level (of the economy), this in turn places pressure wages. The ABS Labour Price Index hs tracked closely with CPI since implemented in 1997



Only if out of control. There is all the difference between inflation being out of control as opposed to normal creep (which is unavoidable).

Bascially you don't agreed with the theory of demand-pull inflation. Fair enough but to claim that it is a clueless theory is wrong. Labour Price Index and CPI seem to be strongly correlated thus in cases where labour market is too tight resulting in rapid Labour price inreases one would expect to see similiar increases in CPI. Off course in reality monetary policy is used to intervene.


Again you're back to catastrophic scenarios. A solid demand for labour approaching full employment is a healthy, even optimal environment. No one, not even KRudd would say otherwise..

By full employment do you mean the NAIRU? The problem is that governments seek to reduce unemeployment below the NAIRU, as Howard did with Workchoices. In my opinion (and most mainstream economists) this creates inflation. Because monetary policy always lags behind inflation, we often see a rapid increase in interest rates to combat inflation (sound familiar) which eventually changes business sentiment causing a rapid increase in unemployment.


The fact of the matter is that increases in the unemployment historically occur rapidly compared to decreases. Increasingly flexible conditions are likley in my opinion to increase the volatility in the labour market. This will probably mean a lower unmeployment rate in the long-term with the trade-off being more frequent an rapid up-swings and down-swings in the unemployment rate.



All that remains is your wages twaddle which I called you on, your disingenuous price quote to somehow patch your ill-considered statement.

Again see the strong correlation between CPI and LPI

Basil
21-04-2009, 08:18 PM
I really think you should leave these discussions ... permanently. And not just here, IRL as well. You are all over the shop. As simple concepts are presented to you (ones in which you have no real working knowledge, you delve deeper and deeper into theory until there is no way out). Paralysis ensues and some people would be forgiven for thinking you are saying something intelligent.

Here is a fair chronology of this discussion to date (IMO and as reflected in the posts).

Gunner: Post 165
"1. As full employment is approached, the demand for labour and the rates of pay it can attract (skilled or unskilled) increases.
2. I am an employer - have been for 16 years. The second consideration is am I paying too much? The first consideration is am I paying enough!?"

A simple statement about the motivations of employers - often misunderstood, especially by the hard-wired left.

To which you directly reply (using very specific quotes)
The Joker: Post 167
"And then we get a demand-pull inflation, increases in consumption and further pressure on wages until eventually the bubble bursts and wages and employment come crashing down. That's fine if want this sort of cyclical fluctuation. Or you could accept that full employment is not a sustainable goal and that creating more rigid but smaller labour markets has stability benefits. Like I said it is a trade-off. Especially when growth in the economy is fuelled by articfical factors such as the cost of labour (which as you point out is temporary) rather than real increases in productivity."
You have missed my point entirely. My point was the motivators of employers. You have discussed verbosely the result of high wage spiraling which is NOT a necessary result of my employer attributed actions in practice, (but can be if flamed with other factors in play, and as I also pointed out increasing wages can also occur with the lowering of prices as we see regularly during 'normal' times).

In Gunner post #168
I call your twaddle.

In Joker post #169
You reply with George Soros' opinion on markets, pricing and cycles!

At this point, you have in a few short posts dragged my original statement about employer motivations into the wild realms of extreme wage spiraling!

In post #170
I point out these wild disconnects.

In post #172
You're not having bar of it. You reintroduce the wage spiral idea, which I have previously explained is
a) not all causal from my original (which incidentally you have never addressed), and
b) state the incredible :"you are just too stupid to see the relationship. They are exactly the same, wages is the price of Labour. "

A discombombulated mess of which I have never suggested otherwise and is too simple that it would get thrown out of the teens thread as so obvious.

In Gunner post #174
I point this out and explain how even if rapid wage rises were being discussed, which they're not, wage rises themselves don't equate to increased costs, which you have erroneously averred.

And finally, in Joker post #175
You introduce more rubbish. You say that we're talking about macro level pricing vs. product lines. Wrong. Actually in this case, we (well actually it's only been you all along) are talking about one and the same thing. In the very same sentence you talk about CPI. What else could the discussion be about. More evidence of windy rubbish.

What a dog's breakfast! What a Joker. What an amazing waste of bandwidth.

TheJoker
21-04-2009, 11:51 PM
Here is a fair chronology of this discussion to date (IMO and as reflected in the posts).

Actually the discussion was about Workchoices and why it was a bad policy.

I mentioned 2 things:

1. increasing numerical flexibility of the workforce (i.e. temporary and casual workforce) affects consumption, investment, family planning, and increases labour market volatility. That is loss of job security has some negative impacts that offset the decrease in the unemployment rate

You called that scare-mongering, mentioning that wages (and presumably conditions) improve as full employment is approached.

To which I responded

2. decreasing unemployment in a booming economy creates inflationary pressures (through higher wages) and therefore results higher interest rates to avoid inflation getting out of control. Business sentiment turns and a sharp increase in unemployment usually results.

You called it model watching twaddle that had no real business man would support.

I showed Soros' theory that states that is exactly how markets behave (i.e. tending towards a boom/bust cycle based on sentiment). You didn't seem to undestand.

You tried to imply that labour costs (wages) are not linked to inflation (increases in the price level) by mentioning that there often case of prices going down when wages are rising. (I assumed you meant individual product prices because I know of no case were the has been a decrease in the "price level" or CPI coupled with an increase in wage levels)

I said that the trend in CPI (which is inflation in consumer prices) mathces the trend in Labour Price Index over the last decade. In simple terms wages and inflation were strongly correlated.

An IR policy that is likely to reduce consumer confidence (through loss of job security) in the long-term and cause inflationary levels of employment in the short-term is a bad policy in my books end of story.

Maybe we were arguing about different things, I don't know. Maybe I didn't articulate my position very well, probably because you ticked me off with your arrogant know-all approach.

Capablanca-Fan
22-04-2009, 12:41 AM
Actually the discussion was about Workchoices and why it was a bad policy.
Yet your beloved OECD doesn't agree.


1. increasing numerical flexibility of the workforce (i.e. temporary and casual workforce) affects consumption, investment, family planning, and increases labour market volatility. That is loss of job security has some negative impacts that offset the decrease in the unemployment rate
Come off it. Loss of job security is better than loss of jobs!


2. decreasing unemployment in a booming economy creates inflationary pressures (through higher wages) and therefore results higher interest rates to avoid inflation getting out of control. Business sentiment turns and a sharp increase in unemployment usually results.
This is the old Phillips Curve crap, discredited by the lefty Carter's stagflation which had both high unemployment and high inflation (as previously predicted by Friedman (http://www.econlib.org/library/Enc/PhillipsCurve.html)).


An IR policy that is likely to reduce consumer confidence (through loss of job security) in the long-term and cause inflationary levels of employment in the short-term is a bad policy in my books end of story.
Very few things reduce consumer confidence and increases poverty as much as unemployment. But the unions demonized the work choices, since they care only about their own already employed members, not people looking for work.


Maybe we were arguing about different things, I don't know. Maybe I didn't articulate my position very well, probably because you ticked me off with your arrogant know-all approach.

Redmond Barry
22-04-2009, 12:50 AM
i wish people would stop bashing leftys.

we're only about 17% of the population.

plus everytime i use the computer at work some right handed chump comes along and moves the mouse from the left hand side of the keyboard to the right hand side. its enough to make me consider taking a sickie !!

its hard being discriminated against........ ;) ;)

Rincewind
22-04-2009, 01:06 AM
But the unions demonized the work choices, since they care only about their own already employed members, not people looking for work.

Why would a union object to a policy which was patently going to lead to higher employment levels? That would lead to more potential members (and if you agree it will lead to lower job security) then union membership would soar.

In fact new laws leading to higher levels of employment and lower job security is exactly the sort of policy a self serving union would support.

The reason unions vigorously opposed WorkChoices is because they saw it as a retrograde policy in terms of the employer/employee power balance in industrial relations. Unions spent union money to expose WorkChoices for what it was and the government responded by spending public money to promote their partisan political agenda.

In the end the WorkChoices damage control was a huge waste of public money as ironically the legislation was even more unpopular after the ad campaign and the Coalition paid for it at the election.

TheJoker
22-04-2009, 01:30 AM
Yet your beloved OECD doesn't agree.

Different situation because the labour market is not tight anymore. It wouldn't be a bad short-term policy in recession.


Come off it. Loss of job security is better than loss of jobs!.

The point is that when it is easier to dimiss people (i.e. without redundancies etc) business will be quicker to let people go in bad economic times, rather hold them and hope to ride out the storm. The trade-off is of course they'd be less likley to hire them in the first place knowing that they couldn't get rid of them quickly. Also that some businesses might genuinely go under if they cant quick reduce staff. Probably lower unemployment in the long-run but with more dramatic but possibly shorter cyclical fluctuations.


This is the old Phillips Curve crap, discredited by the lefty Carter's stagflation which had both high unemployment and high inflation (as previously predicted by Friedman (http://www.econlib.org/library/Enc/PhillipsCurve.html)).

Actually it's based exactly on what Freidman and Phelp's said that in the short-run there is an inverse relationship between unemployment and inflation however in the long unemployment will always return to the natural inflation stabilising rate.



the unions demonized the work choices, since they care only about their own already employed members, not people looking for work.

Like Workchoices primarily wasn't an attempt to remove union power so as to undermine the ALP.

TheJoker
22-04-2009, 01:46 AM
Article in the Australian in which Malcom Turnbull questions Swann on whether he undestands NAIRU:

http://www.theaustralian.news.com.au/story/0,,23233865-2702,00.html?from=public_rss

The irony is Swann is with you Jono he is simply trying to lower the unemployment rate as much as possible. Where as Turnbull recognises this is counter productive as it will only cause short-term inflation followed by interest rate hikes. Seems Turnbull learned from Howard's mistakes.

Basil
25-04-2009, 12:55 PM
Has it been noted in this thread that in the late 80s (after its bubble burst), the Japanese government tried to assist its economy with spending, bail-outs and prop-ups? They failed. However they did rack up up a debt of 5 trillion bucks.

Kevin Bonham
25-04-2009, 02:42 PM
Some spokescritter from the IMF a few days ago said that cash handouts do not work and targetted incentives and infrastructure investments are better.

Turnbull immediately seized upon it but the plight of the Opposition at the moment is so miserable that I doubt they can effectively make capital out of anything.

eclectic
25-04-2009, 02:46 PM
if the government gives money to the bottom end of town it's a handout but if it gives it to the top end of town it's a rescue package :rolleyes:

Capablanca-Fan
25-04-2009, 03:53 PM
if the government gives money to the bottom end of town it's a handout but if it gives it to the top end of town it's a rescue package :rolleyes:
They shouldn't be giving it to either end. Rather, they should be taking less from all of us.

Capablanca-Fan
25-04-2009, 03:57 PM
Has it been noted in this thread that in the late 80s (after its bubble burst), the Japanese government tried to assist its economy with spending, bail-outs and prop-ups? They failed. However they did rack up up a debt of 5 trillion bucks.
Probably. Similarly, during the Great Depression, Franklin Roosevelt’s Secretary of the Treasury, Henry Morgenthau, lamented:


“We have tried spending money. We are spending more than we have ever spent before and it does not work….I say after eight years of this Administration we have just as much unemployment as when we started….And an enormous debt to boot!”

Indeed, the term "stimulus" is just another illustration of Thomas Sowell's point that lefties name policies according to their stated intentions not their actual results. He wonders whether it should really be called a "soporific", given the lack of actual stimulation.

Don't forget the KRudd promised to create (not Obamov's "create or save") 75,000 new jobs with his first "stimulus". But he didn't even save jobs — unemployment shot up.

Kevin Bonham
25-04-2009, 07:00 PM
Indeed, the term "stimulus" is just another illustration of Thomas Sowell's point that lefties name policies according to their stated intentions not their actual results.

Politicians generally do this and Howard was among the most extreme culprits of them all ("mutual obligation", "workchoices", "Pacific solution" etc).

eclectic
25-04-2009, 07:08 PM
Politicians generally do this and Howard was among the most extreme culprits of them all ("mutual obligation", "workchoices", "Pacific solution" etc).

please, don't anyone mention "core" and "non-core" ... promise? :uhoh:

TheJoker
26-04-2009, 12:09 AM
Has it been noted in this thread that in the late 80s (after its bubble burst), the Japanese government tried to assist its economy with spending, bail-outs and prop-ups? They failed. However they did rack up up a debt of 5 trillion bucks.

What do you mean failed, the Japanese economy never went into a severe recession?

Here is a summary from Richard Koo (regarded as one of the foremost experts on Japan's Lost Decade) in International Economy Fall 2008:


The Japanese experience suggests that, in a balance sheet recession, a medium-term seamless program of government spending and a program of blanket injection of capital to the banks are needed to provide a floor to the economy. Although a full recovery will have to wait for the recovery of private-sector balance sheets, these two measures will eliminate the danger of falling into a deflationary spiral and provide the revenue for the private sector to repair its balance sheets.

If you are interested you can see his lecture (video and or powerpoints) here (http://paul.kedrosky.com/archives/2009/04/richard_koo_on.html) which provides a complete explanation of his reasoning

Japan has widely been used by Keynesians as an example of a "liquidity trap", and therefore advocating the return of fiscal stimulus policies.

Basil
26-04-2009, 03:30 AM
What do you mean failed, the Japanese economy never went into a severe recession?
If it's OK with you I'll pass. Thanks. Attribute whatever reason you like.

Capablanca-Fan
26-04-2009, 10:29 AM
It's not called "Japan's lost decade" for nothing: huge economic "stimuli" that achieved no growth, more unemployment and huge debts. But debt must be paid back somehow, and that is the big danger of KRudd's and Obamov's policies.

Spiny Norman
26-04-2009, 11:54 AM
Someone pls correct my understanding if this is wrong. When Howard/Costello came to power, federal government debt was around $80B or $90B, and it took them roughly 10 years to get this debt paid off.

When Rudd/Swan came to power, just 18 months ago, net federal government debt was $0. Yes, NIL. And there were 10's of billions stashed away in funds for future spending (e.g. the future fund).

Today, 18 months on, taking into account money already spent, and money that has been promised to be spent ... we are going to be in a position where federally:

-- the money stashed away for the future will have been spent (the cupboard is bare)
-- the budget, after years in surplus, will be roughly $50B in deficit ... in ONE YEAR
-- the government will have borrowed 10's if not 100's of billions for its infrastructure spending, and will leave a net federal government debt somewhere around $200B to as much as $300B if you believe the pessimists

Coalition supporters warned and warned about Labor ... they tax and spend ... always ... they cannot help themselves.

So in 18 months, the work of the past 10 years has been undone. It will take perhaps another 15-20 years to undo Ruddernomics. If its possible to undo it. It may not be. Japan STILL has around $1,000,000,000,000 of federal government debt like a noose around its neck, from its failed policies.

God this is depressing. My poor kids. And their kids.

Now we are getting two conflicting messages:
-- the government is spending money to stimulate the economy; BUT
-- the government is reigning in spending because we cannot afford to keep spending like we have, so everyone had better prepare for a horror budget

I think we would have been better off (although not me personally) if the billions splashed around in the latest cash handouts had been kept in reserve to:
-- increase payments to unemployed people
-- increase payments to pensioners

The social dislocation which will ensue in coming months and years as:
-- interest rates start to rise again;
-- taxes go up (this is INEVITABLE)
-- unemployment goes through the roof (also inevitable now)

and we see family after family losing their homes, etc. This is going to tear that the very fabric of our community. In the midst of this, the government has STUPIDLY poured extra money into first home owners grants!

Not just for newly constructed buildings (which makes sense, as it employs people directly to build them), but to all homes. This distorts the housing market and artificially props up prices (temporarily) until such time as the federal government runs out of money (which is soon), at which point the market which HAS TO deflate will deflate even more catastrophically than before. And we'll have additional government debt on top of that.

Flip me. This is stupidity on a grand scale. The global economic crisis has as its signature a property bubble that needed to be deflated. Australia has one of the biggest, if not THE biggest property bubble of all developed countries. Yet our government is delaying the inveitable and arguably making it worse.

/RANT

TheJoker
26-04-2009, 12:36 PM
If it's OK with you I'll pass. Thanks. Attribute whatever reason you like.

No worries, but just out of curiosity did you check out the lecture?

TheJoker
26-04-2009, 12:49 PM
It's not called "Japan's lost decade" for nothing: huge economic "stimuli" that achieved no growth, more unemployment and huge debts. But debt must be paid back somehow, and that is the big danger of KRudd's and Obamov's policies.

Actually if you check out the lecture (which you obviously haven't), the idea is that the stimulus prevented the economy from entering a severe recession/depression.

Unemployment only rose to 4.5% which most countries would be extremely happy with barring the fact of a major economic crisis.

Koo does argue that the deficit was larger than necessary.

Capablanca-Fan
26-04-2009, 05:52 PM
Unemployment only rose to 4.5% which most countries would be extremely happy with barring the fact of a major economic crisis.
But that still more than doubled their previous rate.


Koo does argue that the deficit was larger than necessary.
And this has to be repaid! So how will KRudd and Obamov manage that? Raising tax rates and inflationary money-printing quantitative easing.

TheJoker
27-04-2009, 12:11 AM
But that still more than doubled their previous rate.

Indicating that the previous level was most likley well above the NAIRU. Possibly part of the cause of the asset bubble in the first place.


And this has to be repaid! So how will KRudd and Obamov manage that? Raising tax rates and inflationary money-printing quantitative easing.

It may not be necessary to do either, rather simply run a surplus when the economy starts growing again. Off course this may take a number of years.

BTW if you don't use fiscal stimulus it will take a number of years for the private sector to repair their balance sheets, which will longer periods of high levels of unemployment and lower tax revenues which will result in budget deficits anyway and potenitally a depression. Basically the govenrments stuffed up by allowing the housing bubble to get as bad as it did, there isn't a way out for them that doesn't involve deficits.

Unlike other recessions in the past monetary policy hasn't had the desired effect. You could argue for tax cuts, but that is also going to deliver massive deficits, and the Japan research indicates that Government spending was more effective than tax cuts (i.e. tax cuts produced portionally bigger deficits).

Capablanca-Fan
27-04-2009, 09:24 AM
It may not be necessary to do either, rather simply run a surplus when the economy starts growing again.
That will require some austere measures. Better not to get into massive debt in the first place, especially as it hasn't delivered the 75,000 jobs KRudd promised (as it didn't in Japan or the Great Depression).


Off course this may take a number of years.
As in the Great Depression and Japan's lost decade. Yet recessions were brief in the Harding–Coolidge and Reagan presidencies because the government did nothing, i.e. nothing to oppose the needed correction.

Basically the govenrments stuffed up by allowing the housing bubble to get as bad as it did, there isn't a way out for them that doesn't involve deficits.
Yet a major reason for the housing bubble is state governments not releasing land, so more people were chasing the same amount of available land, so price increases.


Unlike other recessions in the past monetary policy hasn't had the desired effect. You could argue for tax cuts, but that is also going to deliver massive deficits, and the Japan research indicates that Government spending was more effective than tax cuts (i.e. tax cuts produced portionally bigger deficits).
For one thing, if you want to stimulate, there is little point if most of the money won't even trickle through the bureaucracy for years. Tax cuts would have immediate effect, since people would already be able to plan their budgeting knowing that the government will be confiscating less. For another, it should be blindingy obvious to state governments that if they want real jobs, they should stop fining employers for hiring (payroll tax).

Capablanca-Fan
27-04-2009, 11:59 AM
Rudd’s cash: From those who earn to those who gamble (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/rudds_cash_from_those_who_earn_to_those_who_gamble/)
Andrew Bolt, 27 April 09

This is gambling financed by the $900 a person giveaways that was cash taken from people who actually worked hard to earn it:


In an unusual move, the Victorian Commission for Gambling Regulation has warned (http://www.theage.com.au/national/handouts-fuel-pokies-binge-20090426-ajef.html) that “extra government payments can lead to customers or club members spending extra money gambling. Gambling providers are encouraged in these times to watch for signs of problem gambling among patrons."…

The warning comes as the Government puts the final touches on the federal budget and after recent cash hand-outs caused an almost $30 million increase in poker machine spending in a month (in Victoria)… April figures to be released next month are expected to show a continued jump in taxpayer-funded spending on poker machines.

...

World Vision chief executive Tim Costello shared her [Victorian Council of Social Service chief Cath Smith's] concerns. "We know with every stimulus package what jumps is pokies spending, which creates virtually no jobs," he said.

"The worst social and economic outcomes are being encouraged and the social outcomes are communities fragmenting, families fragmenting, crime rising because of what happens when you play the pokies. It is not just you blow $950; you keep playing and lose horrendously," he said.

Not only was the cash wasted, it reinforced exactly the kind of behaviour that left some people broken enough to qualify for the cash in the first place. And the taxes to pay for the handouts will be raised from hard workers who will wonder why they are such mugs.

Desmond
27-04-2009, 12:19 PM
What does roulette pay for a correct pick of single number?

Tony Dowden
27-04-2009, 01:27 PM
A government which becomes hated is just a government that is being incompetent in a way that makes people angry. One of major things a government must do is sell initially unpopular policies and failure to do so is incompetence.
Scott

One of the hallmarks of Australian politics (as far as I can make out after thre-and-a-half years back in Tassie) is an addiction to polemics and exaggeration.

:hmm: Why?? I just don't get it. :confused:

Do we really deserve such mediocrity? Is it the media? Politicians? Or is it us? Its almost enough to put people off democracy ...

This morning I read on the front page of 'The Australian' claims by the Liberal/National coalition that Labor's efforts to combat the effects of the GFC (Global Financial Crisis) will beggar us for the next 30 years (or words to that effect). :eek:

On the other hand Labor's efforts to mitgate the not-if-but-when recession have been shamelessly and systematically ideological. :( One example: Labor's dogged refusal to countenance tax cuts - when almost every other OECD country recognises how efficient this is and has already done so as part of their multi-pronged response to the GFC.

What has the Coalition had to say? Well, apart from some early calls for tax cuts (good critique, but why not ratchet it up?), all I've heard is the twin mantra that the stimulus 'hasn't created any new jobs' - probably untrue if we take this literally but the main point is that the stimulus is an emergency measure designed to save as many existing jobs as possible, not to create new jobs :rolleyes: and the equally facile notion that as a nation we 'can't afford' to go into debt - as if a national economy is the same as your or my financial affairs (and never mind our nation's gargantuan mineral wealth). :rolleyes: That's it as far as I've noticed: the sum total of the Coalition's 'opposition' to the governent re the GFC. If that's the best the Coalition can manage they don't deserve the goverment benches until they've learned to mount a cogent and coherent critique of the current government - in other words to be a real Opposition.

Hey all you right and left wingers out there: tell me I'm wrong. :whistle: I suspect I don't understand your realities but I wonder if your part of the political spectrum is parallel to my universe? :D

Capablanca-Fan
27-04-2009, 01:56 PM
What has the Coalition had to say? Well, apart from some early calls for tax cuts (good critique, but why not ratchet it up?), all I've heard is the twin mantra that the stimulus 'hasn't created any new jobs' - probably untrue if we take this literally but the main point is that the stimulus is an emergency measure designed to save as many existing jobs as possible, not to create new jobs :rolleyes:
Excuse me, but they DID claim that it was to create jobs.

“That is why we have embraced an Economic Security Strategy, a stimulus package of some $10.4 billion, and that is why we believe it is necessary in our current circumstances to support growth but also to support jobs. That package of $10.4 billion, we are advised, will help to create up to 75,000 additional jobs over the coming year. It is a $10.4 billion package aimed at helping to create up to 75,000 additional jobs over the coming year.” — Kevin Rudd (http://www.openaustralia.org/debate/?id=2008-11-11.6.2) 11 November 2008
“The economic security strategy is expected to help create up to 75,000 additional jobs over the coming year,4”" she [Julia Gillard] said (http://www.livenews.com.au/Article/Index/137233?channel=home) (6 Nov 2008).
“Our central objective is to protect working families as much as we possibly can from the impact of the global financial crisis, hence the $10.4 billion Economic Security package to strengthen the economy and to protect households. … The strategy is expected to result in a boost to the level of real GDP of between half and one percentage point. It will help to create up to 75,000 additional jobs over the coming year.” — Wayne Swan (http://www.treasurer.gov.au/DisplayDocs.aspx?doc=transcripts/2008/157.htm&pageID=004&min=wms&Year=&DocType=) 5 Nov 2008.
“And that’s also why the Government has acted swiftly to inject $10.4 billion in direct fiscal stimulus into our economy through the Economic Security Strategy. The strategy is forecast to boost the level of real GDP between half and one percentage point. And help to create up to 75,000 additional jobs over the coming year.” —Nick Sherry, Minister for Superannuation and Corporate Law (http://www.treasurer.gov.au/DisplayDocs.aspx?doc=speeches/2008/040.htm&pageID=005&min=njs&Year=&DocType=) 20 Nov 2008

I fail to see how much more explicitly it could have been stated.


and the equally facile notion that as a nation we 'can't afford' to go into debt - as if a national economy is the same as your or my financial affairs (and never mind our nation's gargantuan mineral wealth). :rolleyes:
Yes, we know about the fallacy of composition (http://creation.com/loving-god-with-all-your-mind-logic-and-creation) ;) But still, big spending got much of the world into this mess, so it beggars belief that still more of the same will get us out.


That's it as far as I've noticed: the sum total of the Coalition's 'opposition' to the governent re the GFC.
OK, the questions are: is this debt worth it, and how do we pay it back?


If that's the best the Coalition can manage they don't deserve the goverment benches until they've learned to mount a cogent and coherent critique of the current government — in other words to be a real Opposition.
KRudd won power largely by lying that he was an economic conservative like Howard; you know, the one who inherited billions of dollars of debt from the previous Layba government, and despite the Asian financial crisis, the tech wreck and 11-9, presented Australia with a nice surplus of billions of dollars and the lowest unemployment in decades.

Unfortunately the current opposition has lost its way somewhat, and has forgotten how to oppose. Layba-Lite Talkbull couldn't wait to distance himself from the unemployment-lowering WorkChoices, just before even the leftist OECD said repealing this reform would cost jobs.

Capablanca-Fan
27-04-2009, 01:58 PM
One of the hallmarks of Australian politics (as far as I can make out after thre-and-a-half years back in Tassie) is an addiction to polemics and exaggeration.
Yet it took the Kiwis long enough to throw out the Labour nanny-state and replace it with a government which does NOT intend to spend-spend-spend and get the country into debt as FDR did in America with no jobs at the end of it.


This morning I read on the front page of 'The Australian' claims by the Liberal/National coalition that Labor's efforts to combat the effects of the GFC (Global Financial Crisis) will beggar us for the next 30 years (or words to that effect). :eek:
The Labor-leaning Courier Mail said much the same thing, showing a pic of a newborn baby girl, saying that by the time she votes, the debt will still be there.

Fact remains: debt must be paid for eventually. It will mean higher taxes, reduced spending, and possibly printing money.


On the other hand Labor's efforts to mitgate the not-if-but-when recession have been shamelessly and systematically ideological. :( One example: Labor's dogged refusal to countenance tax cuts — when almost every other OECD country recognises how efficient this is and has already done so as part of their multi-pronged response to the GFC.
An especially important one would be payroll tax, a fine on employers who hire people! :wall: :wall: :wall: :evil: :evil: :evil:

Basil
27-04-2009, 02:21 PM
The Labor-leaning Courier Mail said much the same thing, showing a pic of a newborn baby girl, saying that by the time she votes, the debt will still be there.

Fact remains: debt must be paid for eventually. It will mean higher taxes, reduced spending, and possibly printing money.
Murdering the kids (yes even lefty kids) in the beds, as predicted by me, before these clowns got in (and played their part in the repetitive cycle).


Unfortunately the current opposition has lost its way somewhat, and has forgotten how to oppose. Layba-Lite Talkbull couldn't wait to distance himself from the unemployment-lowering WorkChoices, just before even the leftist OECD said repealing this reform would cost jobs.
I don't know if they've 'forgotten'. I think Turnbull could turn it on any time he likes. I think the Libs feel the electorate has decided what it wants to hear for a few years and no amount of credibility, intelligence and common sense will move them. Please remember a very great part of the western world electorate is shell-shocked and confused. They will come out of it.

TheJoker
27-04-2009, 04:10 PM
Yet recessions were brief in the Harding–Coolidge and Reagan presidencies because the government did nothing, i.e. nothing to oppose the needed correction..

Actually Reagan also ran budget deficits but his fiscal stimulus was delivered through tax cuts not Government spending.

But more importantly the market responded well to changes in monetary policy (i.e. lower interest rates) that didn't happen in Japan or this crisis.



For one thing, if you want to stimulate, there is little point if most of the money won't even trickle through the bureaucracy for years. Tax cuts would have immediate effect, since people would already be able to plan their budgeting knowing that the government will be confiscating less. For another, it should be blindingy obvious to state governments that if they want real jobs, they should stop fining employers for hiring (payroll tax).

You won't get any arguement from me that tax cuts are more immediate, however they are less expansionary, its a trade-off. The evidence from Japan showed they had less of an effect due to consumers saving a large portion of their tax cuts, that money became a leakage because banks were unable/unwilling to lend this money to businesses.

TheJoker
27-04-2009, 04:18 PM
Not only was the cash wasted

Actually almost all of Australia's gambling industry is locally based, so it probably help keep more jobs afloat than buying goods manufactured in China by an off-shore corporation.That money will now be in the hands of other Australians who can spend it again.

Capablanca-Fan
27-04-2009, 05:54 PM
Reflections of a Neo-Liberal (http://www.quadrant.org.au/magazine/issue/2009/4/reflections-of-a-neo-liberal)
Steven Kates
Quadrant 53(4), April 2009

“And with this $42 billion package we are heading deep into deficit. We are racking up massive levels of debt in a previously debt-free economy. And for what? To insulate our houses and build new libraries for our schools.

“The stunning lack of imagination is possibly the most astonishing part about the stimulus. Even if I thought it would do some overall economic good, which I don’t, are these really the priority issues for the country? Is there really nothing better we can throw $42 billion at? For all the Prime Minister’s criticisms of neo-liberal economists, is this really the best we can do?

“The idea that building better schools will add to Australian productivity in anything other than the longest of runs is one of those nonsensical ideas that have been bequeathed to us by Keynesian economics. According to Keynesian theory, it is the spending itself that supposedly causes growth, not the value created by the outputs of the economic activity. We will chew up many billions of dollars of existing value to improve our schools, but when will we get the payoff? Even if we ultimately make every one of our sixteen-year-olds 20 per cent more productive because of all this expenditure, when is the soonest we can get the productive dividend? In twenty years, perhaps, but no sooner than ten.

“In the meantime it is money spent that adds nothing to our productive capacity while adding huge amounts to our national level of debt. Not till those sixteen-year-olds are out there in the workforce and pulling their economic weight will we have the additional wherewithal to pay off the debts we are accumulating now. Until then, we pay the billions of dollars of interest. And that, of course, assumes we actually do end up making our workforce more productive because of these outlays today.

“It is pointless to go on. If you are of the opinion that we can make ourselves richer by having each of us write ourselves a cheque, then there is nothing more to be said. Perhaps we have become so wealthy that we can take a huge proportion of our annual output and sink it into the sea without serious misadventure. But however you look at it, that is what is happening. We are taking our productive capabilities and directing them into dead ends and dark corners. It is a terrible waste. If you really were worried about the poor and the disadvantaged, the low-paid and the unemployed, this is not how you should go about giving them jobs, adding to their wealth and improving their lives.”

Tony Dowden
27-04-2009, 08:51 PM
Thanks guys: more considered argument and less polemic :clap: :clap: :clap:

eclectic
27-04-2009, 08:53 PM
Thanks guys: more considered argument and less polemic :clap: :clap: :clap:

... and more of your own ideas too rather than copying and pasting from elsewhere :whistle:

TheJoker
28-04-2009, 10:13 AM
Reflections of a Neo-Liberal (http://www.quadrant.org.au/magazine/issue/2009/4/reflections-of-a-neo-liberal)
Steven Kates
Quadrant 53(4), April 2009

“The idea that building better schools will add to Australian productivity in anything other than the longest of runs is one of those nonsensical ideas that have been bequeathed to us by Keynesian economics.

Might be nice if he understood the word productivity before much susch a nonsensical statement. Productivity (in economics) is the output per unit input. In no way Keynesian economics state that spending increases productivity. He obviously has no idea.

Keynesian economics suggests that spending causes more units of input to be employed thus boosting total output (GDP). It does not imply that each unit will be more productive.



"We will chew up many billions of dollars of existing value to improve our schools, but when will we get the payoff? Even if we ultimately make every one of our sixteen-year-olds 20 per cent more productive because of all this expenditure, when is the soonest we can get the productive dividend? In twenty years, perhaps, but no sooner than ten.

Making the arguement that we shouldn't plan for long-term productivity increases is rather stupid. I guess we could sit idle and wait for those countries investing in education to surpass us. Hmmm.... I guess I know which I prefer


“In the meantime it is money spent that adds nothing to our productive capacity while adding huge amounts to our national level of debt. Not till those sixteen-year-olds are out there in the workforce and pulling their economic weight will we have the additional wherewithal to pay off the debts we are accumulating now. Until then, we pay the billions of dollars of interest. And that, of course, assumes we actually do end up making our workforce more productive because of these outlays today.

An idea called leverage, you borrow money to comission a project on the assumption that it will net returns greater than the cost of servicing the debt. The only arguement to be made is will the benefits outweigh the costs. But of course he provides no substantial forecasts to show that it will or wont. But in general well educated populations tend to have greater productivity.

In the meantime it employs some of our otherwise unemployed productive capacity.

Capablanca-Fan
28-04-2009, 11:59 AM
Might be nice if he understood the word productivity before much susch a nonsensical statement. Productivity (in economics) is the output per unit input. In no way Keynesian economics state that spending increases productivity. He obviously has no idea.
Yeah, obviously economics professors need lessons in economics from Joke.


Making the arguement that we shouldn't plan for long-term productivity increases is rather stupid. I guess we could sit idle and wait for those countries investing in education to surpass us. Hmmm.... I guess I know which I prefer
Yet America spends a fortune on its government schools, but the education is crap. It's especially crappy in Washington DC which receives bucketloads of money.


An idea called leverage, you borrow money to comission a project on the assumption that it will net returns greater than the cost of servicing the debt. The only arguement to be made is will the benefits outweigh the costs. But of course he provides no substantial forecasts to show that it will or wont. But in general well educated populations tend to have greater productivity.
Depends on the education. One of the big problems with the post-independence African nations India is the rule by over-educated people in crap subjects, both in politics and the expanded bureaucracies, who made their people far worse of than they were under colonialism. Thomas Sowell discusses this at length in his book Conquests and Cultures.


In the meantime it employs some of our otherwise unemployed productive capacity.
But there is an opportunity cost: the government must take money out of the private sector, costing jobs there. It's again what Bastiat pointed out: we must consider not only what is seen (government-created jobs) but what is not seen (jobs lost because the private sector has less money).

Capablanca-Fan
28-04-2009, 02:48 PM
To Subsidize Or Not To Subsidize: That Is The Question? (http://www.burtfolsom.com/?p=217)
Burton Folsom, 27 April 2009

On the subject of the effectiveness of government programs, Milton Friedman once wrote:


“There is a sure-fire way to predict the consequences of a government social program adopted to achieve worthy ends. Find out what the well-meaning, public-interested persons who advocated its adoption expected it to accomplish. Then reverse those expectations. You will have an accurate prediction of actual results.”

If we take a trip through American economic history, we find Friedman’s formula vindicated more often than not. For example, the first government subsidy in U. S. history was when President George Washington supported the funding of a government-operated fur company in the American Northwest. Its purpose was to allow the U. S. to trade furs with the Indians, earn their loyalty, and keep the British fur traders away from the Mississippi River. What happened? Just the opposite. The government fur company was incompetently managed; Indians mocked it because it sold farm equipment and jews harps instead of cheap and useful blankets, guns, and axes. The British, therefore, flagrantly expanded their fur trading deep into American territory.

In the 1860s, the U. S. began building transcontinental railroads to pull our nation together and give passengers cheap railroad fares across the country. What happened? Again, just the opposite. The country became more divided because (1) some states were left out of the transcontinental building, (2) the first transcontinentals were so poorly built they never provided cheap transportation, and parts of those roads had to be rebuilt later after bankruptcy hearings, and (3) the Irish on the Union Pacific fought with the Chinese on the Central Pacific, which sparked ethnic tensions nationwide. Furthermore, the costs of transportation were not so cheap because the transcontinentals went into receivership often, and their rates became highly regulated. Only when James J. Hill built a transcontinental road (the Great Northern) with no federal subsidy did the U. S. emerge with a competitive and unifying railroad.

As a final example, in 1971 President Nixon instituted wage and price controls to halt inflation. When the price controls were lifted a couple of years later, inflation skyrocketed, and remained in the double digit range for the rest of the decade.

All of these examples need to be discussed and debated to gain insight in how to make public policy. Let’s study a more recent example. The Brits and the Canadians instituted national health care with the goal of providing cheaper medical care for their middle-and-lower income citizens. What happened? The demand for health care skyrocketed, and the physicians in those countries had long lines of patients, some of whom died waiting for surgeries that never occurred. Wealthy citizens had the option of going to the U. S. for surgery, or using local surgeons during off-hours. However, the middle-and-lower income citizens, many of whom would have gladly paid for medical care, waited in lines and hoped to be treated as soon as possible.

As many Americans debate whether or not to adopt universal health care and more federal aid to education, we need to study and ponder the precedents for how well federal subsidies have worked in our past.

Ian Murray
29-04-2009, 11:31 AM
Greed is Good Again

Gordon Gekko is back in sequel to Oliver Stone's Wall Street (http://www.theaustralian.news.com.au/business/story/0,28124,25403207-36418,00.html)

April 29, 2009
The Australian/The Wall St Journal


IF ever there was a time to revive the corrupt financial villain Gordon Gekko - famous for his 'greed is good' monologue - it would be in the midst of a global financial crisis when some of the greatest villains of the day are, indeed, corrupt Wall Street financiers.

Michael Douglas, whose turn as Gekko in the 1987 film Wall Street epitomised the thrusting capitalism of the 1980s, is reuniting with director Oliver Stone to make a sequel to the film.

Douglas is reprising his Oscar-winning role as Gekko for the sequel, which for now has the working title Wall Street 2, film studio 20th Century Fox has confirmed. A spokesman said the project is timely and relevant given the state of the world.
...
The sequel will also boast the same producer and screenwriter as the original, though the backdrop this time will be the financial crisis that has brought down some of the world’s biggest banks in the past year...

Capablanca-Fan
29-04-2009, 12:28 PM
Greed is Good Again
Of course, classic free marketeers like Adam Smith, Milton Friedman and Thomas Sowell never claimed that greed was good. Rather, they pointed out that it was a universal character flaw of humanity, and that the free market was the best way to channel this for the good of society. That's because to best satisfy one's greed, one must figure out a way to please one's fellow man by giving him things he wants at a price he's willing to pay. People are no less greedy in command or "mixed" economies, but have an alternative way to satisfy greed: by political lobbying to persuade politicians and bureaucrats to grant special favours or restrict competition.


RWsx1X8PV_A

Ian Murray
30-04-2009, 10:48 AM
...That's because to best satisfy one's greed, one must figure out a way to please one's fellow man by giving him things he wants at a price he's willing to pay. People are no less greedy in command or "mixed" economies...
'Greed is good' was immortalised by Gordon Gekko, a fictional movie character. I'm sure no-one else would use it, or at least not outside a boardroom.

I have no problem with anyone making a quid by providing desirable and reliable goods or services at a fair price. However the free market is a fertile breeding ground for excesses (as are other market systems). Witness US banks paying their executives massive bonuses before lining up for government handouts.

Some recent home-grown examples:-

- The Visy/Amcor price-fixing cartel, for which Visy was fined $36m.
- James Hardie assuring the public, falsely, that its asbestos victims compensation fund was fully funded before moving offshore. The directors have been convicted and the case awaits appeal.
- Telstra paying Sol Trujillo more than $33m in cash and $5.6m in shares for his four years as CEO ending 30 June (when his favourable tax treatment expires), plus covering any US tax liability he may incur when he returns to the US. His stewardship was marked by declining share prices and continual legal battles (at who knows what cost) with the current and previous Federal governments.
- The husband and wife proprietors of Queesnland-based Storm Financial paying themselves a $2m dividend shortly before the company went belly up, owing $78m (the $2m has been frozen during investigation).

“I’ve never understood why it is ‘greed’ to want to keep the money you've earned but not greed to want to take somebody else's money.” - Thomas Sowell

Of course politicians are well paid too (Kevin Rudd gets a shade over $200,000 a year plus allowances and Barack Obama gets $US400,000 for running largish organisations), but perhaps they could do a little better in the business world.

Capablanca-Fan
30-04-2009, 11:19 AM
I have no problem with anyone making a quid by providing desirable and reliable goods or services at a fair price. However the free market is a fertile breeding ground for excesses (as are other market systems). Witness US banks paying their executives massive bonuses before lining up for government handouts.
Sure, who said the free market is perfect, given that it comprises imperfect humans. But as Friedman said, no system has improved the living standard of the ordinary people.

If you really want "a fertile breeding ground for excesses", try the systems where government runs parts of the economy, so businesses have an incentive to lobby for favours and restrictions of competition. A good example is the wealthy American sugar barons who bribe give campaign contributions to both parties to keep sugar tariffs. The sugar barons get very wealthy, but American consumers and Australian sugar exporters are screwed, and businesses that use sugar (e.g. Lifesavers) move outside America costing far more jobs than the tariffs saved.


Of course politicians are well paid too (Kevin Rudd gets a shade over $200,000 a year plus allowances and Barack Obama gets $US400,000 for running largish organisations), but perhaps they could do a little better in the business world.
I don't think politicians are overpaid, unlike top bureaucrats.

Ian Murray
30-04-2009, 03:47 PM
Sure, who said the free market is perfect, given that it comprises imperfect humans
Agreed. Same applies to any imperfect human, regardless of political persuasion - the Left can't be blamed without also blaming the Right.


But as Friedman said, no system has improved the living standard of the ordinary people [more than the free market]
With even greater improvement possible without corporate excesses and tax avoidance schemes (leaving those ordinary people to bear the brunt of the income tax burden)


I don't think politicians are overpaid, unlike top bureaucrats.
Do you think many CEOs and other top business executives are overpaid?

Capablanca-Fan
30-04-2009, 05:06 PM
Agreed. Same applies to any imperfect human, regardless of political persuasion — the Left can't be blamed without also blaming the Right.
Yet the free market means that greed can be satisfied only by serving one's fellow man, not political lobbying (as in a social(ist) democracy) or force (anarchy or communism).


With even greater improvement possible without corporate excesses and tax avoidance schemes (leaving those ordinary people to bear the brunt of the income tax burden)
You mean like a lot of Obamov's appointees, including the current overseer of the IRS? No, to lefties, taxes are what other people pay.


Do you think many CEOs and other top business executives are overpaid?
Yes, but it's none of our business as long as it's not our money. But there is presumably a reason why some CEOs are paid millions: if their decisions can make the company hundreds of millions, then it's worth it. And even crappy CEOs might be cheaper to pay to leave than to have them white ant the company from within or fight a costly court battle. See Penny-wise politics (http://www.jewishworldreview.com/cols/sowell0930b08.php3) by Thomas Sowell, 30 Sept 2008.

And it's notable that the Demagogue Democrats are always demonizing overpaid CEOs, but never the far more overpaid Hollywood actors and actresses, but then they are mostly Dem shills.

Ian Murray
30-04-2009, 07:58 PM
Yet the free market means that greed can be satisfied only by serving one's fellow man, not political lobbying (as in a social(ist) democracy) or force (anarchy or communism)
Really? So the sort of corporate excesses we're talking about were actually in the service of mankind. I never would have guessed ...

You mean like a lot of Obamov's appointees, including the current overseer of the IRS?
I mean most executives who pay tax accountants to structure their affairs to avoid tax, avenues not open to wage earners

As for Geithner, the US Senate confirmed his appoitment as Treasury Sec, accepting his explanation that he followed commercial tax-return software while working overseas for the IMF (i.e. without the equivalent of our PAYG). Who knows, but senate confirmation hearings are by no means a rubber stamp.

No, to lefties, taxes are what other people pay.
No, to business high flyers taxes are what other people pay

Yes, but it's none of our business as long as it's not our money.
Where do you think the money comes from? From the end of the line, the consumer. That's us.

But there is presumably a reason why some CEOs are paid millions: if their decisions can make the company hundreds of millions, then it's worth it....
Very few of them are the founders of their companies - someone else did all the hard work. The trend now is to increase profits by shedding staff and/or using cheap labour offshore, not a particularly original idea.

Capablanca-Fan
30-04-2009, 11:28 PM
Really? So the sort of corporate excesses we're talking about were actually in the service of mankind. I never would have guessed ...
Consider the really wealthy people in history: they found ways to please lots of people with things they wanted: cars (Ford), computers (Gates), cheap groceries (Woollies, Walmart). But the political entrepreneurs became wealthy by persuading the government to use force against their competition.


I mean most executives who pay tax accountants to structure their affairs to avoid tax, avenues not open to wage earners
And they can do this because instead of a flat tax, the politicians manipulate the tax system to reward their friends and punish their enemies. So there is an incentive to try to exploit these loopholes. And increasing the tax rates will just increase this.


As for Geithner, the US Senate confirmed his appoitment as Treasury Sec, accepting his explanation that he followed commercial tax-return software while working overseas for the IMF (i.e. without the equivalent of our PAYG).
Yeah, right. But the IRS is usually far more draconian on similar mistakes. It should be a concern how many Obamov appointees were tax cheats.


Where do you think the money comes from? From the end of the line, the consumer. That's us.
In a free market, we wouldn't have to pay. Conversely, the government uses force, and this takes far more from us than the greediest businessmen, but lefties never call the government "greedy".


Very few of them are the founders of their companies — someone else did all the hard work. The trend now is to increase profits by shedding staff and/or using cheap labour offshore, not a particularly original idea.
Someone decided to pay these execs. They could be as greedy as they wanted, but unless someone was prepared to pay them, it wouldn't matter. And again, why no similamuch more than CEOs.

Ian Murray
01-05-2009, 05:43 PM
An interesting article on business morality/amorality in Eureka Street
www.eurekastreet.com.au/article.aspx?aeid=13353

Capablanca-Fan
02-05-2009, 12:08 PM
Howard blasts Rudd’s spending (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/howard_unplugged_4_rudds_stimulus_monstered/)
Andrew Bolt, 1 May 09


John Howard says Kevin Rudd is spending too much, and on giveaways that will not work. Singling out Australia, as well as Britain, he tells NRO television (http://tv.nationalreview.com/uncommonknowledge/post/?q=Nzc3ZTdkOWE0NzVmMmUwZGQwNDdhNjMwODJlNmY5Y2M=):


I worry about any government which goes too heavily into debt … They are spending too much … You are putting a burden on future generations … I’m unconvinced that a lot of this fiscal stimulus is going to add to economic activity.

And spending on cash giveaways — $23 billion worth, in Rudd’s case — is dumb:


I, for example, have real reservations about just sending cheques through the mail to each and everyone.

To start with, if I got a cheque from the government at the present time and I had a lot of debt, I wouldn’t spend it. I’d use it to pay down the debt. And that’s what we were taught by our parents. I mean, so much of what is being exhorted to people at the moment by governments all around the word is counter intuitive. When things are difficult, you conserve, you don’t go out and splash.

Howard’s alternative is what I’ve long argued here — some deficit spending, but smaller; more investment in infrastructure that makes us more productive; and deregulation. Payroll tax, anti-employment regulation, “stupid unfair dismissal laws” — “they’re the sort of things you should get rid of’’, Howard says.

The OECD has vindicated Howard's Work Choices, and pointed out that the repeal will discourage employers from hiring. But how many of the many more added to Centrelink queues will make the connection that they are there largely because of Federal Labor's discouragement of employers, and State Labor's fine on employers for hiring people (payroll tax). And Rudd has tightened up rule for young beneficiaries, so if KB didn't like Centrelink under Howard, he'll hate it even more now.

Ian Murray
03-05-2009, 09:23 AM
And they can do this because instead of a flat tax, the politicians manipulate the tax system to reward their friends and punish their enemies. So there is an incentive to try to exploit these loopholes. And increasing the tax rates will just increase this.
If that was the case, why would politicians enact legislation like the Crimes (Taxation Offences) Act to criminalise business tax avoidance like the infamous bottom-of-the-harbour schemes? It's accountants and lawyers who do the manipulating to enrich their clients.

Someone decided to pay these execs. They could be as greedy as they wanted, but unless someone was prepared to pay them, it wouldn't matter. And again, why no similamuch more than CEOs.
The company directors decide how much to pay them (and how much to pay themselves). The owners of the company, i.e. the shareholders, are not consulted.

Capablanca-Fan
03-05-2009, 11:48 AM
If that was the case, why would politicians enact legislation like the Crimes (Taxation Offences) Act to criminalise business tax avoidance like the infamous bottom-of-the-harbour schemes?
Because the politicians want only their friends to benefit from favorable tax treatment.


It's accountants and lawyers who do the manipulating to enrich their clients.
But they couldn't even try were it not for such a convoluted tax system. The LDP proposal would be much harder ton manipulate, and it wouldn't be worthwhile anyway because the tax rates are not so confiscatory and punitive.

BTW, did you see in the Courier Mail yesterday that a struggling business may have to close, with the loss of all the jobs that entails, because the greedy State Government refuses to reduce its fine on hiring people (payroll tax).


The company directors decide how much to pay them (and how much to pay themselves). The owners of the company, i.e. the shareholders, are not consulted.
If enough of them voted against it, then the pay would not have been granted. Anyone who owns shares can give their proxy votes to the Australian Shareholders Association for example. But for non-shareholders, it's none of their business.

Note that Macquarie Group, the "millionaires factory", severely cut back its executive pay after a big profit drop (NB not even a loss).

Ian Murray
03-05-2009, 12:44 PM
Because the politicians want only their friends to benefit from favorable tax treatment.
Don't be silly. The Fraser Government did not introduce the Crimes (Taxation Offences) Act to benefit the Right, with provisions like:

"5 Arrangements to avoid payment of income tax
(1) Where a person enters into an arrangement or transaction with the
intention of securing, either generally or for a limited period, that a
company or trustee (whether or not a party to the arrangement or
transaction) will be unable, or will be likely to be unable, having
regard to other debts of the company or trustee, to pay income tax
payable by the company or trustee, the person is guilty of an
offence.
(2) Where:
(a) a person enters into an arrangement or transaction with the
intention of securing, either generally or for a limited period,
that a company or trustee (whether or not a party to the
arrangement or transaction) will be unable, or will be likely
to be unable, having regard to other debts of the company or
trustee, to pay future income tax payable by the company or
trustee; and
(b) income tax becomes due and payable by the company or
trustee;
the person is guilty of an offence.
Penalty: Imprisonment for 10 years or 1,000 penalty units, or
both"

But they couldn't even try were it not for such a convoluted tax system. The LDP proposal would be much harder ton manipulate, and it wouldn't be worthwhile anyway because the tax rates are not so confiscatory and punitive.
Mabe so, but back in the real world the tax system is very complicated, which the LDP is not going to change in our two-party system. The complexity encourages accountants (not politicians) to look for loopholes.

BTW, did you see in the Courier Mail yesterday that a struggling business may have to close, with the loss of all the jobs that entails, because the greedy State Government refuses to reduce its fine on hiring people (payroll tax).
No I didn't see it, but if a business with an annual payroll of $1,000,000+ (otherwise it would be exempt payroll tax) is struggling then payroll tax is not the prime cause

Capablanca-Fan
03-05-2009, 02:18 PM
Don't be silly. The Fraser Government did not introduce the Crimes (Taxation Offences) Act to benefit the Right, with provisions like:
Of course not, because Fraser was a lefty; just an opportunist who could exploit Whitlam's disastrous rule without changing that much. Fraser brought in the notorious "children's tax" too.


Maybe so, but back in the real world the tax system is very complicated, which the LDP is not going to change in our two-party system.
Yes, their best chance is to join the Libs and try to talk sense into them, persuading them that such simplification is in line with Lib philosophy, as it is. In America, Ron Paul had far more influence after he joined the GOP than when he was in the Libertarian Party.


The complexity encourages accountants (not politicians) to look for loopholes.
So it's no accidents that tax accountants are often among those who oppose tax simplification. But it's politicians who respond to the lobbyists (the old concentrated benefits v diffused costs problem of social democracies).


No I didn't see it, but if a business with an annual payroll of $1,000,000+ (otherwise it would be exempt payroll tax) is struggling then payroll tax is not the prime cause
It's hardly too much of a stretch to think that a business could have been badly affected by the recession, pushed to the brink of making a loss, and pushed over by the extra fine on employing people. Last straw and all. A payroll tax is also a great incentive to make sure you don't hire too many people.

Ian Murray
03-05-2009, 03:18 PM
Of course not, because Fraser was a lefty...
His Treasurer at the time, responsible for the ATO, was that other well-known lefty John Howard

Capablanca-Fan
03-05-2009, 04:07 PM
His Treasurer at the time, responsible for the ATO, was that other well-known lefty John Howard
Who couldn't get good rightist policies enacted because lefty Fraser was in charge. Ironically, it took Hawke and Keating to free up the economy in directions Howard had advicated, and didn't oppose.

Ian Murray
03-05-2009, 05:35 PM
Who couldn't get good rightist policies enacted because lefty Fraser was in charge. Ironically, it took Hawke and Keating to free up the economy in directions Howard had advicated, and didn't oppose.
The Sydney Morning Herald on John Howard:
" He was ahead of his time, or at least most of his colleagues, when he moved against tax evasion and tried to clean up bottom-of-the-harbour schemes while treasurer in the Fraser Government.

He is popularly thought to have been ahead of his time in advocating a free-market economic agenda, including deregulation of the financial and labour markets and privatisation. Bob Hawke and Paul Keating introduced similar policies..."
www.smh.com.au/articles/2003/06/03/1054406193674.html

Kevin Bonham
06-05-2009, 06:50 PM
In the latest Newspoll there is a question:

[quote]If the federal government were to implement additional new stimulus packages for the economy, would you personally prefer to see the money spent on:

Cash payments to individuals: 17% (ALP 21 LNP 12)
Infrastructure: 78 (ALP 75 LNP 85)
Uncommitted 5 (ALP 4 LNP 3)

Voters are also about evenly split on whether the promised second round of tax cuts should go ahead or be cancelled to reduce the deficit. Even 50% of Coalition voters support cancelling the tax cuts!

It has been suggested that answers to the first question from some voters may not be entirely honest (may be a version of Shy Tory Effect).

Spiny Norman
07-05-2009, 06:04 AM
I got my stimulus payments yesterday. I added about 10% of my own money, and paid it straight off my mortgage. I just don't need more "stuff" that I will use for a few years, then chuck out. My mortgage is a noose around my neck, so the sooner it is gone, the better.

Capablanca-Fan
07-05-2009, 01:03 PM
I got my stimulus payments yesterday. I added about 10% of my own money, and paid it straight off my mortgage. I just don't need more "stuff" that I will use for a few years, then chuck out. My mortgage is a noose around my neck, so the sooner it is gone, the better.
I'll probably do the same when it arrives; in my case it means not moving it from the offset account.

But this "free" money will cost us in the long run (http://www.theaustralian.news.com.au/story/0,25197,25441187-601,00.html):


Finance Minister Lindsay Tanner yesterday revealed the Government was expecting to have to pay up to $3 billion a year in interest to service the debt.
I.e. $150 per year per Australian man, woman and child, just on interest. And even if every one of these had been given the $900, which of course they haven't, think of the reverse: investing $900 at a 17% pa interest rate would be an extremely good deal for the investor.

TheJoker
07-05-2009, 02:20 PM
the old concentrated benefits v diffused costs problem of social democracies.

It also one of the key benefits of the system, for example in healthcare, where expensive medical treatment costs can be difussed similar to private insurance. The difference of course being that government programs need to service all customers not just profitable ones.

All socialised institutions whether private insurance, publically listed companies or government programs are liable to abuse from those that extract undue benefits. Government has the additional burden of free-riders (non-tax payers extracting benefits). Unethical use of funds is common in both private and public systems. In fact public systems in developed countries are often far more accountable, due to the large range of stakeholder and media scrutiny.

However, the spillover benefits can outweigh the costs as in publically funded health and education that increase long-term productivty.

It's not really a problem but rather a trade-off. Most agree the trade-off is overall more beneficial than it is costly.

TheJoker
07-05-2009, 02:46 PM
I'll probably do the same when it arrives; in my case it means not moving it from the offset account.

Debt minimisation is logical and helpful in the long-term. Less interest will be paid now that the has been "transferred" to the government. Since the government is likley to borrow funds at a much lower rate than your mortage rate.


I.e. $150 per year per Australian man, woman and child, just on interest.

$2.89 a week, less than the price of a can of soft drink or a coffee. So the interest bill isn't going to break the bank. More importantly is cost of actually repaying the debt (interest and principle). How much that will cost will depend largely on circumstance.

Whether its worth it remains to be seen. The ABS is reporting a decrease in the unemployment rate (with 49,000 more full-time jobs), but most economists are skeptical of the latest figures predicting that unemployment will continue to climb.


think of the reverse: investing $900 at a 17% pa interest rate would be an extremely good deal for the investor.

Where can you get 17% pa return without significant risk?

Capablanca-Fan
07-05-2009, 02:58 PM
It also one of the key benefits of the system,
Not at all: it shows how a democracy where the govermnent is heavily involved in the economy can cause overall costs to the population to the benefit of a few. And ironically, it's usually lefties who whinge about equality that support the very government intervention that produces this sort of corrupt inequality (http://www.humanevents.com/article.php?id=25347).


for example in healthcare, where expensive medical treatment costs can be difussed similar to private insurance. The difference of course being that government programs need to service all customers not just profitable ones.
:lol: :lol: :lol: :lol: :lol: :lol: :lol:
Not at all. Many countries with socialized medicine rationing, which really does mean that older patients or those requiring expensive treatment miss out. Or there is soft rationing via huge waiting lists., which seem to get longer despite more money thrown at it, as in Canada (http://www.nationalpost.com/story.html?id=aedb5f98-a4d1-4b0e-a936-031ef0b9aa23&p=1). At least Canadian patients who can afford it can go to the US (http://www.creators.com/opinion/john-stossel/-socialized-medicine-is-broken-and-can-t-be-fixed.html). Non-human patients have no such problem and can get immediate care, since veterinary services are not run by government. In the socialist paradise of Sweden, they really put into practice Churchill's point that the virtue of socialism is equal sharing of misery, by disallowing a patient to pay for life-saving treatment out of his own pocket (http://townhall.com/columnists/WalterEWilliams/2009/03/04/swedens_government_health_care)!


All socialised institutions whether private insurance, publically listed companies or government programs are liable to abuse from those that extract undue benefits. Government has the additional burden of free-riders (non-tax payers extracting benefits). Unethical use of funds is common in both private and public systems. In fact public systems in developed countries are often far more accountable, due to the large range of stakeholder and media scrutiny.
People will be more scrutinous about their own money than someone else's.

Capablanca-Fan
07-05-2009, 03:05 PM
Debt minimisation is logical and helpful in the long-term.
We agree.


Less interest will be paid now that the has been "transferred" to the government. Since the government is likley to borrow funds at a much lower rate than your mortage rate.
Good point. All the same, this would apply to tax cuts that went towards a mortgage.


$2.89 a week, less than the price of a can of soft drink or a coffee.
OK, if you want to argue that way, then $900 is $17.31 a week, or a couple buying 1 Subway footlong each once a week.


So the interest bill isn't going to break the bank. More importantly is cost of actually repaying the debt (interest and principle). How much that will cost will depend largely on circumstance.
Well, they are claiming about 6 years to pay it back. But it would probably wait till the next Coalition government.


Whether its worth it remains to be seen. The ABS is reporting a decrease in the unemployment rate (with 49,000 more full-time jobs), but most economists are skeptical of the latest figures predicting that unemployment will continue to climb.
But Rudd promised $75,000 new jobs with the first "stimulus".


Where can you get 17% pa return without significant risk?
Exactly! But the government policy is the reverse of a hypothetical risk-free 17% pa return, which follows that it's an appalling investment.

TheJoker
07-05-2009, 03:42 PM
But Rudd promised $75,000 new jobs with the first "stimulus".

I am not interested in measuring the stimulus against political promises (because its usually a waste of time), but rather cost-benefit. It will be intersting to see what happens in similar economies that have lower levels of fiscal stimulus.


Exactly! But the government policy is the reverse of a hypothetical risk-free 17% pa return, which follows that it's an appalling investment.

In the immortal words of Pauline "please explain?"

TheJoker
07-05-2009, 04:03 PM
Not at all: it shows how a democracy where the govermnent is heavily involved in the economy can cause overall costs to the population to the benefit of a few.

Which is excellent if those receiving the benefits are in genuine need, and in supply them these benefits it increases their productive capabilities. It is only bad when these benefits are unethically distributed.


Not at all. Many countries with socialized medicine rationing....Canadian patients who can afford it can go to the US.

We've covered this before research shows they only go for elective procedures. Of course I prefer a system that priortises emergency healthcare for all, over elective procedures for an elite few. But that is a personal preference. I definately wouldn't use the US health system as a model for anybody.


Non-human patients have no such problem and can get immediate care, since veterinary services are not run by government.

How many non-human patients die (or are "put to sleep") because of treatable medical conditions that are too costly! A fundamental flaw in your analysis.



People will be more scrutinous about their own money than someone else's.

Exactly and everbody has a share in the government, including those with the capability to access and evaluate the use of that money. That is why the budget will undergo such a thorough analysis compared to the analysis of any corporate budgets (if such budgets are even made publically available to shareholders).

Basil
07-05-2009, 04:34 PM
It will be intersting to see what happens in similar economies that have lower levels of fiscal stimulus.
You might be interested. I won't as the results will be meaningless. Again there are too many other factors including Australia's relative insulation which means apples can't be compared with apples.

You can be sure Rudd will compare against anything remotely able to fudge the issue such as yesterday's offering that Australia's economy's nett debt is less than any other large western economy. Misleading dribble. Australia's economy is a piddling size and probably sits at the bottom of the table he's offering so no wonder that its NETT debt is likely smaller. However the six o'clock mums and dads would have soaked that up and gone back to bed while the murder of continues.

Look, can we get me a slot for 5 minutes on national tele every day. It might help bogans people a real lot! Especially if they've got dad and their brother dribbling poop in their ear.

TheJoker
07-05-2009, 05:09 PM
You might be interested. I won't as the results will be meaningless. Again there are too many other factors including Australia's relative insulation which means apples can't be compared with apples. .

You are right a broad comparision might not be applicable, but certain sectors might be able to be compared to some degree. Particulary if less insulated countries with lower fiscal stimulus have similar economic trends, it could well point to the fact that the stimulus didn't work.



You can be sure Rudd will compare against anything remotely able to fudge the issue.

He is a politican that's what they do. I won't be taking much note of government analysis, but rather third party analysis.


such as yesterday's offering that Australia's economy's nett debt is less than any other large western economy. Misleading dribble. Australia's economy is a piddling size and probably sits at the bottom of the table he's offering so no wonder that its NETT debt is likely smaller. However the six o'clock mums and dads would have soaked that up and gone back to bed while the murder of continues.

I suspect he wasn't referring to net debt as a percentage of GDP which would be correct:

CIA World Factbook Public Debt (% GDP) Rank (https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html)

So it wasn't really misleading dribble. In fact your post was the misleading dribble (that could have been avioded with a simple fact check). But your point is valid politicians can and will mislead the public with a false use of statistics.



Look, can we get me a slot for 5 minutes on national tele every day. It might help bogans people a real lot! Especially if they've got dad and their brother dribbling poop in their ear.

I don't think two lots of opposing dribble will result in informed opinions. ;)

It hasn't worked on this BB anyway:lol:

Basil
07-05-2009, 05:46 PM
In fact your post was the misleading dribble (that could have been avioded with a simple fact check).
Wrong. (http://www.theaustralian.news.com.au/story/0,25197,25437297-12377,00.html) What fact check are you fantasising that I should have made?
And your conclusion is wrong (re:dribble).

I was correcty both as to the facts of my claim (that Rudd was referring simply to nett debt, and of course the nett debt is small coz Strine is small) and as to Rudd's weasel (the second you have agreed to).

Now please have the grace to acknowledge this and avoid doing a Barry and blowing the whole thing up with obfusacation (and derailing the thread).

Capablanca-Fan
07-05-2009, 06:42 PM
Whether its worth it remains to be seen. The ABS is reporting a decrease in the unemployment rate (with 49,000 more full-time jobs), but most economists are skeptical of the latest figures predicting that unemployment will continue to climb.
Even the überlefty Coalition-hating (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/abc_to_turnbull_be_fairer_to_rudd/) Layba-loving ABC has doubts (http://www.abc.net.au/news/stories/2009/05/07/2563675.htm):


A surprising fall in the unemployment rate for April is being blamed on a statistical anomaly…


NAB chief economist Alan Oster says it is another sign of the economy’s relative strength. [And why was that? How about strong Coalition economic management that navigated through the Asian Financial Crisis, Tech Wreck and 11-9, and turned Australia from heavy debt to healthy surplus? — Jono] But he says the figures must be treated with caution after funding cuts at the Australian Bureau of Statistics reduced the quality of its data....The better than expected result has not prompted him to change his unemployment forecast. He is still expecting the jobless rate to come close to 8 per cent by late next year.

JP Morgan economist Helen Kevans agress.


“It is a big surprise. We’re really taking it with a grain of salt,” Ms Kevans said.

TheJoker
08-05-2009, 03:50 AM
Wrong. (http://www.theaustralian.news.com.au/story/0,25197,25437297-12377,00.html) What fact check are you fantasising that I should have made?
And your conclusion is wrong (re:dribble).

I was correcty both as to the facts of my claim (that Rudd was referring simply to nett debt, and of course the nett debt is small coz Strine is small) and as to Rudd's weasel (the second you have agreed to).

Now please have the grace to acknowledge this and avoid doing a Barry and blowing the whole thing up with obfusacation (and derailing the thread).


Firstly, any idiot that has done high school economics knows that comparision of net debt between to nations is done as a % of GDP. I'll acknowledge he didn't specifically say "as a % of GDP" (even though it is obviously implied)

However, It's small no matter how you want to measure it (absolute or as a % of GDP). So how is that a weasel?

Your statement that implies the net debt is only small if you measure it absolute terms and not as a % GDP (thus the so-called weasel) is still dribble.

So let's agree on this Australia's net debt is small no matter how you measure it. Therefore there was no weasel. You would have known if you'd bothered to check.

TheJoker
08-05-2009, 03:59 AM
Even the überlefty

If labour are smart they'll also be cautious about claiming anything. Since the numbers could take a sharp turn next reporting period (at least according to most analysts)

Basil
08-05-2009, 11:17 AM
Firstly, any idiot that has done high school economics knows that comparision of net debt between to nations is done as a % of GDP. I'll acknowledge he didn't specifically say "as a % of GDP" (even though it is obviously implied)

However, It's small no matter how you want to measure it (absolute or as a % of GDP). So how is that a weasel?

Your statement that implies the net debt is only small if you measure it absolute terms and not as a % GDP (thus the so-called weasel) is still dribble.
Bullshit! Nett debt is presented a monetary sum. A single figure. Relative to nothing.

When I googled, the first country I came across was Canada's definition of net debt:
The “net debt,” measured according to the accounting principles used in the public accounts, represents the difference between gross liabilities and the financial assets held by a government. The public accounts of governments in Canada are generally calculated according to accrual accounting methods.
http://www.parl.gc.ca/information/library/PRBpubs/prb0641-e.htm

And certainly should be read as such in the absence of any statement to the contrary.

What a fu**ing weseal you are - a double weasel. Yu were given a pefectly good opportunity to back out with grace. What the hell the has gone wrong with the board recently where bare-faced bullshit weasels are the order of the day. Have you people caught 'Rudd's expedient bullshit disease' hoping that in the face of pants down you can convince half the people half the time?

So far, you've tossed in
-- An elementary school jibe
-- A claim that I should check my facts - twice!!
-- An accusation of dribble

And you're wrong! A couple of days ago we had Barry the Obfuscating Haymaker covering a cock-up and a week ago Mephisto's hypocrisy covered with a similar haymaker!

What happened to the old days when people just copped to it? :hand:

Rincewind
08-05-2009, 11:24 AM
Barry the Obfuscating Haymaker covering a cock-up

That is just a silly piece of wishful thinking on your part, Gunner.

You got your arse kicked and must still be smarting despite your claims to the contrary.

Basil
08-05-2009, 11:37 AM
That is just a silly piece of wishful thinking on your part, Gunner.

You got your arse kicked and must still be smarting despite your claims to the contrary.
:lol:

TheJoker
08-05-2009, 01:24 PM
Bullshit! Nett debt is presented a monetary sum. A single figure. Relative to nothing.:

Correct


And certainly should be read as such in the absence of any statement to the contrary.

A statement such as a comparision between countries, in which case debt is almost always measured as a % of GDP. (i.e. the context in which the statement was made)

CIA (https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html)

OECD (http://titania.sourceoecd.org/vl=3656836/cl=23/nw=1/rpsv/factbook2009/10/01/02/10-01-02-g1.htm)

Wiki (http://en.wikipedia.org/wiki/List_of_countries_by_public_debt)

More importantly you've failed the address the real arguement; you implied that Rudd was misleading people about net debt because it was only small due to us having a small size economy

Do you admit this is incorrect since our net debt is not only small in absolute terms but also small relative to size of our economy?



What a fu**ing weseal you are - a double weasel. You were given a pefectly good opportunity to back out with grace.

Why would I when I have a perfectly sound arguement.




So far, you've tossed in
-- An elementary school jibe
-- A claim that I should check my facts - twice!!
-- An accusation of dribble
.

And I stand by every bit of it.


And you're wrong! A couple of days ago we had Barry the Obfuscating Haymaker covering a cock-up and a week ago Mephisto's hypocrisy covered with a similar haymaker!

Kettle met pot.

Basil
08-05-2009, 04:41 PM
Correct
Thank you.

As for those lists you put up, how can you do that with a straight face? You've gone and found some lists that chose to illustrate debt as a percentage of GDP and then tried to argue that
a) this is a normal way of presenting net debt (which it isn't), and also
b) this is what Rudd meant (when he didn't) :hand:


More importantly you've failed the address the real arguement; you implied that Rudd was misleading people about net debt because it was only small due to us having a small size economy
Not only will you find that I have addressed it, but also that you have missed a second finesse.

It is Rudd that put the caveat of "advanced major economies". His calming statement may be true but hardly earth-shattering. The point is, at first blush, the easily led will think 'oh that's not so bad then' even though the relationship of the size of our debt (as a piss ant economy) to other major advanced economies is all but meaningless. But like most obfuscating specialists :eek: he knows full well that sufficient confusion, cloud and tune-out will be created to neutralise most interest in the matter.

Rincewind
08-05-2009, 05:56 PM
:lol:

Laugh all you like Gunner, but if you were really over it there would have been no reason for you to have another little whinge about it. Perhaps I ought to check your posts in other threads like this one that I only occasionally glance at, in case you are whinging about me in those too.

Hint: If you want to whinge in Wall to Wall Labor, I probably won't see it.