Obama fans have had their adrenaline rush, now it's my turn to have mine

[Keith009]

Well, given how the surplus is being splurged into nothingness, I suspect the annual rounds of tax cuts of the last few years will become just a memory.

Well, I thought the economic stimulus package which saw a constructive investment in people and infrastructure, rather than on bailing out inefficient and failing institutions, was a rather smart response to a severe global economic crisis.

 

[drron]

Well, I thought the economic stimulus package which saw a constructive investment in people and infrastructure, rather than on bailing out inefficient and failing institutions, was a rather smart response to a severe global economic crisis.

Thats if you believe any government knows what to do or indeed has any idea what has caused the crisis.
I just find it amusing that most experts seem to agree that we have a bursting of a bubble created by too easy credit and what do we do to fix it?Why lower interest rates to make the supply of credit easier.
The infrastructure program is based on FDRs New Deal which was meant to have fixed the problems due to the 29 crash.However the evidence doesnt stack up.First Herbert Hoover had already embarked on infrastructure spending(eg the Hoover dam) and secondly the share market didnt hit its final low until 1942.Now what happened to the US at the end of 1941 that may have stimulated the economy?Well it sure wasnt the New Deal.

 

[JohnK]

Well, I thought the economic stimulus package....

What economic stimulus package? I hate to say it but I would rather have the other side back in power.

Well, given how the surplus is being splurged into nothingness, I suspect the annual rounds of tax cuts of the last few years will become just a memory.

Perhaps the surplus should have been splurged on propping up the AUD. I mean let's get our priorities in order. Who cares how much interest we pay on our home loans. Status and SCs are much more important. :-|

 

[Keith009]

Thats if you believe any government knows what to do or indeed has any idea what has caused the crisis.

I get the feeling that it's mainly psychological in Australia, that a lot of the times we're talking ourselves into a recession.

 

[Keith009]

What economic stimulus package? I hate to say it but I would rather have the other side back in power.

[ALP hack]
The $10.4 billion package announced in October which was designed to strenghten our economy in the face of the most catasthropic economic crisis since the Great Depression. By handing money back to people who need it most (eg first home buyers), the package is designed for Australians to spend our way out of the crisis with v specific sectors targetted (eg the housing market). Money in hand to spend is money that will work for everyone's good.

History has shown that Labor governments have been more adept at managing the economy than Coalition governments. The previous government had such a good run with the economy due to, quoting God in human form partially, the remarkable franchise left to them after the reforms and innovations of the Hawke/Keating governments which Howard/Costello have then run with no contributions of their own other than the GST. [/ALP hack]

 

[serfty]

[ALP hack] ... [/ALP hack]

Hmmm ... straight from Kev '07 's little red book

 

[drron]

[ALP hack]
The $10.4 billion package announced in October which was designed to strenghten our economy in the face of the most catasthropic economic crisis since the Great Depression. By handing money back to people who need it most (eg first home buyers), the package is designed for Australians to spend our way out of the crisis with v specific sectors targetted (eg the housing market). Money in hand to spend is money that will work for everyone's good.

History has shown that Labor governments have been more adept at managing the economy than Coalition governments. The previous government had such a good run with the economy due to, quoting God in human form partially, the remarkable franchise left to them after the reforms and innovations of the Hawke/Keating governments which Howard/Costello have then run with no contributions of their own other than the GST. [/ALP hack]

Now Keith I am going to excuse you because you are too young to know.
You probably havent heard about a fellow called Mr. Scullin-ALP pm who got kicked out in 1931 because the public didnt believe the ALP was the better manager.
Even your light on the hill man Ben chifley got kicked out in 1949 over bank nationalisation.The public just wouldnt trust the ALP with the management of the banks.
1961 and your lot couldnt get rid of Old Ming despite a good ole credit squeeze.
1975-yes your alternate god old EGW himself-got well and truly turfed because of the appalling handling of the economy.
The better managers bit is a saying of that consumate politician Paul Keating.He managed the early 90's recession so well I was able to invest in NSW State Rail Bonds at 19.5% interest.As even a NSW ALP figure noted Paul suffers from the limelight deprivation syndrome.
Sorry mate but history does not support your theory.

 

[coco50]

Hey how come i didnt see you in NYC-I was outside Lehmans then too.
I agree the choice of Hilary is good but does it make up for the scary VP-should have seen the bloopers he made during the campaign-and he promises to be a hands on VP.

I looked, drron, but there were too many people. I was with my daughter who works in the finance industry in NYC. Fortunately they source their funds externally and buy US infrastructure. Maybe there will be some bargains for her to buy. I think Biden was there to make up for Obama's inexperience in Foreign Policy. He was less of a liability than the hockey mom. I thought Biden did OK in the VP debate vastly outpointing Palin. She was not the barracuda that McCain claimed the following day. More a pilchard!!

 

[Keith009]

Now Keith I am going to excuse you because you are too young to know.
You probably havent heard about a fellow called Mr. Scullin-ALP pm who got kicked out in 1931 because the public didnt believe the ALP was the better manager.
Even your light on the hill man Ben chifley got kicked out in 1949 over bank nationalisation.The public just wouldnt trust the ALP with the management of the banks.
1961 and your lot couldnt get rid of Old Ming despite a good ole credit squeeze.
1975-yes your alternate god old EGW himself-got well and truly turfed because of the appalling handling of the economy.
The better managers bit is a saying of that consumate politician Paul Keating.He managed the early 90's recession so well I was able to invest in NSW State Rail Bonds at 19.5% interest.As even a NSW ALP figure noted Paul suffers from the limelight deprivation syndrome.
Sorry mate but history does not support your theory.

Well, good ol Fraser himself (isn't too popular with many Liberals these days going by the vitriol that I occassionally bear witness to) didn't last v long due to the recession of '82. That is despite several years of expansion prior. The reality is governments on both sides have been turfed out by recessions and perceptions of economic mismanagement. I don't think the constitutional issues at that time did much damage to Fraser's credbility or he wouldn't have been voted in after the spill.

You're also ignoring the fact that despite the recession that we absolutely had to have, the ALP transformed and revitalised a once highly protected and deeply uncompetitive economy during the Hawke and Keating (it is not v often that a Labor politician has earned such deep albeit secret admiration from hacks of the other side, as confessed over one too many coughtails) era which has ensured the dynamic Australian economy that we see today. The ALP is the party which:
- Floated the dollar (remember a low AUD ain't necessarily a bad thing, and a high AUD isn't necessarily a good thing)
- Abolished trade tariffs and reduced protectionism
- Deregulated the financial system
- Deregulated the industrial relations system, and torn down a deeply rigid and inflationary wage structure
- Reduced the size of the welfare state, moving it from one which is a handout to one which is a hand up

In short, the ALP is responsible for the greatest economic legacy left by an Australian government, an economy that is open and vibrant rather than closed and protected. Allowing the Coalition to ride on these achievements to 4 consecutive election wins, with virtually no contributions of their own other than the GST and sheer luck, and of course the acumen that would have been required of any reasonable person in their positions anyway.

The main reason why the ALP seems to have lost ground on the economic argument is poor PR management of the 90s which saw Labor operators, to their utter shame and disgrace, distancing the party from the remarkable achievements of the Hawke and Keating era.

 

[drron]

Interesting response mate but as has been said dont read straight from the little red book.Now deregulated economy-isnt that what Kevin and Wayne are saying has caused the current crisis-so you are saying they are really blaming PK himself because if you are right that Costello did nothing then obviously we owe Paul another big raspberry.
Of course Malcolm is unpopular with some Liberal hacks as he is an old fashioned small l liberal.But I have met Malcolm on a number of occasions and even though he was out of politics the first telegram i got on my preselection was from malcolm-so depends on who you ask.
So I presume you were also a fan of the deficits PK ran-are you telling Wayne this is the way to go now.

 

[Keith009]

Interesting response mate but as has been said dont read straight from the little red book.Now deregulated economy-isnt that what Kevin and Wayne are saying has caused the current crisis-so you are saying they are really blaming PK himself because if you are right that Costello did nothing then obviously we owe Paul another big raspberry.
Of course Malcolm is unpopular with some Liberal hacks as he is an old fashioned small l liberal.But I have met Malcolm on a number of occasions and even though he was out of politics the first telegram i got on my preselection was from malcolm-so depends on who you ask.
So I presume you were also a fan of the deficits PK ran-are you telling Wayne this is the way to go now.

What PK did was most appropriate for his time in transforming the economy. But the economy is ever changing over time. PK himself did warn Costello and Howard about the ballooning trade and accounts deficits when the previous govt embarked on a short term strategy of borrowing our way into prosperity, and when I said they've not contributed anything that's one of many examples.

The idea that any budget deficit is a bad thing is a con. Deficit spending is not a bad thing in so far as it supports infrastructural investment which is in turn designed to encourage economic activity, and is hence for the long term viability of the economy. It does not necessarily signal a fiscal crisis. In the current context it is necessary to give the economy a boost by spending the surplus on an economic stimulus. Just a few days ago Glenn Stevens of the RBA has actually come out in support of deficit spending and warned that attempting to avoid budget deficits will do more harm than good to the economy. And by the looks of it the incumbent PM of Canada Stephen Harper, big notorious Leftist that one , seems to agree with me. Now that's hardly someone reading from the little red book is it?

If I was reading from the little red book I wouldn't be disagreeing with so much of my party's current politices on foreign relations. I disagree with Rudd's opposition to the War of Liberation in Iraq for instance. And if I or any of my counterparts read from the little red book, we also wouldn't constantly debate with each other on campaign strategies and tactics, and how best to sell the Labor brand.

 

[drron]

Well just look at a few facts and contrast PK to JH as treasurers.Most economists agree that the early 80's recession was more severe than the early 90's recession.The eighties recession in Australia was also affected by a drought.
Peak unemployment 80s-10.4%,90s-11.2%
Underemployment 80s-4%,90s-7%
Peak housing loan rates 80s-13.5%,90s-17%
PK doesnt come of well does he?
Housing loan rates in December 1972-7%,when did they next get to 7%-August 1997-6.7%.
Do you believe PKs deficits really were on infrastructure.Interesting view on history.

 

[Keith009]

Well just look at a few facts and contrast PK to JH as treasurers.Most economists agree that the early 80's recession was more severe than the early 90's recession.The eighties recession in Australia was also affected by a drought.
Peak unemployment 80s-10.4%,90s-11.2%
Underemployment 80s-4%,90s-7%
Peak housing loan rates 80s-13.5%,90s-17%
PK doesnt come of well does he?
Housing loan rates in December 1972-7%,when did they next get to 7%-August 1997-6.7%.
Do you believe PKs deficits really were on infrastructure.Interesting view on history.

For a start, let's not compare stats. Let's compare government decisions. And the fact is Hawke/Keating embraced reform. Howard/Costello half-heartedly pursued it, for instance Workchoices far from being deregulation actually ended up centralising lots of power in Canberra and created a whole new bureaucracy for both workers and businesses. Leaving aside arguments of whether the idea of GST is good for the economy or not, the way Howard/Costello has implemented it has made it the biggest tax since the income tax. It did its job in replacing a whole range of nuisance taxes but they were nothing like the nice little earner the GST has been. And that $44.4B tax was in fact their biggest "reform." So the Liberal Party spoke the language of the free market and reform, but in fact enacted socialism.

And the view that govt decisions or activity are sole determinants of economic statistics like unemployment, the GDP etc is fallible. Govt is a small percentage of our economy and should be smaller. Except for the socialist schemes of the Howard govt like the Futures fund, the best investment in Australia's future is to hand people back their money and not have committees and bureaucrats administer it. I would also note their shameful failure to sell Aust Post. It often takes a Labor govt to confront the serious need to reform. And tax reform is now urgently needed than ever before.

It is too much of a lazy summer's day to analyse each of your stats, but one thing immediately jumps up - whilst notional interest rates were higher under Hawke/Keating, the percentage of debt servicing of income soared to unprecedented heights under Howard as many people geared up like never before to borrow to buy homes. Again prompted to do so by Howard's socialist policies like the First Home Buyers' schemes and other market distorting policies. It is above all worth noting that why interest rates never got past 13.5% was because of govt regulation preventing it from doing so and not sound economic management. And the effects were disastrous. It's led to the rationing of money and meant home loans only went to those with the best connections, friends of bank managers etc.

Unemployment is of course a measure of economic activity. Goes down during a boom, and up during a bust. But like what I'd tried to allude to earlier when I mentioned that people are often inspired by "perceptions" of economic mismanagement in deciding who to vote for, do we really imagine that govts are the sole cause of booms and bust? They clearly play a role but what both sides of politics have managed to agree is that the RBA should set the official cash rate with a view to minimisting unemployment and inflation. We let the market decide the cost of money beyond that. Whilst official rates have come down, credit cards and personal loans and other types of bank products with high levels of default have not come down at all. That fact is playing a significant role with the retail crash we're having atm.

I need another drink...

 

[drron]

"The $10.4 billion package announced in October which was designed to strenghten our economy in the face of the most catasthropic economic crisis since the Great Depression. By handing money back to people who need it most (eg first home buyers), the package is designed for Australians to spend our way out of the crisis with v specific sectors targetted (eg the housing market). Money in hand to spend is money that will work for everyone's good."
So when by Krudd financing first home owners is a good idea even though there is a risk that property prices may go down and this initiative may see them burned badly.
"Again prompted to do so by Howard's socialist policies like the First Home Buyers' schemes and other market distorting policies."
But if the Libs dare do it it is totally wrong.

 

[Keith009]

When we get down to debating the finer points of rhetoric like that, I think it's time to agree to disagree.

 

[drron]

When we get down to debating the finer points of rhetoric like that, I think it's time to agree to disagree.

Absolutely-besides no one else is probably looking at this thread now!

 

[serfty]

I was having an AFF free evening last night but had a little trouble getting to sleep. This thread would have fixed that!!!

 

[JohnK]

Absolutely-besides no one else is probably looking at this thread now!

I was looking. Some good points raised from both sides.

And by the way QF009 a low AUD is one of the worst things that can happen in more ways than one can imagine and not just affecting the frequent traveller either....

 

[oz_mark]

[ALP hack]
The $10.4 billion package announced in October which was designed to strenghten our economy in the face of the most catasthropic economic crisis since the Great Depression. By handing money back to people who need it most (eg first home buyers), the package is designed for Australians to spend our way out of the crisis with v specific sectors targetted (eg the housing market). Money in hand to spend is money that will work for everyone's good.

History has shown that Labor governments have been more adept at managing the economy than Coalition governments. The previous government had such a good run with the economy due to, quoting God in human form partially, the remarkable franchise left to them after the reforms and innovations of the Hawke/Keating governments which Howard/Costello have then run with no contributions of their own other than the GST. [/ALP hack]

Looking at it now, did the fiscal stimulus package achieve anything other then blowing the budget?

 

[JohnK]

Looking at it now, did the fiscal stimulus package achieve anything other then blowing the budget?

Yes. It will pay for my green slip, registration and insurance this week.

Seriously though I think you are right. A fiscal stimulus package was not going to stop the global economic crisis affecting Australia. We are in for some tough times ahead and it is time to tighten the belt....