Congratulations Australia - You are not in a recession

[Conza88]

Thanks TH!
This is good news but the doomsayers are ready with "Yeah, but..."
Here they come now LOL

Here I am! With my bag of reality in tow! I come forth with the words of wisdom from the people who actually forewarned of the crisis as early as 2002 & every depression since the FED was implemented in 1913.

It helps when you have the correct theory - Austrian Economics... and all everyone else has, is but a fist full of fallacies.

America's Great Depression by Murray N. Rothbard

THE FISCAL BURDENS OF GOVERNMENT​

In the pleasant but illusory world of “national product statistics,” government expenditures on goods and services constitute an addition to the nation’s product. Actually, since government’s revenue, in contrast to all other institutions, is coerced from the taxpayers rather than paid voluntarily, it is far more realistic to regard all government expenditures as a depredation upon, rather than an addition to, the national product.

In fact, either government expenditures or receipts, whichever is the higher, may be regarded as the burden on private national product, and subtraction of the former figure from Gross Private Product (GPP) will yield an estimate of the private product left in private hands. The ratio of government depredation (government expenditures or receipts, whichever is the higher) over Gross Private Product yields the approximate percentage of government depredation of the private product of the economy. [21]

In a depression, it is particularly important that the government’s fiscal burden on the economy be reduced. In the first place, it is especially important at such a time to free the economy from the heavy load of government’s acquiring resources, and second, a lowering of the burden will tend to shift total spending so as to increase investment and lower consumption, thus providing a double impetus toward curing a depression. pg. 291

[21]Generally, government expenditures are compared with Gross National Product (GNP) in weighing the fiscal extent of government activity in the economy. But since government expenditure is more depredation than production, it is first necessary to deduct “product originating in government and in government enterprises” from GNP to arrive at Gross Private Product. It might be thought that total government expenditures should not be deducted from GPP, because this involves double counting of government expenditures on bureaucrats’ salaries (“product originating in government”).

But this is not double counting, for the great bulk of money spent on bureaucratic salaries is gathered by means of taxation of the private sector, and, therefore, it too involves depredation upon the private economy. Our method involves a slight amount of overcounting of depredation, however, insofar as funds for government spending come from taxation of the bureaucrats themselves, and are therefore not deducted from private product. This amount, particularly in the 1929–1932 period, may safely be ignored, however, as there is no accurate way of estimating it and no better way of estimating government depredation on the private sector.

If government expenditures and receipts are just balanced, then obviously each is a measure of depredation, as funds are acquired by taxation and channelled into expenditures. If expenditures are larger, then the deficit is either financed by issuing new money or by borrowing private savings. In either case, the deficit constitutes a drain of resources from the private sector. If there is a surplus of receipts over expenditures then the surplus taxes are drains on the private sector. For a more extended discussion, and a tabulation of estimates of these figures for the 1929–1932 period, see the Appendix.​

Now, if you want to lose all your money - buy ALL means put it back into the Stockmarket. Seriously... I'll bump this beauty when the time comes and we can all gather around the camp fire and laugh at those delusional enough to believe the propagandists and intellectual wh0re's of the State.

 

[Knobby22]

Rudd's stimulus package has meant that very few people have had to be made redundant. It has definitely has had an effect in my work.

Because most people have kept their jobs the downturn has not bit too hard, property prices have not dropped much, spending has essentially continued.

It therefore appears Rudd has ameliorated the worst effects of the recession in Australia while the US, GBR and Europe are a mess. As a swinging voter you have to say that Labor deserve congratulations in this and the comments bagging Rudd for succeeding show a lack of balance and a trace of being a sourpuss.

 

[Bushman]

Yep, have been mentally groaning at this thought all afternoon.


Sums up my thoughts too, Bushman.
So irritating that the electorate largely seems unable to figure this out.

Have to say you're becoming very cynical.

LOL; frustrated at the vested interests that sees us replacing private debt with public debt without any tangible benefit. The Aussie version of 'fiscal stimulus' was reactionary at best.

 

[MrBurns]

Its official. We are not in a "technical" recession of 2 quarters of negative growth.

GPD at 0.4. for Q1 quarter

Thats great the unemployed and bankrupts will be overcome with joy

 

[Trembling Hand]

Now, if you want to lose all your money - buy ALL means put it back into the Stockmarket. Seriously... I'll bump this beauty when the time comes and we can all gather around the camp fire and laugh at those delusional enough to believe the propagandists and intellectual wh0re's of the State.

Just LOL

What a joke. While the cowards hide behind their Austrian bagels wrapped up in theories the real smart players are running with the opportunities.

Lose all your money!! Oh Please. You ever seen one of these??

 

[nunthewiser]

EXCELLENT

three cheers for mr rudd


cmon burnsie you can be our pin up cheerleader squad leader

" rudd rudd your the best , your the greatest , fark the rest "

i can see it now , julia and burnsie bouncing around with there pom poms at the airport wishing our great leader well

 

[Some Dude]

*grabs large wooden stirring stick*

So I guess those Labour election adverts with Lawrence Springborg saying "We aren't in a recession". and the labor voice overs going "Yeah right he doesn't have a clue.".....were just a golden example of the noble profession of politics at it's best. *blarg*

LOL.. very astute sir!

 

[Conza88]

Just LOL

What a joke. While the cowards hide behind their Austrian bagels wrapped up in theories the real smart players are running with the opportunities.

Lose all your money!! Oh Please. You ever seen one of these??

Hahah, the last part was edited in and all in jest.

Thanks for addressing the only thing I posted with no substance.

Now how about the real material? You know 90% of the post?

 

[Happy]

Its official. We are not in a "technical" recession of 2 quarters of negative growth.

GPD at 0.4. for Q1 quarter

Deferred to the time when money borrowed for the stimulus will have to be paid back.

Looks good today, only

 

[MRC & Co]

Deferred to the time when money borrowed for the stimulus will have to be paid back.

Looks good today, only

But experts have been talking about the deficit and it's payback literally, for decades (even in the 80s) until economic theorists stated "perhaps a huge deficit is not bad if you are achieving economic growth". Perhaps there are truths in both elements (the US would not be where it is today if it were not for debt and excess consumption).

Of course it has to revert at some point, but where will this be? That is the key and if Soros himself couldn't predict it, then nobody stands a chance IMO. Just have to take opinions and trade them as best as price permits.

 

[Trevor_S]

Here I am! With my bag of reality in tow! I come forth with the words of wisdom from the people who actually forewarned of the crisis as early as 2002 & every depression since the FED was implemented in 1913.

You seem interested in history, so I thought this article poignant

http://online.wsj.com/article/SB123981155929121475.html

These guys are still alive and were in "the market" during the great depression... so perhaps their experience is worthy of at least a read ?

Now, if you want to lose all your money - buy ALL means put it back into the Stockmarket. Seriously...

This sentiment summed up my feelings I guess (albeit at odds with many on here.)

"Investors have no reason to feel bearish," he says. "True value investors are glad the markets are down."

and by no means do I or have I ever "had it all" in the Stockmarket.

 

[nunthewiser]

EXCELLENT

three cheers for mr rudd


cmon burnsie you can be our pin up cheerleader squad leader

" rudd rudd your the best , your the greatest , fark the rest "

i can see it now , julia and burnsie bouncing around with there pom poms at the airport wishing our great leader well

oh cmon guys .not even a bite ???

i was joking by the way

 

[MrBurns]

oh cmon guys .not even a bite ???

i was joking by the way

I've been out distributing food parcels to Rudds followers, the only reason we missed on the recession is we went straight to depression

 

[skyQuake]

I've been out distributing food parcels to Rudds followers, the only reason we missed on the recession is we went straight to depression

Please sir, can I have some more?

 

[Uncle Festivus]

But experts have been talking about the deficit and it's payback literally, for decades (even in the 80s) until economic theorists stated "perhaps a huge deficit is not bad if you are achieving economic growth". Perhaps there are truths in both elements (the US would not be where it is today if it were not for debt and excess consumption).

Of course it has to revert at some point, but where will this be? That is the key and if Soros himself couldn't predict it, then nobody stands a chance IMO. Just have to take opinions and trade them as best as price permits.

How much do we pay for 'growth' now, in the future ie deficits? The US now get's 50c worth of GDP for every $1 they spend in stimulis. Same here, only before Big Kev we only had huge private debt; now we have huge private debt AND huge government debt! This will be an interesting ride?

 

[MrBurns]

Please sir, can I have some more?

It's in the mail

 

[Conza88]

But experts have been talking about the deficit and it's payback literally, for decades (even in the 80s) until economic theorists stated "perhaps a huge deficit is not bad if you are achieving economic growth". Perhaps there are truths in both elements (the US would not be where it is today if it were not for debt and excess consumption).

Of course it has to revert at some point, but where will this be? That is the key and if Soros himself couldn't predict it, then nobody stands a chance IMO. Just have to take opinions and trade them as best as price permits.

Those "economic theorists" were Keyesian / Neoclassical / mainstream tools... that's why.

The Trouble With Data - Murray N. Rothbard: A Legacy of Liberty by Llewellyn H. Rockwell, Jr.

"Many economists think numbers are the sum of the discipline. Rothbard turned the tables to argue that government data are gathered and used for piece-meal planning and the destruction of the economy. Whatever information markets need about economic conditions can be garnered privately.

A good example is the "trade deficit" between nations, which he said is no more relevant than the trade deficit between towns. There is no justification for assuming that trade must equal out in accounts. The important point is that people are benefiting from exchange, whether across the street or across the world." ​

Does the widening US trade deficit pose a threat to the economy? by Frank Shostak

"By its design the national balances of payments do not disclose the transactions that occurred within the economy. The balances of payments only deal with transactions that are external to the economy. In other words, a balance of payments describes how much money a particular country spent on goods from other countries and how much money it received for the goods it sold to other countries. Now, the larger the economy is the less information, as far as economic activity is concerned, can be derived from the balance of payments statement."

On this Mises wrote,

While an individual's balance of payments conveys exhaustive information about his social position, a group's balance discloses much less. It says nothing about the mutual relations between the members of the group. The greater the group is and the less homogeneous its members are, the more defective is the information vouchsafed by the balance of payments. The balance of payments of Denmark tells more about the conditions of the Danes than the United States balance of payments about the conditions of the Americans.[1]​

Soros had no idea it was coming, because he doesn't understand the Austrian Theory of the Business Cycle... which is why what he is calling for to solve the crisis is going to make it all so much worse. He's lost BILLIONS this year, and for good reason.

Now, you can choose to remain ignorant and go on beliefs, whims and opinion... or you can learn some cold hard truths based on deductive reasoning to determine axioms about economic law.

 

[Julia]

Rudd's stimulus package has meant that very few people have had to be made redundant. It has definitely has had an effect in my work.

Because most people have kept their jobs the downturn has not bit too hard, property prices have not dropped much, spending has essentially continued.

It therefore appears Rudd has ameliorated the worst effects of the recession in Australia while the US, GBR and Europe are a mess. As a swinging voter you have to say that Labor deserve congratulations in this and the comments bagging Rudd for succeeding show a lack of balance and a trace of being a sourpuss.

Seems like a fair comment, Knobby.
What do you think will happen to the economy when the artificial stimulus is removed?

The point some of us have been making is that sure if people are given cash to spend, they will spend some of it and this will be reflected in the quarterly figures. But once it's spent, that's that, isn't it?

Whereas if a longer term approach had been taken and that same funding put into e.g. hospitals, water infrastructure, roads, the benefits would have accrued over a much longer period of time and there would have been a permanent result from the money being spent. We could have employed more doctors, nurses, spent more on teacher training so our kids are not semi literate when they leave school.

This is in contrast to Australians lining the pockets of Asian plasma producers and whatever other temporary pleasures provided by the cash splash.

So, no. I do not feel like congratulating the Rudd government. I believe their actions are motivated much more by their own political objectives than the fundamental good of Australia for the longer term.

 

[Julia]

oh cmon guys .not even a bite ???

i was joking by the way

Have been trying to think of a smart response, Nun. So far failing miserably.

 

[Beej]

Hahah, the last part was edited in and all in jest.

Thanks for addressing the only thing I posted with no substance.

Now how about the real material? You know 90% of the post?

If the advice in that other material had been followed we would almost certainly be in depression now instead of looking like avoiding prolonged recession! Really - the stuff you posted suggests the exact opposite of what should be done, and what has proven to work to stimulate economies during cyclical downturns (Ie suggesting that in a downturn government should CUT expenditure so as to reduce it's "burden" on the private sector! What a joke!). There are many good reasons Austrian economics is confined to the fringe.....and that's putting it politely....

The point some of us have been making is that sure if people are given cash to spend, they will spend some of it and this will be reflected in the quarterly figures. But once it's spent, that's that, isn't it?

Whereas if a longer term approach had been taken and that same funding put into e.g. hospitals, water infrastructure, roads, the benefits would have accrued over a much longer period of time and there would have been a permanent result from the money being spent. We could have employed more doctors, nurses, spent more on teacher training so our kids are not semi literate when they leave school.

But they are spending on longer term infrastructure as well! I am sure you know this! The cash stimulus was phase 1 - quick and immediate. Phase 2 was the capital works (school halls, minor roadworks, insulation etc) - that's hitting the economy now and into the next 1/4 or 2 and represents a stimulus the equivalent $$ amount of the total cash payments, but probably with a better multiplier effect. Phase 3 is the long term infrastructure like the Melbourne rail tunnel, the Pacific Highway upgrades, the port upgrades, the broadband network etc - the funds (and jobs) from these project will hit the economy from late this year well into the next 2/3/4 years.

So really Rudd and co are doing EXACTLY what you are suggesting - you are just conveniently forgetting about it when you write posts like the above!

Cheers,

Beej