Second stimulus package discussion

[prawn_86]

I am glad it didn't pass, but from what I read, it was all because of the politics rather than the economy. I am now convinced that neither side has any idea what is going on.

When did they have any idea? Not in my short lifetime thats for sure. Heard an interesting quote in a song that applies to the ASF community IMO: "[We] see the strings that control the system". Pity the average person doesn't...

 

[shaunQ]

Labor could have easily passed this if they wanted to. They support the greens and probably always will, it gives them the green edge, preferences galore, and theres always a coalition prospect if things turn ugly.

Xenophon? He's just a small player, Labor don't care about him. They knew and hoped he'd stick to his guns (and would have no alternative not to). Maybe they could have reduced the payment to $800? - but no.

The worst thing for Labor is for this to go through simply. Then - its their idea, its their absolute head on the chopping block when it all fails - which ultimately, no matter what anyone might do - its probably going to appear like failure to the people.

So - now, we have Malcolm doing what he was meant to do - laughing his head of in parliament, sticking the finger into Labor.

Everyone has an opinion on this stimulus - good or bad. But people hate political games more - and Liberal will come out of this the loser.

When Labor try again. It either gets knocked back again. Or it gets massively changed allowing Labor to effectively disown it. Its a win win. They won't go to a DD election.. They've only got around 12 months and they can call one anyway.

 

[juw177]

When did they have any idea? Not in my short lifetime thats for sure. Heard an interesting quote in a song that applies to the ASF community IMO: "[We] see the strings that control the system". Pity the average person doesn't...

All I want to hear is for one person, just one person to come out and say "No, we cannot solve a debt problem with more debt"

 

[rederob]

All I want to hear is for one person, just one person to come out and say "No, we cannot solve a debt problem with more debt"

it assumes we have a "debt problem".
We don't, yet.
Furthermore, we don't have problem of "our" making.
We have inherited a malaise of global proportions, and there's no way of avoiding it.
The only real concerns with present events relate to duration and intensity.
Global fiscal stimuli have a chance of getting most economies out of recession. The combined effects could return markets to a semblance of rationality that, in time, will lead to "growth".
The alternative is a waiting in the wings, fully fledged, depression.
Our fiscal stimulus may not get through in the Nick of time.

 

[juw177]

it assumes we have a "debt problem".
We don't, yet.

Are you kidding me?

Furthermore, we don't have problem of "our" making.
We have inherited a malaise of global proportions, and there's no way of avoiding it.
The only real concerns with present events relate to duration and intensity.

The reserve bank and APRA have all the authority they need to enforce lending standards. But people were allowed to buy homes with 5% down payment, then subsequently allowed to borrow against their mortgage to buy cars and televisions. All under the assumption that the property bubble was sustainable. When the property boom was coming to an end, the government introduced the first home buyers grant to artificially inflate demand. And we willingly supported it... so it is very much a problem of "our" making.

Global fiscal stimuli have a chance of getting most economies out of recession. The combined effects could return markets to a semblance of rationality that, in time, will lead to "growth".

Show me an example where a global stimulus has benefited an economy long term. Look at Japan. Look at the US during the tech crash. They flooded liquidity into the market only to leave everyone with more debt that is now coming around. There is no growth without a reset.

 

[Beej]

Are you kidding me?

The reserve bank and APRA have all the authority they need to enforce lending standards. But people were allowed to buy homes with 5% down payment, then subsequently allowed to borrow against their mortgage to buy cars and televisions. All under the assumption that the property bubble was sustainable. When the property boom was coming to an end, the government introduced the first home buyers grant to artificially inflate demand. And we willingly supported it... so it is very much a problem of "our" making.

You are confusing Australia with the US mate! The problems Australia face are SQUARELY due to the drop off in demand from our trading partners for our exports + overseas sourced financing issues for our businesses, combined with a pull back in consumer spending due to falling confidence. Nothing to do with local consumer debt due to people buying cars with money they paid off their mortgages etc! Our mortgage default rates are MINISCULE!

This is where i dnt understand politics and all the stupid posturing that goes along with it? How is he, or anyone, risking things (and what is he risking?) by voting no to something he doesnt like/agree with?

Senators are elected for 2 terms (6 years) rather than only a single term as is the case for a regular MP (house of representatives). If a piece of legislation is passed by the lower house but rejected by the senate twice, then the government has the option of calling a "double dissolution" election - which means that the ENTIRE senate get's re-elected (instead of the normal half) along with the entire house of reps. So a DD election severely disadvantages minor parties and independents as well as the major opposition party re their chances of retaining seats in the senate. So Senator Xen is risking getting turfed out years earlier than he otherwise would.

Cheers,

Beej

 

[Glen48]

Gillard on ABC Late line claims all the experts in the World say stimulate ......do as I say and it didn't work for us it may work for you.

 

[juw177]

You are confusing Australia with the US mate! The problems Australia face are SQUARELY due to the drop off in demand from our trading partners for our exports + overseas sourced financing issues for our businesses, combined with a pull back in consumer spending due to falling confidence. Nothing to do with local consumer debt due to people buying cars with money they paid off their mortgages etc! Our mortgage default rates are MINISCULE!

Sure drop in exports is a part of it, but the problem here is the same as the US and the rest of the world. We had an economy that relied on debt borrowed against assets that were assumed to be inflating. Mortgages is just an example. You can substitute it with iron ore if it makes more sense to you.

And FYI, overseas sourced financing does not actually contribute to our GDP. It may keep businesses afloat for longer but in the end it just adds more debt.

 

[IFocus]

Sure drop in exports is a part of it, but the problem here is the same as the US and the rest of the world. We had an economy that relied on debt borrowed against assets that were assumed to be inflating. Mortgages is just an example. You can substitute it with iron ore if it makes more sense to you.

And FYI, overseas sourced financing does not actually contribute to our GDP. It may keep businesses afloat for longer but in the end it just adds more debt.

Juw there is a high level of consumer dept borrowed against assets that are priced possibly to inflated / bubble levels i.e. housing. In that area Oz is exposed to significant risk.

Where we differ and may escape is that we were fortunate to have banks that over charged the hell out of us with fees and make ridiculous profits without having to play the off balance sheet game that we see happen in US / Europe.

Risks are do nothing and chance the rapid fall in asset pricing with the knock on damage to our banks, then you are really screwed, start growing bananas.

Or provide stimulus to have the above happen in an orderly fashion worse case or actually buy time / soften the global effects on our economy.

The dept to be run up by the Australian Gov to do this is nothing in GDP terms and the outrageous claims by the Libs that its to much is bizarre.

 

[Nyden]

Looks as though Xenophon got some sort of a deal

http://www.smh.com.au/national/42b-...-cuts-a-deal-with-xenophon-20090213-86jw.html

Phillip Coorey
February 14, 2009 - 10:52AM
The Rudd Government has saved its $42 billion stimulus package by cutting a deal with the South Australian Senator Nick Xenophon.

Details are yet to emerge but smh.com.au understands an announcement is imminent and the revised package will be rushed into the Senate.

The Treasurer Wayne Swan met with Senaton Xenophon separately twice this morning, who yesterday joined the Coalition to oppose the package because the Government would not give him almost $6 billion to spend immediately on the Murray-Darling Basin.

I do hope something positive will be done with the Murray; and I don't quite understand why Labor was so hesitant as to bring forward the money anyway. If the money had already been earmarked, what difference does it make? If it would help to save local economies, it would also have a stimulus effect.

Seems ironic, as well - that Turnbull's fight was to apparently save the tax payer money ... but by voting against the bill, even more money had to be spent. Seems more like he was positioning himself for future politics, rather than actually fighting for his apparent problems with the bill.

They've all handled this atrociously, in my opinion. The libs, labor, greens, independents - the lot of them. I just find it sickly that personal politics and personal agendas were put before everything else.

 

[Aussiejeff]

Looks as though Xenophon got some sort of a deal

http://www.smh.com.au/national/42b-...-cuts-a-deal-with-xenophon-20090213-86jw.html

I do hope something positive will be done with the Murray; and I don't quite understand why Labor was so hesitant as to bring forward the money anyway. If the money had already been earmarked, what difference does it make? If it would help to save local economies, it would also have a stimulus effect.

Mebbe they know something many of us suspect but aren't being told - that the forward treasury estimates are much worse than they have been letting on and they were hoping to keep the Murray "powder" dry, in reserve - knowing they are going to have to drop another "bombshell" re: the state of the economy - sooner rather than later!

Only one thing is for certain atm. The river IS turning to powder and the water reserves ARE going dry.

 

[joeyr46]

it assumes we have a "debt problem".
We don't, yet.
Furthermore, we don't have problem of "our" making.
We have inherited a malaise of global proportions, and there's no way of avoiding it.
The only real concerns with present events relate to duration and intensity.
Global fiscal stimuli have a chance of getting most economies out of recession. The combined effects could return markets to a semblance of rationality that, in time, will lead to "growth".
The alternative is a waiting in the wings, fully fledged, depression.
Our fiscal stimulus may not get through in the Nick of time.

Your right the govt doesn't have a debt problem but society does credit cards maxed out etc The problem is of our own making Credit Inflation letting prices go up with no increase in value but thru the issue of credit to drive prices up every time it has happened in history it has led to Credit deflation or a credit crisis just like we have at the moment (and it can happen whether the govt is in deficit or surplus ) Can't be stopped by spending Can't actually be stopped reality is about to happen The prices were an illusion Could have possibly be stopped 30 years ago but we ignored the problem
It also probably suited the government to have some inflation Tax Bracket creep etc making people happy while stealing value from the dollar etcbut giving us the illusion of wealth re imaginary real estate values that could not be justified or sustained (but I'm probably 5 years ahead of time in OZ so very few will believe this)

 

[drsmith]

Only one thing is for certain atm. The river IS turning to powder and the water reserves ARE going dry.

And that won't change until the four state and federal governments come to terms with the fact that what the Murray/Darling basin needs is more water and something resembling an overall sustainable management plan.

Without that the federal government might as well throw it's (sorry, our) money into the drying bed of Lake Alexandrina and let the wind blow it away.

Pray for rain.

 

[Calliope]

And that won't change until the four state and federal governments come to terms with the fact that what the Murray/Darling basin needs is more water and something resembling an overall sustainable management plan.

Without that the federal government might as well throw it's (sorry, our) money into the drying bed of Lake Alexandrina and let the wind blow it away.

Pray for rain.

They can throw billions at bandaid solutions like Xenophon's deal and it won't make a scrap of difference to the sustainability of the Murray/Darling basin. Even flooding rains are only a temporary solution. A generation of neglect by state governments has left our iconic river systems in a terminal condition.

Years ago everybody knew that the only solution to this arid country's chronic water shortages was to build bigger and better water storage systems so that the floods could mitigate the droughts. But the NIMBY's and Greens don't like dams so they weren't built.

But now it is even too late for that. We have passed the point of no return.

 

[drsmith]

But now it is even too late for that. We have passed the point of no return.

What if the politicians focused on engineering solutions to harvest more rain and the greens focused on the efficient, sustainable use of water ?

Sorry,
Dreaming again.

No political mileage in that for either.

 

[Prospector]

But now it is even too late for that. We have passed the point of no return.

Please dont say that; you are dooming those communities to a death sentence! And this gives the pollies the opportunity to walk away, conscience clear. How pathetic is it if Australia kills it major water supplier to the Southern States! And Victoria will need the River more than ever because its major catchment areas have been totally polluted by the bushfire fight. And the smoke from the bushfires equals Australia's carbon emissions for the entire year! How on earth is Rudd going to trade that away! What a joke. Oh yeah, and then Penny Wong will pipe up with her bloody "global warming" mantra!

 

[prawn_86]

Prospector,

I personally think the Murray Darling Basin, and all the communities along it, are screwed. SA will be first and it will slowly work its way up. I have said since i was in YR 10 (6 yrs ago) that as long as Adelaide is around long enough for me to get my degree i will be happy. Politicains wont wever do anything constructive. My father is an irrigator and eternal optimist, but even he is thinking of selling up, he is just lucky he has no debt.

 

[MrBurns]

Too bad Krudd doesnt speak Japanese as well, he might have learned something before he started throwing our money around like a mad person -

Japanese economy to shrink by 10pc
By North Asia correspondent Mark Willacy

Posted 55 minutes ago
Updated 56 minutes ago

Japan is set to launch a fresh stimulus package, as economic figures out later today are expected to show the world's second largest economy has contracted by 10 per cent.

The Government has already spent over a $1 trillion trying to weather the global financial crisis.

Japan's Yomiuri Shimbun newspaper and public broadcaster NHK are reporting that the Government is now planning to inject $165 billion into the economy.

The stimulus package is likely to target public projects such as airports, highways and schools.

Later today Japan will release its gross domestic product figures for the last quarter of 2008, with economists expecting it to show the economy has contracted by more than 10 per cent, a sharper rate of decline than in any other major economy.

http://www.abc.net.au/news/stories/2009/02/16/2492135.htm

 

[Glen48]

Lindsay Tanner tells us it will work he has very confidence so at last it is all over .....xcept QLD has the fasts number of business going from large to small to nothing.

 

[juw177]

Too bad Krudd doesnt speak Japanese as well, he might have learned something before he started throwing our money around like a mad person -

America, UK, Japan, every failed economic policy so far has been expanded upon. Billions become trillions. Why would Rudd do different? The December stimulus had no effect? Raise the stakes!