The state of the economy at the street level

[over9k]

Personally, I'd just trim the fat off the public service, let inflation run hot (shoot for 4%) and let bracket creep take care of it, but I have approximately 1/27 millionth of a say in what will be done, so it's not exactly up to me.

 

[wayneL]

Personally, I'd just trim the fat off the public service, let inflation run hot (shoot for 4%) and let bracket creep take care of it, but I have approximately 1/27 millionth of a say in what will be done, so it's not exactly up to me.

Apart from trimming the fat, it's what I reckon they try to *let happen.

There seems to be two views on the inflation front however, both equally compelling.

 

[Smurf1976]

Actually lots of stuff is being built, snowy scheme, highways etc but Sometimes **** happens, and you have to press pause on infrastructure etc and go into debt to fight a war, this time it’s a war against a virus. We will survive, things will return to normal, and we won’t be devastated by bomb blasts.

I think the point is that governments have basically handed out lots of money to be spent on consumer goods and so on whereas a greater economic return could have been achieved by putting that into additional infrastructure instead.

There's a limit to how much infrastructure is useful but we're not there yet, it's a better way to pump prime the local economy than importing big screen TV's and cars.

 

[Smurf1976]

Personally, I'd just trim the fat off the public service,

The problem with trimming the fat in the PS is they usually trim the meat and keep the fat.

A few large corporates have gone down the same track over the years and they, and their share price, tends to stagnate (at best) over the long term as a result. Short term bounce as costs are cut then long term pain as the reality of losing the best people sets in.

Avoid companies run by "fixer" type CEO's with a track record of coming in, slashing costs then moving on before the inevitable hits the fan. Pump and dump is the game basically....

As distinct from real, actual cost cutting which takes out the dead wood and keeps the rest. All too often that's not how it's done though.

 

[wabullfrog]

Can add "Transformation Consultants" to the "Fixer CEO" for optimal proverbial hitting the fan.

 

[Value Collector]

I think the point is that governments have basically handed out lots of money to be spent on consumer goods and so on whereas a greater economic return could have been achieved by putting that into additional infrastructure instead.

There's a limit to how much infrastructure is useful but we're not there yet, it's a better way to pump prime the local economy than importing big screen TV's and cars.

In other years the government has handed out lots of money to be spent on bombs, bullets and aircraft etc to fight wars.

whether we are defending our quality of life through bombs, or by fighting a virus I don’t think there is much difference.

 

[Value Collector]

But in these days the debt is not due to building infrastructure, it's because of handouts to businesses and individuals to simply keep on living or keeping restaurant doors open.

Nothing extra is being built that wasn't planned already because governments simply can't afford it.

This debt has to be paid off, and income from infrastructure won't do it.

That’s part of fighting the negative effect of the virus, that has a genuine economic purpose, just as going into debt to fight WW2 also had an economic purpose.

during World War Two we were basically spending millions of dollars on ships, planes and tanks just to blow them up miles from home, destroying resources and our labour force, it’s no less wasteful than the activities mentioned to protect our economy and keep the population going during this pandemic.

 

[Smurf1976]

whether we are defending our quality of life through bombs, or by fighting a virus I don’t think there is much difference.

Spend the money on infrastructure and it creates economic activity now and into the future.

Spend the same money by handing it to consumers and it creates economic activity now but nothing tomorrow.

The approach we have taken, seems to have resulted in an extreme two halves situation. Things like residential building are booming to the point of material shortages meanwhile things like live entertainment are almost dead. The real economy's very split there.

 

[SirRumpole]

That’s part of fighting the negative effect of the virus, that has a genuine economic purpose, just as going into debt to fight WW2 also had an economic purpose.

during World War Two we were basically spending millions of dollars on ships, planes and tanks just to blow them up miles from home, destroying resources and our labour force, it’s no less wasteful than the activities mentioned to protect our economy and keep the population going during this pandemic.

I have no argument with that, the point is how do we finance this extra spending ?

Leave the debt for other generations , cut spending on services, raise taxes on companies or individuals , or make more from our resources which can only be dug up once ?

We have an irresponsible government that has no plans for paying back the debt, while I don't disagree with how they spent money.

The resources sector is a viable source of more funds in an emergency, we would be stupid not to get more from it while we can.

When you look at how critical the LNP were about the relatively modest debt of Labor by comparison, but now the debt is theirs, there is no problem.

Ha ha ha.

 

[over9k]

The problem with trimming the fat in the PS is they usually trim the meat and keep the fat.

A few large corporates have gone down the same track over the years and they, and their share price, tends to stagnate (at best) over the long term as a result. Short term bounce as costs are cut then long term pain as the reality of losing the best people sets in.

Avoid companies run by "fixer" type CEO's with a track record of coming in, slashing costs then moving on before the inevitable hits the fan. Pump and dump is the game basically....

As distinct from real, actual cost cutting which takes out the dead wood and keeps the rest. All too often that's not how it's done though.

Agreed entirely.

It was a deliberate use of term though - trim the fat, not cut the budgets.

 

[qldfrog]

I have no argument with that, the point is how do we finance this extra spending ?

Leave the debt for other generations , cut spending on services, raise taxes on companies or individuals , or make more from our resources which can only be dug up once ?

We have an irresponsible government that has no plans for paying back the debt, while I don't disagree with how they spent money.

The resources sector is a viable source of more funds in an emergency, we would be stupid not to get more from it while we can.

When you look at how critical the LNP were about the relatively modest debt of Labor by comparison, but now the debt is theirs, there is no problem.

Ha ha ha.

The problem is knowing that i have no doubt in my mind debt would be bigger had Labour been in power.with more businesses down.
Look at Victoria or here in Qld,would you like that type of gov at the federal level?
It is a (sad) battle between bad and worse

 

[Value Collector]

I have no argument with that, the point is how do we finance this extra spending ?

Leave the debt for other generations , cut spending on services, raise taxes on companies or individuals , or make more from our resources which can only be dug up once ?

We have an irresponsible government that has no plans for paying back the debt, while I don't disagree with how they spent money.

The resources sector is a viable source of more funds in an emergency, we would be stupid not to get more from it while we can.

When you look at how critical the LNP were about the relatively modest debt of Labor by comparison, but now the debt is theirs, there is no problem.

Ha ha ha.

The debt will be paid, but during the middle of the war is not the time to worry about the debt.

 

[Value Collector]

Spend the money on infrastructure and it creates economic activity now and into the future.

Spend the same money by handing it to consumers and it creates economic activity now but nothing tomorrow.

The approach we have taken, seems to have resulted in an extreme two halves situation. Things like residential building are booming to the point of material shortages meanwhile things like live entertainment are almost dead. The real economy's very split there.residential

If there is a residential building boom, that shows that handing money out is creating stuff for tomorrow.

At the end of the day, in hindsight how much would the government of 1930 been willing to go into debt if they were able to sail through the 1930’s with no depression? Avoiding the pain of depressions is a very valid reason to increase government debt, as I said no different to fighting a war.

 

[Humid]

Spend the money on infrastructure and it creates economic activity now and into the future.

Spend the same money by handing it to consumers and it creates economic activity now but nothing tomorrow.

The approach we have taken, seems to have resulted in an extreme two halves situation. Things like residential building are booming to the point of material shortages meanwhile things like live entertainment are almost dead. The real economy's very split there.

But governments are in the business of re-election the time infrastructure is finished they're long gone

 

[moXJO]

Local large fruit and veg market/supermarket that was 10 deep last lockdown is dead quite as of last two weeks. Talking to the owner, he mentioned cash seems to have dried up.
Other supermarkets (woolies/coles/aldi) don't seem to be turning over as much.

 

[wayneL]

Local shopping centre (Midland WA) seemed to be thriving when we first arrived back here 3 months ago, only want or two shops in the centre boarded up.

I didn't countdown but there seems to be at least 10 boarded up now. And apart from McStalin having the occasional rush of blood, WA hasn't really had the same level of lockdown as the Eastern states.

But there does seem to be cracks appearing in the economy here.

 

[divs4ever]

I don't catch taxis often, but when I do, I like to have a chat with the driver and get his/her views on the state of the economy. It can be quite an interesting chat.

I also like to walk a lot, and perhaps it's due to my 'bear-ish' nature, but I have noticed a lot of shops closing down on the streets I walk on. Some of these have been in existence for quite a while (like 5+ years) and some seem short lived.

More recently, I have noticed some friends within my circle to be losing their job or struggling with their career stability. It almost feels like the grim reaper of redundancy is circling me like a shark.

So from my own personal, and microscopic experience, the state of the economy appears to be somewhat gloomy, or at the very least, cautious.

I'm interested in the views of others on their own personal/street level/coal face level on how they feel the economy is going or will be going. Please feel free to share

WOW , i couldn't have put it better myself in 2014 or now , i use very similar tactics as well

an extra tactic ( asset might be more accurate ) i used was i knew two quality professional tradesmen/businessmen ( both sadly deceased now ) who had retired , but decided to take the Grey Nomad path repeatedly along the Australian East Coast ( one would visit Tasmania one didn't ) and joy of joys both didn't gild the lily , so i would readily listen to the travels and opinions , and get on honest street level appraisal .

now i might be out of date with the data , but MANY small businesses only last 3 years or less ( right back to the 1980's ) so 5 years is fair ( but sad for the hopes and dreams crushed ) maybe if you noted which sectors closed early will give you a trend

BTW some centre managements , are infamous for their willingness to churn smaller tenants

cheers

 

[divs4ever]

Local shopping centre (Midland WA) seemed to be thriving when we first arrived back here 3 months ago, only want or two shops in the centre boarded up.

I didn't countdown but there seems to be at least 10 boarded up now. And apart from McStalin having the occasional rush of blood, WA hasn't really had the same level of lockdown as the Eastern states.

But there does seem to be cracks appearing in the economy here.

when i was there ( WA ) in 2012 , WA was obviously the growth potential of Australia , quirky but full of potential

and the SCARY part , is McStalin appears to be the best of the current premiers ( apart for maybe Tasmania , i can't tell because the Tassie headlines get buried by the other clown's antics )

 

[divs4ever]

That’s part of fighting the negative effect of the virus, that has a genuine economic purpose, just as going into debt to fight WW2 also had an economic purpose.

during World War Two we were basically spending millions of dollars on ships, planes and tanks just to blow them up miles from home, destroying resources and our labour force, it’s no less wasteful than the activities mentioned to protect our economy and keep the population going during this pandemic.

another difference is during WW1 and WW2 we killed thousands of young man in their prime , this time they would rather kill grannies ( pensioners )

 

[divs4ever]

If there is a residential building boom, that shows that handing money out is creating stuff for tomorrow.

At the end of the day, in hindsight how much would the government of 1930 been willing to go into debt if they were able to sail through the 1930’s with no depression? Avoiding the pain of depressions is a very valid reason to increase government debt, as I said no different to fighting a war.

MMT ( Modern Monetary Theory ) MIGHT work if the money is invested WISELY in durable infrastructure , but sadly human nature ruins than chance