Politics, Money & Finance

[supermario]

what jamie is correctly pointing out is that without howards foresight we would have been in far worse a position and certainly not in a position to be able to financially stimulate the market. bitch and whinge all you like about the things howard did poorly, but credit where its due.

if you read my earlier post Chen, you would see i did state that there was a period of prosperity under howard. Credit is given.

but you also have to admit is that howard began the economic downward spiral that we are now in the middle of.

like you said in another thread, there is always a flip side.

[Guest]

what jamie is correctly pointing out is that without howards foresight we would have been in far worse a position and certainly not in a position to be able to financially stimulate the market. bitch and whinge all you like about the things howard did poorly, but credit where its due.

Certainly that is correct

They are all liars and crooks to a certain extent and both sides do good and bad things.

[Guest]

no i dont agree that he began the economic spiral. look around muz, we arent the only country suffering. howard certainly isnt responsible for the global financial turmoil. sure taxes were high and housing seemed so far out of reach it made me wanna cry, but u know what, im glad he saved for a rainy day.

[supermario]

Howard never promised not to lift rates (I have asked people to provide evidence of this assertion and nobody has ever been able to do so because it was a myth perpetuated by Beazley after the 2004 election). Even if he did make such a promise, he couldn't have because the Reserve Bank of Australia set interest rates not the Federal Government.

The main reason the Howard had problems with inflation was due the rising cost of oil of which the government has no control over.

How can you say the Howard government left us with a spiralling downward economy?

We had unemployment at a 30 year low

Still fairly low interest rates

A record $22 billion surplus and no government debt

Muzz have you been drinking the Labor Koolaid?

or reading Krudd's communist manifesto?

Explain then how we find ourselves in this position ??? You cannot, in all honesty, say that our position at the moment has been caused by the labour government????

With all sanity, you cannot say that our economic position is the fault of the rudd government??

Everything begins somewhere, this downward spiral began with howard.

[supermario]

They are all liars and crooks to a certain extent and both sides do good and bad things.

This we can agree on 100%

[Guest]

if you read my earlier post Chen, you would see i did state that there was a period of prosperity under howard. Credit is given.

but you also have to admit is that howard began the economic downward spiral that we are now in the middle of.

like you said in another thread, there is always a flip side.

Muzz said

If Howard and costello didn't leave us with a false economy and rising interest rates, maybe there would be no need for a stimulus package.

With howard there was a small period of prosperity that was then overtaken by the greed and money grabbing of big business.

the libral surplus saw rising interest rates, rising house prices, higher cost of living.

This is a reality check, we need this to rebuild the house of cards howard and costello built.


I don't know Muzz a small period of prosperity I think that's a bit of an under estimation imho

[supermario]

Muzz said

If Howard and costello didn't leave us with a false economy and rising interest rates, maybe there would be no need for a stimulus package.

With howard there was a small period of prosperity that was then overtaken by the greed and money grabbing of big business.

the libral surplus saw rising interest rates, rising house prices, higher cost of living.

This is a reality check, we need this to rebuild the house of cards howard and costello built.


I don't know Muzz a small period of prosperity I think that's a bit of an under estimation imho

Small period.........how long is a piece of string...... it's all subjective

[Guest]

oh muz the hole is getting deeper haha
im off to bed, u know what they say dont discuss religion or politics
have a good one guys

[Guest]

Explain then how we find ourselves in this position ??? You cannot, in all honesty, say that our position at the moment has been caused by the labour government????

With all sanity, you cannot say that our economic position is the fault of the rudd government??

Everything begins somewhere, this downward spiral began with howard.

Of course I don't blame Rudd for the fallout from the global economic crisis.

But I do blame Rudd for putting us into a situation where will have a massive deficits for the next 4 years which will take forever to pay off due to demographics alone due to the baby boomers going into retirement over the next decade. The onset of Peak Oil followed by Peak Gas as well as the rort that is the Carbon Pollution Reduction Scheme which is a scam whereby business will be paying the governments for permits to pollute and we will pay extra when business pass along the cost to us consumers. This is an indirect tax that business will be collecting on behalf of the government, a bit like the GST, but at least that was transparent and replaced a bunch of sales taxes that were put up by the previous Labor government on the quiet.

OK rant over

[Guest]

oh muz the hole is getting deeper haha
im off to bed, u know what they say dont discuss religion or politics
have a good one guys

Lol I love discussing politics

don't believe in Religion

And I know Muzz is top bloke even though I have never met him

Night Chen

[Guest]

New Deal prolonged the Great Depression Harold L. Cole and Lee E. Ohanian | February 05, 2009

http://www.theaustralian.news.com.au...3-7583,00.html
Article from: The Australian
THE New Deal is widely perceived to have ended the Great Depression. This has led many to support a "new" New Deal to address the current crisis. But the facts do not support the perception that Franklin Delano Roosevelt's policies shortened the Depression, or that similar policies will pull our nation out of its economic downturn.

The goal of the New Deal was to get Americans back to work. But the New Deal didn't restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18 per cent below their 1929 level between 1930-32, but were 23 per cent lower on average during the New Deal (1933-39).

And it wasn't just work that remained scarce during the New Deal. Per capita consumption did not recover, remaining 25 per cent below its trend level throughout the New Deal, and per-capita non-residential investment averaged about 60 per cent below trend. The Great Depression clearly continued long after FDR took office.

Why wasn't the Depression followed by a vigorous recovery, like every other cycle? It should have been. Productivity grew rapidly after 1933, prices were stable, real interest rates were low and liquidity was plentiful. We calculated on the basis of just productivity growth that employment and investment should have been back to normal levels by 1936. Nobel Laureate Robert Lucas and Leonard Rapping calculated on the basis of just expansionary Federal Reserve policy that the economy should have been back to normal by 1935.

So what stopped a blockbuster recovery from starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net with social security and unemployment benefits, and by stabilising the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. These anti-market policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.

The most damaging policies were those at the heart of the recovery plan, including the National Industrial Recovery Act, which tossed aside the nation's anti-trust acts and permitted industries to collusively raise prices provided they shared their newfound monopoly rents with workers by substantially raising wages well above underlying productivity growth. The NIRA covered more than 500 industries, ranging from automobile and steel, to ladies hosiery and poultry production. Each industry created a code of "fair competition" which spelled out what producers could and could not do, and which were designed to eliminate "excessive competition" that FDR believed to be the source of the Depression.

These codes distorted the economy by artificially raising wages and prices, restricting output and reducing productive capacity by placing quotas on industry investment in new plants and equipment. Following government approval of each industry code, industry prices and wages increased substantially, while prices and wages in sectors that weren't covered by the NIRA, such as agriculture, did not.

Manufacturing wages were as much as 25 per cent above the level that would have prevailed without the New Deal. And while the artificially high wages benefited the few that were fortunate to have a job in those industries, they significantly depressed production and employment, as the growth in wage costs far exceeded productivity growth.

These policies continued even after the NIRA was declared unconstitutional in 1935. There was no anti-trust activity after the NIRA, despite overwhelming evidence of price-fixing and production limits in many industries, and the National Labor Relations Act of 1935 gave unions substantial collective-bargaining power. While not permitted under federal law, the sit-down strike, was tolerated by governors in a number of states and was used with great success against major employers, including General Motors in 1937.

The downturn of 1937-38 was preceded by large wage hikes following the Supreme Court's 1937 decision that upheld the constitutionality of the National Labor Relations Act. These wage hikes led to further job loss, particularly in manufacturing. The "recession in a depression" thus was not the result of a reversal of New Deal policies, as argued by some, but rather a deepening of New Deal policies that raised wages even further above their competitive levels. Indeed, New Deal labor and industrial policies prolonged the Depression by seven years.

By the late 1930s, New Deal policies began to reverse, which coincided with the beginning of the recovery. In a 1938 speech, FDR acknowledged that the American economy had become a "concealed cartel system like Europe", which led the Justice Department to reinitiate anti-trust prosecution. And union bargaining power was significantly reduced, first by the Supreme Court's ruling that the sit-down strike was illegal, and during World War II by the National War Labor Board, which limited large union wage settlements to cost-of-living increases. The wartime economic boom reflected not only the enormous resource drain of military spending, but the erosion of New Deal labor and industrial policies.

By 1947, through a combination of war-time wage restrictions and rapid productivity growth, the large gap between manufacturing wages and productivity had nearly been eliminated. Since then, wages have never been so distorted, nor has the country suffered such abysmally low employment.

The main lesson from the New Deal is that wholesale government intervention can - and does - deliver the most unintended of consequences. This was true in the 1930s, when artificially high wages and prices kept us depressed for more than a decade; it was true in the 1970s when price controls were used to combat inflation but only produced shortages. It is true today, when poorly designed regulation produced a banking system that took on too much risk.

President Obama and Congress have a great opportunity to produce reforms that return Americans to work and provide a foundation for sustained economic growth. These reforms should include specific plans that update banking regulations and address a manufacturing sector in which several large industries - including automobile and steel - are no longer internationally competitive. Tax reform that broadens rather than narrows the tax base and that increases incentives to work, save and invest is also needed.

We must also confront an education system that fails many of its constituents. A large fiscal stimulus plan that doesn't directly address the specific impediments our economy faces is unlikely to achieve either the country's short-term or long-term goals.

Harold L. Cole is professor of economics at the University of Pennsylvania. Lee E. Ohanian is professor of economics and director of the Ettinger Family Program in Macroeconomic Research at UCLA.

[Guest]

Cash payment amendments fail to win Xenophon vote on stimulus
http://www.theaustralian.news.com.au...91-601,00.html
Christian Kerr | February 12, 2009
Article from: The Australian
THE Government's attempts to secure passage of its $42 billion economic stimulus package appear likely to fail, with key Senator Nick Xenophon "disappointed" with amendments.

A spokesman for independent Senator Nick Xenophon told The Australian Online he was “very unlikely to support the package”.

Senator Xenophon has told the Senate he will meet with the Treasurer soon, but believes a "credible stimulus package" must bring forward funds for the Murray-Darling Basin.

"We’ve got a long way to go," he said.

The Government is still believed to be planning to force a vote before the midnight deadline, unveiling amendments this morning in an attempt to steer the bills through the Senate.

"2009 is going to be a tough year, but the Rudd Labor Government does not want to make it tougher," Minister for Superannuation Corporate Law Nick Sherry said.

Under the amendments, cash payments to eligible taxpayers will be reduced by $50 to $900. It will also reduce by the same amount, the one-off payment to single-income families.

The savings could be used to fund programs pushed by crossbench senators, Senator Sherry hinted.

He praised the "constructive discussions" with the crossbenchers; the "sensible and pragmatic" contribution of the Greens and said Family First Steve Fielding's community employment plans "had merit".

The Government needs the support of the five Greens, Senator Fielding and Senator Xenophon to pass the plan.

Senator Brown has told the Senate the Greens and the Government are “very close to final agreement on the package”.

Gee I hope this package fails to get passed
Hopefully it will force Rudd to sit down with the Coalition and design a more prudent package that does not put us into debt for forever and a day.

[Billy Gunn]

Cash payment amendments fail to win Xenophon vote on stimulus
http://www.theaustralian.news.com.au...91-601,00.html
Christian Kerr | February 12, 2009
Article from: The Australian
THE Government's attempts to secure passage of its $42 billion economic stimulus package appear likely to fail, with key Senator Nick Xenophon "disappointed" with amendments.

A spokesman for independent Senator Nick Xenophon told The Australian Online he was “very unlikely to support the package”.

Senator Xenophon has told the Senate he will meet with the Treasurer soon, but believes a "credible stimulus package" must bring forward funds for the Murray-Darling Basin.

"We’ve got a long way to go," he said.

The Government is still believed to be planning to force a vote before the midnight deadline, unveiling amendments this morning in an attempt to steer the bills through the Senate.

"2009 is going to be a tough year, but the Rudd Labor Government does not want to make it tougher," Minister for Superannuation Corporate Law Nick Sherry said.

Under the amendments, cash payments to eligible taxpayers will be reduced by $50 to $900. It will also reduce by the same amount, the one-off payment to single-income families.

The savings could be used to fund programs pushed by crossbench senators, Senator Sherry hinted.

He praised the "constructive discussions" with the crossbenchers; the "sensible and pragmatic" contribution of the Greens and said Family First Steve Fielding's community employment plans "had merit".

The Government needs the support of the five Greens, Senator Fielding and Senator Xenophon to pass the plan.

Senator Brown has told the Senate the Greens and the Government are “very close to final agreement on the package”.

Gee I hope this package fails to get passed
Hopefully it will force Rudd to sit down with the Coalition and design a more prudent package that does not put us into debt for forever and a day.

I don't agree the package whilst not perfect is a good strategy IMO, The Libs are trying to be the point of difference with no real solution.

The level of debt that is planned is sustainable in the long term. The amounts the government are looking at represent less than 5% of GDP compare this to the US who have spent 60% of GDP trying to stimulate the economy and Britian approx 50%

There needs to be money stimulating the economy and the best way to do that short term is by giving out cash, medium to long term infrastructure is the best method. Combining the two is sound logic.

The sad part is the greens andf libs are point scoring when action needs to be taken sooner rather than later. If as you say they sit down and discuss a "prudent" solution then the horse will have bolted. It is easy to stimulate the economy when it's slowing, it's much harder when all consumer confidence is gone and we are in recession just ask BRitian and the US.

[Guest]

Cash handouts failed in the US last April

[Guest]

Cash handouts failed in the US last April

Going by the figures the first lot seemed to work here. Someone who is clever may be able to explain something to me. It seems that conservatives here and elsewhere seem critical of infrastructure spending leading to deficit. I cannot fathom this out as this type of spending is necessary from time to time to keep the country moving forward. Obviously it would be good to fund this from surplus but sometimes to wait till you have the money is false economy. Like the oil light coming on in the car but thinking I'll keep driving till I get paid next week rather than using the credit card to get it checked and repaired immediately. So I see no better time for this type of necessary spending than when the country needs a boost creating employment now rather than in the future and the cost differential being only the interest we will pay on the borrowings with interest rates at historic lows and assuming the cost of such work will not be dearer in the future (highly unlikely). If I am totally wrong with this I am happy to be enlightened.