It's the economy, stupid? (1 Viewer)

[townie]

It seems to me thesedays that somehow it doesnt matter what is happening, as long as the economy is going well, then it doesnt matter, any sin can be performed as long as it helps the economy, and any action rejected if it won't.

I personally think that some things should trump the economy (p.s. by this i mean that these things may damage/not further, NOT destroy the economy, obviously i realise we need some form of viable economy, but does it really have to be THE BEST at the expense of everything else?)

Agree/disagree?

 

[sunjet]

Examples of these things? The economy impacts almost everything.

 

[onebytwo]

8:20am - city rail commuters bound for work, half of which are distressed, frustrated, grouchy, unhappy and the rest asleep.
meanwhile, howard comments on australia's strong economy, which we neednt explain to him, is established to best satisfy our needs and wants. how many commuters bound for work want to be getting out of bed at 7:00am on a rainy monday morning?

 

[codydhu]

Agree.

I completely understand where you're coming from. I'm sick of people who value the economy so highly - suggesting things like how there should be no welfare systems, no regard for environmental issues and no tax cuts (except if it includes themselves). They also hate the idea of foreign aid.
Basically they're selfish people.
At the same time, it can't be said that we should value quality of life for citizens over the economy all the time because, obviously the former is so dependent on the latter.

 

[Omnidragon]

The economy is the most important thing in this country (more important than a few petty lives) because when it goes busts my investments will crash and I'll have a heart attack. If I don't get a heart attack, I'll be out of a job anyway and I'll be unable to service my mortgage and be forced to sell my underwear. Unfortunately, in a bust, my house will probably be worth less than my mortgage so I end up in eternal debt, at which point I might consider prostitution for fat and ugly women.

 

[onebytwo]

The economy is the most important thing in this country (more important than a few petty lives) because when it goes busts my investments will crash and I'll have a heart attack. If I don't get a heart attack, I'll be out of a job anyway and I'll be unable to service my mortgage and be forced to sell my underwear. Unfortunately, in a bust, my house will probably be worth less than my mortgage so I end up in eternal debt, at which point I might consider prostitution for fat and ugly women.

oh, of course. good thinking.

 

[MaNiElla]

lol

 

[volition]

It seems to me thesedays that somehow it doesnt matter what is happening, as long as the economy is going well, then it doesnt matter, any sin can be performed as long as it helps the economy, and any action rejected if it won't.

I personally think that some things should trump the economy (p.s. by this i mean that these things may damage/not further, NOT destroy the economy, obviously i realise we need some form of viable economy, but does it really have to be THE BEST at the expense of everything else?)

Agree/disagree?

Disagree, for the most part a growing economy is the way to solve many big problems that we face today.

Poverty, diseases, cancer, coping with global warming - all of these are things that society is better able to deal with when we have a stronger economy.

When we have the resources to care about things, we can start to actually afford to look after things. Notice how it's the richer countries that tend to care more about their environment? It's because the people in poorer countries are too concerned with more mundane things like where the next meal is coming from.

 

[Captain Gh3y]

the Coalition has done such a great job

The Coalition have done nothing (economically) for 11 years. They simply feed us lies while riding the gravy train set in motion by Great Leader Keating. Our economic management has been conducted by a combination of mining companies and China, while our Government have been an irrelevant sideshow since Labor had the election stolen. Don't you know anything?

For example they re-defined 'employment' to 'he who gets out of bed in the morning'. This sent unemployment rates to record lows, while setting feminism back decades with the use of gendered language. Another example is that with WorkNoChoices they effectively abolished the abolition of slavery, raising productivity on cotton farms nation wide. Unfortunately their water management policy has been to allow the state Labor governments to do nothing (but it's not their fault), making cotton quite un-growable.

As for what townie was saying, he's quite right, as the latest crime statistics have shown a dramatic rise in the following crimes, since Howard was elected, in direct proportion to economic growth:
- Lust
- Gluttony
- Greed
- Sloth
- Wrath
- Envy
- Pride

Attempts to reduce these have been thwarted by those demanding separation of Tony Abbot and State.

 

[Lachlan18]

ZOMG, when the Labor party gets in party, we'll have a million percent unemployment!!!1 We'll also have a million percent interest rates and we'll be in a straight all out recession of minus 600%, AMAGAD, SAVE ME! We can't let those pro-education, pro-healthcare, pro-better-Broadband, pro-common-sense-work-laws people in power as opposed to the other peeps that have an economy growing at an enormous 2%, or where the religious agenda is so common, or where HECS fees and Medicare can be undermined, or where the anti-environment stance is "cool"! ZOMG, I prefer John Howard man, he's just so good for me and my denial!

 

[pete_mate]

The Coalition have done nothing (economically) for 11 years. They simply feed us lies while riding the gravy train set in motion by Great Leader Keating. Our economic management has been conducted by a combination of mining companies and China, while our Government have been an irrelevant sideshow since Labor had the election stolen. Don't you know anything?

Most people that talk about the economy in a political context don't know wtf they are talking about.

When people say that the howard govt. is doing an awesome job of managing the economy, they are wrong. The RBA "manages" the economy, and is completely separate to the government. However, the govt. can impact it on macroeconomy fiscal policy (the budget, how much shit it spends) and this i would say is the only area where the govt is doing well. HOWEVER.

The second, crucial aspect of the governments economic management is microeconomic reforms and stimulating increases in productivity.
they have done ZERO microeconomic reforms, workchoices has no consequence on the economy economically, at the cost of massive decreases in quality of working life.

And VERY minimal increases in productivity through underspending on education (yes even in the latest budget, % spent on education has actually decreased)

Infastructure, the ports road and rail cant even keep up with our minerals exports due to under-investment, so that our trade deficit isn't even improving.

Because these Reforms take 10 years or so to impact, (eg. keatings reforms are what is causing the excellent growth now) the govt doesnt really give a shit because it will be out of office when the economy runs out of productive capacity.

Also the reason why we have low unemployment is partly ebcause of the minerals boom, but also because the liberal government CHANGED THE DEFINITION OF WHAT UNEMPLOYMENT IS. such that those that were unemployed for more than 1 or 2 years, weren't considered unemployed anymore, and bang! the figure dropped by 2 or 3%.

 

[frog12986]

.

.However, the govt. can impact it on macroeconomy fiscal policy (the budget, how much shit it spends) and this i would say is the only area where the govt is doing well. HOWEVER.

The second, crucial aspect of the governments economic management is microeconomic reforms and stimulating increases in productivity.
they have done ZERO microeconomic reforms, workchoices has no consequence on the economy economically, at the cost of massive decreases in quality of working life.

Microeconomic reforms:
- Workplace Relations 1996 and 2005
- Tax Reform 1999
- Superannuation Reform 2006
- Continuation of the National Reform Agenda (reducing tariffs etc)
- Welfare to Work 2005
- Incentives aimed at increasing participation (and improving productive capacity), which create a short term downward trend in relation to productivity

As for your claim that the 'RBA manages the economy', that is complete rubbish. The most important way any government can affect the economic cycle is via macroeconomic policy, as you rightfully point out. The decisions government makes in this regard are imperative in relation to the flow on effects of the economy. Monetary policy decisons byt the RBA are largely derivative of the economic indicators that are driven and affected by fiscal stimulus.

The biggest error of the Keating era was the erratic implementation of microeconomic reform without restraining the macroeconomic stance.
Prior to the election of the Howard Government, taxpayers were paying over 8 billion dollars annually on interest on government debt, that is now negligible. The Government has successfully eliminated risk from government policy and created a stable, certain situation that drives business epxansion and investment.

If people do believe that 'management' is a given, then so be it. However, when government starts to initiate risk and uncertainty into the market, difficulties and investment reluctance are likely to arise.

And confirm your facts first. The Coalition did NOT change the definition of unemployment, it was indeed undertaken by the previous governments, more than 30 years ago . Ross Gittins wrote an article about this some time ago..

As for the original thread.
A strong economy is needed to drive a strong social agenda. Investment, prosperity and certainty are each essential for the maintenence of revenue streams and the capacity of government to cater for areas of need.. too simplistic, probably, but that is the heart of it..

 

[Nebuchanezzar]

As for the original thread.
A strong economy is needed to drive a strong social agenda. Investment, prosperity and certainty are each essential for the maintenence of revenue streams and the capacity of government to cater for areas of need.. too simplistic, probably, but that is the heart of it..

No-one is denying this. The point of the subject is that people, like yourself, are throwing all their eggs into the one basket and saying that the ONLY thing worth worrying about is "the economy". You can have a great "economy", but some action needs to be taken with all that money you've got. The government of the past decade or so has done nowhere near the amount of social reform and dedication nessecary to be eligible for relection, in my eyes. Yeah, you need to have good "economic management", but there also needs to be a bit more to it than that.

 

[banco55]

No-one is denying this. The point of the subject is that people, like yourself, are throwing all their eggs into the one basket and saying that the ONLY thing worth worrying about is "the economy". You can have a great "economy", but some action needs to be taken with all that money you've got. The government of the past decade or so has done nowhere near the amount of social reform and dedication nessecary to be eligible for relection, in my eyes. Yeah, you need to have good "economic management", but there also needs to be a bit more to it than that.

"social reform"? What are you expecting them to do?

 

[WWJD_2005]

The Coalition have done nothing (economically) for 11 years.

This has to be a troll... you can't be serious.

edit: oh it was, it was just tl;dr :/

 

[frog12986]

The government of the past decade or so has done nowhere near the amount of social reform and dedication nessecary to be eligible for relection, in my eyes. Yeah, you need to have good "economic management", but there also needs to be a bit more to it than that.

Obviously the educational focus has been wrongly focused.. NECESSARY..

By social and educational reform what examples could you provide?

Every attempt to address issues such as the national curriculum, national standards and improving the performance of inept teachers, has met irreversable opposition by the State Governments, that of course ultimately provide the educational service to the electorate. It has taken the Commonwealth to tie funding to the implementation of reform for the States and the Education Union to start listening.

 

[Tulipa]

And if we all want to remember who is in the State Government at the moment.... Labor! That's right.

Educational reform has been proposed by the Federal Government and shot down by the State. So what do you suggest should happen Nebuchanezzar?

 

[BritneySpears]

8:20am - city rail commuters bound for work, half of which are distressed, frustrated, grouchy, unhappy and the rest asleep.
meanwhile, howard comments on australia's strong economy, which we neednt explain to him, is established to best satisfy our needs and wants. how many commuters bound for work want to be getting out of bed at 7:00am on a rainy monday morning?

All trains/buses are crowded in all cities the size of Sydney and bigger around the world during morning peak hour. It is not John Howard's fault that it rained and some one did not get enough sleep. They should've gone to bed early.

 

[pete_mate]

Microeconomic reforms:
- Workplace Relations 1996 and 2005
- Tax Reform 1999
- Superannuation Reform 2006
- Continuation of the National Reform Agenda (reducing tariffs etc)
- Welfare to Work 2005
- Incentives aimed at increasing participation (and improving productive capacity), which create a short term downward trend in relation to productivity

the national reform agenda (the reduction of tariffs which keating advanced) has barely been continued, there are still high tariffs in the car industry. The rest are fairly minimal and negligible more political wankery, nothing like the floating of the dollar or anything signicant like a national broadband policy or deregulation of the health system proposed under rudd.

As for your claim that the 'RBA manages the economy', that is complete rubbish. The most important way any government can affect the economic cycle is via macroeconomic policy, as you rightfully point out. The decisions government makes in this regard are imperative in relation to the flow on effects of the economy. Monetary policy decisons byt the RBA are largely derivative of the economic indicators that are driven and affected by fiscal stimulus.

Fiscal policy has long been less important than monetary policy, whatever fiscal position the government chooses to be in, will then be examined, as one of the factors in a monetary policy decision, but economic and external indicators are usually more important in assessing monetary policy.

"Budget's role is to play second fiddle to monetary policy" - ross gittins - 11oct2003
http://www.theage.com.au/articles/2003/10/10/1065676165240.html?from=storyrhs

"Dr Henry's willing acknowledgement that the dominant instrument for the management of the economy is no longer the budget (fiscal policy) but the manipulation of the official interest rate (monetary policy)."

Therefore the RBA "manages" the economy, NOT the government, the government doesnt have a very large role to play at all. Of course the government likes to say it does because it is doing well currently

The biggest error of the Keating era was the erratic implementation of microeconomic reform without restraining the macroeconomic stance.
Prior to the election of the Howard Government, taxpayers were paying over 8 billion dollars annually on interest on government debt, that is now negligible. The Government has successfully eliminated risk from government policy and created a stable, certain situation that drives business epxansion and investment.

"Dr Henry says the two concepts are logically incompatible and debunks the twin deficits, noting that, empirically, there's an almost zero correlation between the twins." i assume you dont know what the twin deficit theory is, its basically the theory that public sector debt will automatically increase the CAD.

this stable certain situation is all well and good when we have massive external demand coming from chinas economic boom, but when that tempers out (in the 3 or 4 years) the underinvestment in infastructure, broadband and education and its detrimental effect on productivity (productivity growth in australia is amonst the worst in OECD countries) and the economy wil tank. the mining boom is all that is propping it up, look at the grwoth rates in VIC and NSW, they're minute.

There is no risk in the government borrowing money, its not like a business, it will never default on its loans, and would need a ridiculous amount of debt to eveb pay a risk premium on the money it borrows.

Debt is not necessarilly a bad thing, any public company that doesnt have debt is not realising its growth potential.

for example, if the government has to borrow 10 billion dollars to build broadband infastructure, the productivity and economic growth that would result from it would increase its revenues and the return on their investment would more than pay off the debt,

 

[frog12986]

the national reform agenda (the reduction of tariffs which keating advanced) has barely been continued, there are still high tariffs in the car industry. The rest are fairly minimal and negligible more political wankery, nothing like the floating of the dollar or anything signicant like a national broadband policy or deregulation of the health system proposed under rudd.
,

If Howard were Prime Minister throughout the 1980's he would have implemented the same reforms, and as Opposition Leader supported each. Tax Reform has had a significant impact on revenue streams, and the progression towards a greater indirect tax base has been instrumental in the strong fiscal position of the government. As for eduation, expenditure has increased by 74% in real terms since 1996; I would hardly call that underinvestment..

The RBA is instrumental in affecting the short term economic approach, however to suggest that the role of fiscal policy is negligible altogether is ridiculous. As it states in that article:

(The government will be) Maintaining budget surpluses for as long as economic growth prospects remain sound, ensuring no increase in the overall tax burden from 1996-97 levels, and improving the Commonwealth's net worth (its assets less its liabilities) over the medium to longer term.

Dr Henry says such a target "helps deliver macro-economic stability, encourages private investment in a low interest rate environment, entrenches low public debt and ensures that, over time, the current account (deficit) reflects private saving and investment decisions".

Ultimately that target is established and adhered to by government.

National Broadband Policy and Health Deregulation? The former would hardly have the impact on Australia's productive capacity that is purported by Rudd and Labor. Particularly when the policy involves the raiding of the future fund, which produces a further development of risk and unseviced liabilities. The private sector is willing and more than capable to absorb the risk of initiating a high-speed broadband network, (particularly the G9 group of companies) that produces the same results without the inherent economic dangers to government.

I've heard nothing in relation to Health Deregulation, however it would be remarkable considering Labor's staunch opposition to Private Health cover over the past 11 years.