Do you think that a second stimulus package is needed to boost our economy? (1 Viewer)

[ziki]

Cutting military spending is both financially, realistically and politically difficult, if not impossible. Most of the money allocated to the military each year is spent before it is even allocated, meaning that demanding cuts in spending is pointless, because they would only come into effect in eighteen months or so. Few countries who want to cut defence spending actually do so, they simply don't bother increasing it and wait until inflation and economic growth catches up.
Also, Australia's military is already vastly overstretched, and despite our pulling out of Iraq, we may be getting involved in Afghanistan more so than before, which means that any savings (in money or personnel) from Iraq are nullified by a surge in Afghanistan. If we were to pull out or even cut spending to Afghanistan it would not only put our troops there at risk due to low-quality equipment and a lack of support, but also make us lose much of the political capital that we have in the international community.

if we need to cut military funding, first thing we should do is pull out of all wars oversea which does NOT have an effect on us. Seriously, we went over sea to fight for USA so Mr."Coward" can get his stupid award from bush. It was america that was bomb, so was london but it was never australia!

 

[КГБ]

our military budget is higher than Israel and on par with countries like India. what the fuck for? $20.3 billion on military goods where as the Australian government revenue is $320.3 billion. that's what? 7% of our budget allocated to fighting....umm....bunch of islanders off the coast of Fiji and Samoa.

what a fucking joke.


some may say its only 3-4% of our GDP, on par with the European union, but c'mon, are we REALLY going to threaten anyone srsly.

i like the neutrality ideology of the dutch. australia should adopt it right away.

 

[moll.]

Why is that pointless. Im happy to wait 18 months for spending cuts to kick in.
I'd be happy to see it phased in over several years or even a decade. In the long run we'd still be much better off.

Except that in 18 months the worst of the reccession will probably have passed, so the cuts will serve no economic point other than to weaken our military.
Much better off without a military, or with a weaker one? Where the hell do you live? Fairyland?

The idea is that we don't get involved in these stupid wars that have nothing to do with us. Even if we insist on "staying the course" or whatever, in the longer term we will eventually withdraw and can then begin slashing our military budget.

Nothing to do with us? We have been specifically placed upon the terrorist "to destroy" list, and it was Australians who were the main target on October 12, 2002.
We can slash the budget if no more engagements or peacekeeping missions occur, which is a realistic improbability. After Afghanistan there is always Somalia, Palestine, Sudan, Zimbabwe, the Democratic Republic of the Congo, New Guinea, the Korean Peninsular and the list goes on. And that's only with today's political landscape and the possible conflicts to arise from it. A lot can change in a few years time.

What political capital? Most of the world has not supported the US military intervention in Iraq and Afghanistan.

No, most of the world didn't support the invasion of Iraq. Afghanistan, however, had full NATO backing and a vote of silence from most Arab countries, which is basically equivalent to a vote for, because they can't be seen to be openly supporting the U.S.

if we need to cut military funding, first thing we should do is pull out of all wars oversea which does NOT have an effect on us. Seriously, we went over sea to fight for USA so Mr."Coward" can get his stupid award from bush. It was america that was bomb, so was london but it was never australia!

Again, it was Australians who were targetted and killed in Bali, and it is Australia which has been explicitly threatened by Islamists.
Yes, Iraq should never have been started, and in fact the presence of a secular dictatorship in the heartland of the Middle East was actually a force for much peace in the short-term at least.
But how is a fundemanalist Islamist regime which openly supported Islamic terrorists hell bent on world destruction and the ushering in of a era of Muslim world dominance not a threat to Australia and it's democratic and liberal interests?
What I don't get are all these "i HaTe HoWArDZ!!!1" idiots that are around. The invasion of Iraq had widespread support amongst the mainstream Australian public in March 2003. You all seem to have forgotten this. You also all seem to have forgotten that he did much for the economy and presided over Australia's longest-ever economic boom.

 

[КГБ]

Moll, where does one draw the line for fighting terrorists. what if some African country kills 500 Australian tourists. are we going to liberate them.


Governments can not always be accountable for individuals in Nation states.

 

[moll.]

our military budget is higher than Israel and on par with countries like India. what the fuck for? $20.3 billion on military goods where as the Australian government revenue is $320.3 billion. that's what? 7% of our budget allocated to fighting....umm....bunch of islanders off the coast of Fiji and Samoa.

what a fucking joke.


some may say its only 3-4% of our GDP, on par with the European union, but c'mon, are we REALLY going to threaten anyone srsly.

i like the neutrality ideology of the dutch. australia should adopt it right away.

What the fuck? Our military spedning is above Israel's because because they only have about 20% of our wealth and are missing an extra 14 million people to tax. And it's on par with India's spending because our economy is on par with theirs, despite the extra 1079 million people in their potential labour pool. That was a shit comparison. Fail.
The only viable and realistic measure of military spending is in relation to GDP and as you noted, ours is within the acceptable 3-4% range, the same as much of Europe. You and all of you other dopey idealists going to accuse them of warmongering too? Hell, even pacifist Japan's military spending is approaching 3%. Meanwhile, whilst no-one accurately knows what China's is, the speed and scale of their upgrading program lends most educated guesses to at least 5%.

 

[КГБ]

My comparison with India and Israel was not in economic terms, more so due to their geopolitical surroundings and geography.

Israel = surrounded my fucking Arabs who what to push it into the Mediterranean

India = china on the north east, Pakistan on the west.

Australia = FiJi Is NoT a DeMoCrACy! OMFG!

 

[moll.]

Moll, where does one draw the line for fighting terrorists. what if some African country kills 500 Australian tourists. are we going to liberate them.


Governments can not always be accountable for individuals in Nation states.

We draw the line by our priorities, our economic, miltary and political ability to intervene, whether it has widespread UN backing and the public's support for it. And I'm not just talking about Islamist extremists, although they are the most pressing issue at this point in time. I'm talking about widescale humanitarion intervention and relief. Zimbabwe sure as hell isn't full of terrorists, but I would still support intervention there if we had the means and UN support. Same for New Guinea, the Democratic Republic of the Congo and around the Gulf of Guinea.

 

[moll.]

My comparison with India and Israel was not in economic terms, more so due to their geopolitical surroundings and geography.

Israel = surrounded my fucking Arabs who what to push it into the Mediterranean

India = china on the north east, Pakistan on the west.

Australia = FiJi Is NoT a DeMoCrACy! OMFG!

But you were comparing military spending, so of course it's about economic means. And I'm sure both countries would increase their spending at the drop of a hat if they had the means to do so.

 

[moll.]

I never said lets be without a military. The recession is not the issue. Recession or no recession our excessive military spending is a misallocation of resources.

But it's not excessive. It's still well within the accepted bounds of 3-4%, and any planned increases in spending are likely to be postponed or delayed after next year due to a tightening of the budget and other economic priorities.

The wars have only served to increase the risk of terrorist attack.

This kind of claim is only speculation at best, and i would beg to differ, Whilst Iraq undoubtedly soured our reuptation in the Arab world, I have never supported it to start with. Afghanistan, however, is a moral war and it is difficult to see who is winning at this point, because the real victor will be the one who gains greater support for their cause.

None of the aforementioned countries has an advanced army that is capable of doing any real harm to Australia, with the possible exception of North Korea.

The idea that countries like Somalia which is in a state of anarchy, or Zimbabwe could do any harm is laughable. Ha ha.

Why shouldn't we intervene for the sake of humanitarian issues? That's half the battle in Afghanistan after all, attempting to give them economic and political hope. Besides which, Somalia poses a risk to our economic interests with the continued state of anarchy and the piracy which feeds off of this.

Fair point. But it was still none of our business and you are yet to demonstrate the tangible benefits of this so called "political capital."

The political capital is gained thorugh acts of humanitarian goodwill or through being seen as the "victim" and is spent on interventions that are even slightly questionable.
Imagine for a moment if Iran had invaded Afghanistan with the same aim as us. It would have recieved widepsread condemnation. Why? Because it lacks political capital.

I don't hate Howard in that I don't hate him any more than I hate Rudd or any of the neo-liberals dominate the Australian government.

Yes he presided over a long economic boom, whether it is the longest is questionable.

But are we to believe that minor changes made by Rudd since he took office have cause the recession.

Surely if he gets credit for the boom, he must take some responsibility for the bust.

I keep hearing that the 17-year boom is the longest. May be wrong, but at the very least it's one of the longest.
No more responsibility for the bust than Ruddkip. Besides which, the boom was caused by domestic and global factors, whereas the bust seems to be mostly caused by global factors out of control of our fledgling and weak government.

 

[ziki]

Nothing to do with us? We have been specifically placed upon the terrorist "to destroy" list, and it was Australians who were the main target on October 12, 2002.

but are we gonna waste billions of dollars a year just cause few australian were bombed??

Again, it was Australians who were targetted and killed in Bali, and it is Australia which has been explicitly threatened by Islamists.
Yes, Iraq should never have been started, and in fact the presence of a secular dictatorship in the heartland of the Middle East was actually a force for much peace in the short-term at least.
But how is a fundemanalist Islamist regime which openly supported Islamic terrorists hell bent on world destruction and the ushering in of a era of Muslim world dominance not a threat to Australia and it's democratic and liberal interests?

Muslim world dominance?? that would be a threat to EVERY non muslim countries out there... including the giants like Russia, China, UK and USA. Would we do anygood trying to send our amazingly SMALL amount of army to help?

What I don't get are all these "i HaTe HoWArDZ!!!1" idiots that are around. The invasion of Iraq had widespread support amongst the mainstream Australian public in March 2003. You all seem to have forgotten this. You also all seem to have forgotten that he did much for the economy and presided over Australia's longest-ever economic boom.

True that he did create the longest ever economic boom but it was also him who declare "war on terror", Im quite positive that they didnt find the so call "nuclear weapon of master destruction" in the countries they invaded. widespread support? i remember more protests on anti war then invade iraq.

whereas the bust seems to be mostly caused by global factors out of control of our fledgling and weak government.

this bust is certainly caused by global factors, as for weak government? Australia was one of the countries that havent completely fall into recession yet, i dont see anything else the government could do to help, in attempt to create jobs, stimulus package, lower of interest and potential tax cut. SERIOUSLY, WHAT ELSE COULD THE GOVERNMENT DO AT THIS POINT?

 

[moll.]

but are we gonna waste billions of dollars a year just cause few australian were bombed??

A threat to one Australian for the simple fact that they are Australian is a threat to all Australians. You could say that we are wasting billions of dollars a year on welfare just cos a few Australians are poor too.

Muslim world dominance?? that would be a threat to EVERY non muslim countries out there... including the giants like Russia, China, UK and USA. Would we do anygood trying to send our amazingly SMALL amount of army to help?

And you'll notice that all of those countries are fighting fundemantalist Islamic insurgencies in some way or another.
Our army could help in at least some small way to quell these movements and show that the Australian government wholeheartedly supports - with both words and actions - an end to Islamic extremism

True that he did create the longest ever economic boom but it was also him who declare "war on terror", Im quite positive that they didnt find the so call "nuclear weapon of master destruction" in the countries they invaded. widespread support? i remember more protests on anti war then invade iraq.

I think you mean "weapons of mass destruction". And the anti-war movement only picked up speed by the end of 2003 and has historically always been far more vocal than their numbers should give voice to. In April 2003, just after the invasion, the war had support of some 57% of Australians, with 36% opposed, according to Wikipedia, although the source hasn't been cited.
Governmental positions on the Iraq War prior to the 2003 invasion of Iraq - Wikipedia, the free encyclopedia

this bust is certainly caused by global factors, as for weak government? Australia was one of the countries that havent completely fall into recession yet, i dont see anything else the government could do to help, in attempt to create jobs, stimulus package, lower of interest and potential tax cut. SERIOUSLY, WHAT ELSE COULD THE GOVERNMENT DO AT THIS POINT?

Hahahaha you missed my point. I'm not abusing Rudd's government, I'm saying that the federal government is virtually powerless to stop the recession, and as such is weak. But there is more that he could do anyway, such as a new stimulus package, focused on infastructure and not tax cuts, and a re-introduction of WorkChoices.

 

[moll.]

Reintroduction of Workchoices + Tax Cuts would actually work.

Infrastructure, quite possibly, but it could seriously crowd out private sector investment and create a sense of entitlement in the private sector in Australia.

All I'm saying is if this grand experiment fucks up, you and I and the people on this site will be footing the bill...

Not the people enacting the legislation.

No, not tax cuts, unless it's only a changing of the lowest rate to make it for $20,000+ or something. Any tax cuts now to the middle or upper-classes are just going to be saved or used to write down debt. Not useful at this point in time.
Infastructure would work, because the whole problem with a recession is that there isn't any private investment. So government picks up the slack where the private industry is unwilling to and those who rely on a investment are saved from collapse.
It should also be noticed that because a lot of Australians are saving more now than before, it means that the government can safely go into a defecit for a few years without the fear of crowding the private sector out of the borrowing market, because they're not borrowing anyway and there are greater funds to draw on.
What grand experiment?

 

[Azure]

While I enjoyed the extra $1000 in my pocket last time, I seriously doubt the previous stimulus package worked as the government intended it to.

No and anyone saying so is fucking retarded. This recession is fixing the inefficiencies in our economy, not creating them...

My exact opinion 'nuff said.

 

[moll.]

Nah, you want people to reduce their debt when your on the the upward slope out of a recession. To all appearances we're still on the downward slope and my guess is that we're liable to stay that way for a while but will be recovering within 18 months (not fully recovered though).
At this point in time, increasing spending and investment is the top priority, no matter the costs, so that we can get to the bottom of the dip as soon as possible. People hoarding their money away doesn't help this.

 

[ziki]

A threat to one Australian for the simple fact that they are Australian is a threat to all Australians. You could say that we are wasting billions of dollars a year on welfare just cos a few Australians are poor too.

okay.... all one one for all aye???

And you'll notice that all of those countries are fighting fundemantalist Islamic insurgencies in some way or another.
Our army could help in at least some small way to quell these movements and show that the Australian government wholeheartedly supports - with both words and actions - an end to Islamic extremism

atleast some small way.... its costing us too much in times like this

I think you mean "weapons of mass destruction". And the anti-war movement only picked up speed by the end of 2003 and has historically always been far more vocal than their numbers should give voice to. In April 2003, just after the invasion, the war had support of some 57% of Australians, with 36% opposed, according to Wikipedia, although the source hasn't been cited.
Governmental positions on the Iraq War prior to the 2003 invasion of Iraq - Wikipedia, the free encyclopedia

you are right... it is mass destruction, very sorry. And in the wikipedia, it said that people were anti war until it started, and they soon protest after we joined. but i guess that wasnt really related to the fiancial crisis

Hahahaha you missed my point. I'm not abusing Rudd's government, I'm saying that the federal government is virtually powerless to stop the recession, and as such is weak. But there is more that he could do anyway, such as a new stimulus package, focused on infastructure and not tax cuts, and a re-introduction of WorkChoices.

i wouldnt mind another 1 grand in my bank tax cuts plays a huge part in saving our jobs, because companies pays less tax, they can hire more people.
sorry but whats workchoices? please give me link to check out thanks, im still learning all these fiancial and political stuff. thank you very much

 

[moll.]

atleast some small way.... its costing us too much in times like this

Our defence force cost us $22 billion last year, in part due to a budget blow out and unexpected costs. This year it's in fact only expected to reach 20.3 billion, as long as the same doesn't happen again, thanks to Ruddkip's program to cut down on "wastage".
That's about 2.0% of GDP. Which is less than the United States, France, South Korea, India and Indonesia, and equal to that of Britain. Let me say that again: THE PACIFIST, CHEESE-EATING SURRENDER MONKEYS IN FRANCE SPEND MORE PROPORTIONATELY ON DEFENCE THAN WE DO.
So much for too much.

you are right... it is mass destruction, very sorry. And in the wikipedia, it said that people were anti war until it started, and they soon protest after we joined. but i guess that wasnt really related to the fiancial crisis

Not soon after we started the war. Two years later. That's not soon.

i wouldnt mind another 1 grand in my bank tax cuts plays a huge part in saving our jobs, because companies pays less tax, they can hire more people.
sorry but whats workchoices? please give me link to check out thanks, im still learning all these fiancial and political stuff. thank you very much

Yeah, and that one grand would stay there and not get spent, defeating the purpose of Ruddkip giving it out. At least for infastructure we know that the money is getting spent and that it's also helping us in the future by getting rid of congestion on our roads, rail and ports.
45% of government revenue comes from income tax, with another 15% coming from GST, whilst only around 20% comes from company tax. It therefore stands to reason that any tax cut would be primarily based upon income tax cuts or maybe even the GST, which is pointless because consumer savings will become just that.
Also, lowering company tax wouldn't necessarily mean that they would hire more workers or even keep the same amount that they have. The extra money may well be spent similar to consumer tax cuts and used to write down debt, or could be just taken as extra profit and given out to shareholders as extra dividends.
Another idea would be to raise the unemployment, old-age or disability pension, because none of that gets saved, due to the incredibly low amount given.
You honestly don't know what WorkChoices is? Where have you been living, under a rock? Please don't tell me that your profile is right and I'm really debating with a 14 year old.
WorkChoices - Wikipedia, the free encyclopedia

 

[H@wkeye!]

Interesting thread, pitty i didn't come across it earlier.

First let me say something about the recession hype. Technicially, a recession is 2 quarters of negative growth, and if anyone remembers correctly, last quarter, we had a positive growth (0.5%) so, no we are not in a recession - yet. However, determining if we are in a recession, is actually impossible to do, till after you are well and truely in it, as you have to look back.

I haven't read the whole thread, so i could be restating some stuff, but whatever. What ended the 'great depression' was the military spending that came about due to the remilitization of Germany, followed by Britain, and eventially the US. This was an "economic stimulas" which IS what we need, but the problem is, how it's spent. That and it takes ages to filter into the economy.

Oh btw moll, GST is NOT included in the Rudd govt, that is distruted throughout the states through COAG (council of Aust governments). Lowering income tax would add a stimulas to the economy, but as again, it takes ages to work, and it's very had to get through parliment. Lowing the company tax, equally hard, but doesn't not necessilary go straight into companies dividends. Yes it may reduce debt, but reducing debt means they have to pay less to 'service' their debt, and so have more money spare to hire, or increase productivity. Growth looks much better to shareholders than just simple dividends.

And lastly, in Aus we have what economists call "automatic stabalisers" these are unemployment benefits, pensions etc. In periods of high growth (like 2 years ago) they get minimised and help to contract the economy, keep inflation under control, while in periods of low growth (like now) they expand, as more people lose their jobs, more people go to centrelink and it expands on it's own. This helps to expand the govt spending, and stimulate the economy. Yes the benefits are low (student allowance, you may soon learn, is even lower!) but they help, a little. And the idea is not save this money. Saved money helps growth, in the long run, but in the short run it has to get spent - to take advantage of the multiplier.

Thus concludes the first lession in ECONS 101

 

[moll.]

I haven't read the whole thread, so i could be restating some stuff, but whatever. What ended the 'great depression' was the military spending that came about due to the remilitization of Germany, followed by Britain, and eventially the US. This was an "economic stimulas" which IS what we need, but the problem is, how it's spent. That and it takes ages to filter into the economy.

I forgot about that. Thank you for bringing it up.

Oh btw moll, GST is NOT included in the Rudd govt, that is distruted throughout the states through COAG (council of Aust governments). Lowering income tax would add a stimulas to the economy, but as again, it takes ages to work, and it's very had to get through parliment. Lowing the company tax, equally hard, but doesn't not necessilary go straight into companies dividends. Yes it may reduce debt, but reducing debt means they have to pay less to 'service' their debt, and so have more money spare to hire, or increase productivity. Growth looks much better to shareholders than just simple dividends.

The GST is, however, federal legislature, so it can be amended or rescinded by the Rudd government. And it still normally gets counted in federal government revenue (because the feds collect it), but is then balanced by an equal amount in expenditure to the states and territories.

 

[H@wkeye!]

Ok finally read through all of this stuff.

Cut defence spending??? wtf?

let me explain. Defence spending is putting govt money into the economy, almost EVERYTHING our def force gets, comes from Aust (i was in the Navy for a while, so i do know). Granted it's not everything, but most. Our bullets are made in Lithlow, our ships are made in Freo, our food is sourced here, etc etc. The only thing we don't get from here is the high tech stuff.

So, reducing spending on def would just leave money sitting around in the govt purse (which i might add, is the same as throwing it away, as money the govt doesn't spend - ie. surplus budget - does not get interest, or spent, effectively it simply reduces in absolute value as it's effected by inflation.

And to those people who say increase import tariffs, get off your fucken high horse! That's EXACTLY what made the great depression so bad! the countries were on the gold standard, then they left it as things started to go to shit, so they "competitively devalued" their exchange rate, so their exports would become cheaper to other countries. Then the other countries did this and it all went to shit! Increasing taxes on imports would just make imports more expensive, and give money money to the government, it would have no immediate effect on demand for imports.

Moll, yes the GST is fed, but there is NO way they'd ever get to spend it.

See, the problem with economics and economies, is it's all theory's and precidents. We hyphosise a lot and that's why we get situations like this. There is no clear cut answer, and so nice discussions like this will always ensue.

Problem with stimulas packages, is while they give a bundle of money to the economy, which is what we need, is they also lead to consumer depression (for lack of a better word) they signal that the economy is in the shit, and so people lose confidence. What we need is a nice warm cup of confidence, on an internation scale.

 

[Boxes]

do you guys think this second stimulus package will be like the first one? just a nice sum of money to all those who recieve benefits? i heard it is but it'll be even bigger this time.