How does the stimulus payback work?

Discussion in 'Property Market Economics' started by Property Baron, 3rd Aug, 2020.

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  1. Property Baron

    Property Baron Well-Known Member

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    Sooner or later the stimulus measures will have to come to an end, they can not go on forever even if the Pandemic does.

    In what forms will the debt be paid back?
    Who will be hit hardest in the payback,office workers,public servants,property owners, tradies, businesses??
     
  2. JohnPropChat

    JohnPropChat Well-Known Member

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    I hope they increase GST as a broad based consumption tax.
     
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  3. Robbo80

    Robbo80 Well-Known Member

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    What is the interest rate on the debt? Is there a need if below inflation?

    Also not sure how we can be expected to pay this back without govt pulling all levers to get things back to boom times. Many large doners are lobbying for the opening of immigration flood gates. Is that the solution?
     
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  4. Jezzah

    Jezzah Well-Known Member

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    I thought we had deflation last qtr
     
  5. Jezzah

    Jezzah Well-Known Member

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    here you go
    upload_2020-8-4_0-18-40.png
     
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  6. Spiralkut

    Spiralkut Well-Known Member

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    Easy fix just let 1million Hong Kong recidents in. I'd vote for that.
     
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  7. Property Baron

    Property Baron Well-Known Member

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    Make no mistake this has to be paid back - it will take generations. In my opinion the Federal government are behaving as if there will soon be a vaccine or a magic cure(they better be right:eek:).I know it's stimulus but this is not a time to waste a cent in my eyes. Strange for a conservative government:rolleyes:
     
  8. Property Baron

    Property Baron Well-Known Member

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    I wonder if things like negative gearing and frankin credits we be looked at in the future if we are still in the same boat in another 12-18 months time?
     
  9. AndrewM

    AndrewM Well-Known Member

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    To say the stimulus is wasting money is a bit of a stretch, they are throwing a lot of support at impacted people to avoid a large portion of the population falling into deep poverty.

    In relation to the original post, I think the Government would be crazy to start thinking about paying the debt back with the economy in such a precarious position. It will take a very long time to pay back but it may even be a case of maintaining a lot of the debt so that it reduces relative to GDP - I think if the economy can grow faster than debt costs once the crisis is behind us it's far less of an issue.
     
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  10. Property Baron

    Property Baron Well-Known Member

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    Ok I never said stimulus is a waste of money. I just think every cent needs to go to people who need it and I'll leave it at that. Theres a whole other thread on it....

    Also I never said government should look at paying it back now, more when they finally do like 18-24months from now or even longer who knows.
    This stimulus is not free money, it will impact generations of people in some way or other.
     
  11. MTR

    MTR Well-Known Member

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    We can start with deductions from Dan’s Generous government super.:p
     
  12. Noobieboy

    Noobieboy Well-Known Member

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    Print a few billion Australian dollars and pay the debt. Especially the AUD denominated one. Might increase inflation. Which might push prices of assets up, from property to shares. Dept problem solved.

    Similar to US crazy debt. They do t technically have to pay any of USD debt back. Currencies are not gold backed. So just print the money I say. Happened before in history more than once. Will happen again.
     
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  13. Property Baron

    Property Baron Well-Known Member

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    But America is a faster growing country.
    Printing money to pay our stimulus could have very negative effects on the value of our dollar, there may be more dollar bills but they won't be worth as much?
     
  14. Robbo80

    Robbo80 Well-Known Member

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    Been doing some reading into how MMT works. Mind blowing stuff.

    Basically we shouldn't think of the Gov as a household. Gov controls all supply of that currency so there will never be a point where they can't pay it back (unlike a household which cannot issue new currency). So deficits are not inherently bad = more money in the hands of private sector and higher taxes does the opposite (like an accounting book entry DR & CR). Only thing to worry about is inflation.. which is current not present, so they can issue as much as they want right now.

    There are also talks of interest rates (old QE model) being made redudant completely, and to just fix them at zero and use fiscal policies instead to control inflation and social issues!
     
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  15. KJA182

    KJA182 Well-Known Member

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    RBA monetizing government debt anyway. Sky is the limit

    Inflation is not rising prices. Inflation is expanding the money supply (which is what is being done)

    expanding the money supply sometimes manifests itself in rising consumer prices, or rising asset prices, or both
     
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  16. tedjamvor

    tedjamvor Well-Known Member

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    GDP growth due to the economy not ******** the bed. General taxation increases with GDP growth.

    Government debt isn't like Consumer debt (well some billionaires work like this), essentially you grow your asset base (GDP) more than your debt increases, whilst never fully paying it off.
     
  17. Someguy

    Someguy Well-Known Member

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    How to convince Chinese to come here when we are becoming so anti Chinese?
     
  18. KJA182

    KJA182 Well-Known Member

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    HK is not China
    HK people are not the same as the CCP
    Dislike for CCP is not the same as dislike for chinese
     
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  19. Someguy

    Someguy Well-Known Member

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    Plenty of CCP support from the HK population, how to seperate those from others when it comes to letting people in?

    Also the average punter can’t tell the difference from a HK Han Chinese and a mainland Han Chinese
     
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  20. Archaon

    Archaon Well-Known Member

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    Venezuela is doing so well.
     

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