What if Labor got in?

The "Green" economy would be half that again

 

So we should import people that don't pay tax? Sorry @datto, do I need to learn to internally add a /s when I read your posts?

 

Considering the Federal government are essentially deploying Labor policies - massive stimulus, welfare and support for industry - probably not that much. We probably wouldn't have as much argy-bargy between the Feds and the states though. Probably would also not have 80% tariff on barley imports to China.

 

Are you saying the 50 billion black economy doesn't exist?

Well you haven't lived in Mt Druitt.

And of course it creates jobs. Public servant jobs eg Centrelink staff, law enforcement officers, parole officers etc etc. And these aren't cashie jobs either, apart from some little extra on the side they may get.

 

Interesting $60 billion forecasting error from the supposed superior economic managers today....

 

Another case of over-promise and under-deliver.

 

Until the day policies that support rising asset prices AND increased purchasing power die , property is going to stay aloft.


That day won’t be until boomers are out of the market, in my estimation that’s still 5 years away.

 

Are you talking about family income of $110,000 gross?

 

What?

they were in Power until 2013 .

And things like the NDIS that they introduce would take years to show true extent of their exponential cost and further .

the scheme can also now not be unwound as ts politically thought to do.

 

So you knew things were not going to get as bad as they could off?

If so how did you know?

In our business I was convinced we would need to take advantage of the job keeper initiative.

I was convinced but our business did well and we didn’t qualify.

I run 1 business and I didn’t forecaster the impact.

the feds were estimating on the fly and creating policies to protect millions on the fly.

surely criticising they now in hindsight is poor form?

what decision would have made in the midst of Italy and UK overwhelmed with Covid. It’s easy to say things now.

 

Absolutely (though if a revised figure was proposed, $120000 would be the maximum for me)

 

Mine is not a criticism of the policy nor of the outcome. They over-estimated the cost and have copped flak for not spending swathes of borrowed funds, not digging as big a hole as they were expecting and leaving a larger debt-legacy to future taxpayers (under-spent).

Would it be more palatable If they massively underestimated the demand then had to cut the projected support months early in the same way as other popular interventions have been curtailed?

 

It's the $60 billion in stimulus that may now not reach the economy that is of interest to me . Will some of this flow through to jobseeker? Probably, but I doubt all of it will.

 

In my view , 2008 was a supply (credit) crisis, demand remained, the labour market weathered it and within a few months the FCS was in , banks were backed and credit was back on.

This is unique in that it’s not a credit supply problem, it’s a demand problem. I think what’s happening is the governments 2008 like response model has kicked into overdrive but the underlying conditions are the opposite. What is the outcome of flooding the economy with liquidity whilst there’s no demand (unemployment)?

The federal government and the RBA are currently the employer and buyer of last resort. If they stop supplying that credit into the market , initially via a hard stop on JobKeeper, the private market will have to counter through lending. How are they going to do this when people are unemployed?

Right now is the most absurd period in the last few decades.

There is a flood of credit chasing nothing but debt, and , people chasing more debt. There’s no price discovery, I’m not even sure there is a way to prevent this failing other than the Federal government remaining the buyer and employer of last resort.

 

Isn't it to stimulate demand through that liquidity to simulate a 'normal' economy while, hopefully, the real demand slowly tries to catch up?

 

It’s not sufficient for growth, only a backstop.

Current liquidity (government) is to ensure solvency. Excess credit availability (banks) afterwards when unemployment remains high will mean nothing if borrowers can’t take it on.

Were undergoing deflation however the inflation risk in 3-5 years is real.

If a debt deflation spiral occurs, there is no stimulus program good enough to stop it.

 

You make some interesting points. Out of curiosity, what do you think of this?

https://www.theage.com.au/business/...ay-out-of-this-recession-20200526-p54wf1.html

 

Hush you. Everyone knows you can austerity your way out of a recession.

 

I'm genuinely interested in the point of view and how it could work.

 

Here are the key parts of the article.

It is a downturn in spending that the RBA really feared. This from Phillip Lowe:

Of course, the Labor party should have shown the same bi-partisanship that the LNP displayed during the GFC, and forced a division on everything.