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| quote: | Originally posted by Domesticated
a) We're not even in an extreme economic contraction yet. There is far worse to come. |
the government is in-line with suggestions by the IMF to what we should be doing within the context of the global slowdown.
| quote: | Originally posted by Domesticated
b) Why should governments run deficits during recessions? |
in a situation like the world is in today, a government should step in to pick up the slack in the economy to prevent too much contraction. its well established sound economic policy.
| quote: | Originally posted by Domesticated
c) This happens every time a Labor government takes power, regardless of recession fears. They put the state/country into massive debt and then laugh it up when the Liberal government gets back into power and gets demonised for cutting funding and raising taxes (i.e reversing fuck ups and recovering money that should never have been spent in the first place). |
sorry, but you have no idea what the fuck you're talking about. look at the state of the economy during the fraser years when howard was treasurer.
wiki
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Fraser's negotiations with the ACTU saw him lose control of a wages explosion in 1982 just as the mining boom had ended. The economic crises of the early 1980s brought Howard into conflict with the economically conservative Fraser. As the economy headed towards the worst recession since the 1930s, Keynesian Fraser pushed an expansionary fiscal position much to Howard's and Treasury's horror. With his authority as treasurer being flouted, Howard considered resigning in July 1982, but, after discussions with his wife and senior advisor John Hewson (Liberal Party leader himself from 1990 to 1994), he decided to "tough it out".[26] The 1982 wages explosion—wages rose 16 per cent across the country—resulted in stagflation; unemployment touched double-digits and inflation peaked at 12.5% (official interest rates peaked at 21%). |
the keating government was the single-biggest liberalising government in the history of our country. the prosperity of the howard years is due in part, to the keating-hawke reforms at freeing up the nation's economy. the country was well on the way to economic recovery by the time howard won the election.
the keating government handed on an economy with relatively similar statistics, except they had freed the economic structures of the nation which would deliver growth in the years to come.
the howard government's reeling in of the keating era deficit was certainly good policy and all credit to them. but that's easier to do in a growing economy due to rapidly growing investments in things like banking, and a lot of people suffered hard times due to significant cuts in government spending.
if you actually opened your other eye and listened to what the economists of australia are saying about the latest budget, its a mixed bag. however, the central issue is whether the 4.4% growth predicted by the same officials that helped costello prepare his budgets, is too optimistic for the re-paying of the deficit as outlined in labor's plan.
there is nothing wrong with running temporary deficits when times call for it. the fear-mongering by the impotent opposition is nothing but bullshit. for turnbull to say the liberals could deliver a decent budget with a surplus is pure fantasy in current global conditions. there is a reason virtually every government will be running deficits for the forseeable future, and its not because everyone wants to frolic in heaps of debt.
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Stimulating the economy?
