So crazy it just might work
This evening I was out with a friend and since we are both without doubt consumed solely by the most cerebral of matters, the conversation soon turned to prat-level debate of the economic stimulus package and how it could, or should work.
( Rather long discussion about stimulus delivery technology, my wacky unstoppable theory of super-as-fiscal-lever, and economics as not much in the way of a science. )
( Rather long discussion about stimulus delivery technology, my wacky unstoppable theory of super-as-fiscal-lever, and economics as not much in the way of a science. )
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I really haven't paid that much attention to the commentary on the Helidrop payments but I make this observation: Outside primary industry, which is a complete bastard to provide stimulus too, our major industry sector is services. The best way to stimulate that is too inject cash into the economy. Yeah not everyone is going to spend it immediately, so you inject more than you need. Any method, like vouchers, that tries to make people spend, is overly complicated and quite probably would delay the cash injection til after the point you need it. Giving people money is probably the most effective way of achieving economic stimulus.
Why so fast, because stimulating the economy AFTER everyone has been made redundant or the businesses have filed for bankruptcy is fucking pointless. I mean you can't guarantee that people won't be laid off but you can pretty much guarantee that they won't be rehired because of a stimulus package comes in after the fact.
We then moved on to the idea of using the compulsory ( ... )
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Agree re critiques of the economists' open letter, it wouldn't be quick enough, although I would point out it was originally sent about two months ago.
The super arrangements thing -- which would require enormous amounts of legislation, preparation and changes to existing work agreements -- wasn't about injecting cash into the economy, just controlling where it was, i.e. in the hands of the community circulating and sustaining businesses and jobs instead of being put away in super funds, whatever they might be investing in (overseas stuff as much as anything I guess). I'm not sure I understand precisely how diverting funds from super wouldn't be a stimulus whereas diverting funds from government (i.e. tax funds, or the government's ability to obtain credit brought about by responsible government spending and taxation) would be?
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Don't you find it a bit disconcerting that at times of such wealth (at least in the Western world) the entire global economy (and presumably the well being of a large number of people) is largely dependant on discretionary consumption?
Certainly, a directive of "we have a problem, go forth and spend" suggests to me a fundamental disconnect from reality in the system. It's as if there are a bunch of monkeys at the top twiddling some knobs and praying it'll all be fine(tm), each reinforcing each others religious belief in the system. The plebs downstairs are just drinking the Flavor Aid.
Of course maybe stimulus, just like economic growth is just a very potent meme.
Mg
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However.
The unemployed get shite. PhD students (living below the poverty line) get shite.
Bring back Keating's working nation, bring the dole back to a living allowance, increase the level of youth allowance, increase the PhD stipend (20k a year, tax free, at the moment).
The best thing I can think of is to payout state governments to reduce payroll tax, except there is no way to ensure that State governments will not cut back other promises concomitantly.
Finally, we are getting tax cuts... just 3 months later than what the opposition wants brought forwards.
This is all temporary stimulus. There is a tonne of long term building that should be separate to the short term spend. It's nuts to put them together in an emergency mini-budget.
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