Australian economy completely avoids recession (1 Viewer)

[kokodamonkey]

intervention just means that rather than the most efficient outcome we get a humane outcome

 

[spyro14]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

The central bank encourages debt and discourages savings by keeping the rate of interest artificially low. It keeps it artificially low by creating new money.

I am saying get rid of the central bank.

Australia has one of the highest interest rates if not the highest out of all the advanced OECD economies.

What you said was just stupid, your presence insults me.

 

[loquasagacious]

'Planck' no one is stopping you and your rapture ready pals from buying a farm and a gun and holding out till 2012.

Actually I'm pretty sure that there are some pretty restrictive laws around the second part of that....

Also suggesting that a group who disagrees with you should effectively leave society does not address their argument in any meaningful way. And more importantly by refusing to debate an issue or even consider* a change to the status quo you are essentially embracing stagnation.

*as opposed to implement

 

[copkiller]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

Australia has one of the highest interest rates if not the highest out of all the advanced OECD economies.

What you said was just stupid, your presence insults me.

The cash rate in Australia is absurdly low compared to historical rates in Australia and everywhere else in the world. The fact that it is slightly higher than the even more outrageously low rates in some other countries does not make it in any way appropriate.

Just take a look at the RBA's own data:

RBA: Cash Rate Target

The current rate of 3% is the lowest it has ever been.

Now compare this to the inflation rate, which by the RBA's own calculations is 1.5%. This gives us a real interest rate of just 1.5%.

Reserve Bank of Australia - Home Page

and that's if you believe the RBA, which has every incentive to underestimate inflation and uses flawed techniques that exclude key prices. With the real inflation rate, the real interest rate in Australia is likely to be close to 0, if not negative.

 

[copkiller]

Are you claiming such outcomes are pareto efficient..?
Mabye it's just your poor grasp of the english language, but your premise, and subsequent conclusion, seem unconnected. The 'market' either allocates resources most efficiently, or it does not.
Yes, 'intervention' disrupts the market process, but this is the precise aim of an intervention...to stop unfavorable market outcomes, granted, intervention can result in unfavorable unintended consequences, but that does not rule out the case for all interventions.
Do you think that people naturally take actions that expand the apex and nadir of cycles, or do you not,
Are you claiming speculative investment bubbles in financial markets have no endogenous component? Do you assert all agents, and thus the market on a whole is 'rational', if you do (and thus dismiss all empircal studies into the matter), atleast I can understand your ill-concieved position.

We are not claiming that markets (or the agents in them) are perfectly rational, merely that they will produce better outcomes the less they are regulated.

Are you claiming that the regulators are perfectly rational?

 

[lolwth]

Actually I'm pretty sure that there are some pretty restrictive laws around the second part of that....

Also suggesting that a group who disagrees with you should effectively leave society does not address their argument in any meaningful way. And more importantly by refusing to debate an issue or even consider* a change to the status quo you are essentially embracing stagnation.

*as opposed to implement

Haha actually if he buys a farm he gets subsidised gun licences and easier access to prohibited firearms etc

 

[Iheartgays]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

Do some research.

Australia's debt to GDP ratio is the lowest in the OECD and is projected to peak at 14%. Compare this to Japan with 180%.

Btw I encourage you to find 5 countries on this earth who are not currently in deficit. As I have posted before in this thread, there is no 'silver bullet'.

Interest rates are predicted to rise next quarter.

In other words you are wrong, wrong, wrong!

That is all.

So because someone has it worse than you means you have it great? If I beat some kid to death but I only make you a paraplegic, does that mean that you're fine? Because if it is, let me be the first to say "cheer the fuck up, it could be worse."

It has always been the role of the Liberal party to clear Australia out of Labor debt.

 

[Random_dude]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

So because someone has it worse than you means you have it great? If I beat some kid to death but I only make you a paraplegic, does that mean that you're fine? Because if it is, let me be the first to say "cheer the fuck up, it could be worse."

It has always been the role of the Liberal party to clear Australia out of Labor debt.

yes!!!

by the way, why have we missed the brunt of the recession? and do not say labor.

 

[S.H.O.D.A.N.]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

yes!!!

by the way, why have we missed the brunt of the recession? and do not say labor.

Australia was never going to be in as bad a shape as the rest of the world to begin with, but the fact that we missed a recession is actually due to Labour's stimulus whether you like it or not. Any economist will confirm that for you.

For a look at what our economy would be like had Labour not acted as they did, Canada is probably the closest example (their economy being so similar to ours, both in terms of government regulation, and market structure), where the Conservative government was slow to pass a stimulus package, and passed a half-arsed one when they were forced to by threat of no confidence.

The other significant reason is the Central Bank - the RBA was able to implement the single biggest economic stimulus, per capita, in the world by dropping interest rates 4.25%. This rate drop combined with stimulus payments was enough to completely counteract the drop in Australian incomes which has occurred so far. Something like this would not work in America, though, because most Americans have fixed rate mortgages (most Aussies have variable rate mortgages).

It has always been the role of the Liberal party to clear Australia out of Labor debt.

No it hasn't. Liberal leaders of the past have racked up some pretty impressive debt themselves, while Labour leaders of the past have often been debt reducers (e.g. Hawke-Keating).

Liberal and Labour both have political marks for and against them in Australia's history, but citing either one as an angel or a devil in terms of public debt has ;ittle grounding. I guess the truth is, Australia has simply never been terribly prone to running up enormous public debt, under any government.

 

[spyro14]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

The cash rate in Australia is absurdly low compared to historical rates in Australia and everywhere else in the world. The fact that it is slightly higher than the even more outrageously low rates in some other countries does not make it in any way appropriate.

Just take a look at the RBA's own data:

RBA: Cash Rate Target

The current rate of 3% is the lowest it has ever been.

Now compare this to the inflation rate, which by the RBA's own calculations is 1.5%. This gives us a real interest rate of just 1.5%.

Reserve Bank of Australia - Home Page

and that's if you believe the RBA, which has every incentive to underestimate inflation and uses flawed techniques that exclude key prices. With the real inflation rate, the real interest rate in Australia is likely to be close to 0, if not negative.

Inflation and employment go hand in hand with respect to macro-economic policy, the constant fear of rapidly increasing unemployment began to override the importance of the typical inflationary target. Saying that our current interest rate is low in comparison to historical trends for Austalia is probably pretty spot on, however it was a natural response to the threat of the GFC. The main advantage monetary policy has over fiscal policy is that it can be adjusted far more frequently and so if and when it is too high or low it can be fixed much quicker than what fiscal policy could.

And don't be stupid, if the RBA says the official cash rate is 3%, then that's what it is, they arn't going to lie about the nominal or real rate. I can tell you one thing, the real rate certainly isn't close to 0 and definately isn't negative, not that it matters since the rates will be going up soon anyway.

Oh and why would the RBA "underestimate inflation" when it's already below its target.

 

[Random_dude]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

Australia was never going to be in as bad a shape as the rest of the world to begin with, but the fact that we missed a recession is actually due to Labour's stimulus whether you like it or not. Any economist will confirm that for you.

For a look at what our economy would be like had Labour not acted as they did, Canada is probably the closest example (their economy being so similar to ours, both in terms of government regulation, and market structure), where the Conservative government was slow to pass a stimulus package, and passed a half-arsed one when they were forced to by threat of no confidence.

The other significant reason is the Central Bank - the RBA was able to implement the single biggest economic stimulus, per capita, in the world by dropping interest rates 4.25%. This rate drop combined with stimulus payments was enough to completely counteract the drop in Australian incomes which has occurred so far. Something like this would not work in America, though, because most Americans have fixed rate mortgages (most Aussies have variable rate mortgages).

thankyou shodan

how on earth do you do multiple quoting?

this may sound ignorant, but i rally don't know, what are variable mortgage rates?

are you doing something about economy at uni or are you just reading the newspaper.

i blame the banks for the recession.

 

[copkiller]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

Inflation and employment go hand in hand with respect to macro-economic policy, the constant fear of rapidly increasing unemployment began to override the importance of the typical inflationary target. Saying that our current interest rate is low in comparison to historical trends for Austalia is probably pretty spot on, however it was a natural response to the threat of the GFC. The main advantage monetary policy has over fiscal policy is that it can be adjusted far more frequently and so if and when it is too high or low it can be fixed much quicker than what fiscal policy could.

And don't be stupid, if the RBA says the official cash rate is 3%, then that's what it is, they arn't going to lie about the nominal or real rate. I can tell you one thing, the real rate certainly isn't close to 0 and definately isn't negative, not that it matters since the rates will be going up soon anyway.

Oh and why would the RBA "underestimate inflation" when it's already below its target.

Ok lol, I mistakenly assumed you would know what the "real interest rate" means. It seems I gave you too much credit.

perhaps this will help; http://www.google.com

Try to understand what you're talking about before you post.

 

[Josh22]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

No it hasn't. Liberal leaders of the past have racked up some pretty impressive debt themselves, while Labour leaders of the past have often been debt reducers (e.g. Hawke-Keating).

lololololololol you obviously have no idea of the history of Australia's economy...

may i suggest Google enjoy

 

[Failure_123]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

The unemployment rate and inflation rate are lower than expected, so why is the Labour government still spending? this is just going to expand our debts.

 

[S.H.O.D.A.N.]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

lololololololol you obviously have no idea of the history of Australia's economy...

may i suggest Google enjoy

How about you take your own advice. You'll get a little surprise.

Australia's public debt under Rudd is, as a percentage of GDP, the highest it has ever been at about 18%. Under Howard it reached about 17% or so.

However, both Labour and Liberal governments have histories of paying off, lowering, public debt. E.g. Hawke-Keating, Howard-Costello. Likewise, the debt which Hawke-Keating were paying off was inherited from a Liberal government, not a Labour one. Admittedly, Fraser inherited a lot of debt from Whitlam, but IIRC he increased it rather than seeing fit to lower it.

And then there's the point that, as I said previously, Australia's public debt has simply never been all that high - even with Rudd's stimulus plans and such, public debt in Australia is the lowest in the developed world. And no, that's not a still a bad thing because our government has one of the strongest credit ratings in the world alongside extremely consistent and reliable income sources which are only going to get better as time goes by (due to developing world growth).

So, again, heed your own advice: use your god damn brain before posting.

 

[murphyad]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

Argh S.H.O.D.A.N.

It's just a mindless troll. Don't waste your time.

 

[04er]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

hoorah!

 

[Enteebee]

Re: OKay guys, Australia never 'avoiced' the recession, Rudd was not the hero

debt's cool

 

[Jeremykid]

The recession is estimated to last for one year but the budget deficit is estimated to last for 7 years . And its us who have to pay.

 

[04er]

the price we're paying is a lot less than what it could have potentially been. btw Bernanke today announced that the recession is most likely over, at least for the US.