When ‘good’ is bad and bad leads to good (maybe)
February 5th, 2009 by Daniel Young | Filed under Life.I popped to my local pub for a beer (it turned into two) with a copy of The Australian after work today.
I was reading about the stimulus package – a topic that I blogged on earlier today – and it occurred to me that the focus is on how bad things are right now.
Which begs the question: How good were things before the financial system/ economy went tits up?
Yes, we’ve enjoyed many years of financial growth and prosperity, but what do we have to show for it? Here are some thoughts…
- A increasing gap between rich and poor
- A public health system in crisis, an education system in Australia requiring a ‘Revolution’
- Bigger TVs
- No progress in the Middle East – a more complex, confrontational situation (if you believe the media)
- Apparently, no change in The third world
- A climate change – the result of many year’s excesses
- An overnight swing from surplus to deficit
The list goes on – I’m sure there are some positives that we can point to.
The irony is that it requires a financial downturn for people to take stock and actually assess their situation and make steps to improve it for the better. Will a $950 bonus from the Government really make anything measurably better? OK, it might ease the pressure for a lot of people – that’s great - but its not sustainable and still needs to be paid back by someone.
It strikes me that throwing money at a problem caused by an obsession with money won’t change the fundamental problem.
I think my main problem is that the Government bailing out the economy prevents us really ever confronting the money thing – its a missed opportunity. It makes the world go round after all.
Subscribe Feed (RSS)
Hi Dan – I think there’s too much whingeing about the stimulus package. Of course the effects will be short term. That’s exactly what they’re trying to do – to provide a stimulus.
I think the areas the Gov’t are targeting (low income earners, infrastructure projects, schools) are exactly the sort of thing they should be doing. They’re not bailing out banks in Oz, they are guaranteeing deposits instead – which I would argue benefits the humble consumer more than the banks. In summary, I think the government is doing a reasonable job in the circumstances, but I would like to see more tax cuts as that would be a more permanent stimulus to the economy – both to individuals and corporations.
I take it you dont agree with the stimulus package. Fair enough. But you havent discussed/offerred any alternative. Would you rather the government do nothing? Or what would you like to see?
LA
Thanks for your comment Lakun.
I would argue that the effects will be long term in the form of the budget deficit.
I just fail to see how putting money in people’s pockets represents a sustainable or wise use of public funds. I’ve heard figures that up to 80% of the pre-Xmas budget package went into gambling. What positive impact has that had on the economy?
I don’t have a problem with investments in things that are likely to deliver a return on investment, such as education, infrastructure etc.
To that point, why didn’t the Government re-direct extra money to teacher training courses or take steps to make this a more attractive career option – thereby addressing unemployment and putting in place a positive foundation for the future?
Hi
At the risk of sounding like a labour party hack(!), of the $42bn package, most of it – $30bn – is being spent on Big Kev’s Education Revolution, Public Housing, Energy projects, road and rail upgrades, etc. All good stuff in my opinion. The rest of the $12bn is split amongst handouts to low income earners, single parent families, farmers in hardship, and an eductaion/back to school bonus.
I think if low income earners, farmers in hardship etc can get a small helping hand to stave off potential foreclosures on their property, etc, then that’s better than not helping. I would agree the limit set is way too high – someone earning $79k per year is still eligible for a handout – it should be set much lower so that they’re only helping people truly in hardship. But that’s politics and this package is obviously designed to win votes.
I think that we need stimulus, but that we should be looking forward – not backwards. The New Deal DID promote recovery, but we don’t need to dredge it up to prove that investing in our infrastructure now will promote recovery. I think that now is the time for NEW ideas, not a re-hashing of history. Also, I think that though there are echoes of the New Deal era in what is happening now – the specific details are different. I agree that it needs to be the RIGHT changes. Anyone else read Thinking Big (http://thinkingbigthebook.com/)? It’s a great guide to the new progressive agenda, and suggests the specific funding that I think would bring about change. It’s interesting to compare that to Obama’s bill… Certainly Thinking Big doesn’t contain funds for building a Mafia Museum in Las Vegas…. the stimulus bill DOES.