Debt and Deficit - Coalition Budget Emergency

[Play by Numbers]

The end of the carbon tax did nothing for power bills in Victoria, which have steadily and dramatically increased since abolition.

Regardless of your position on the merits of the tax, it's removal has done nothing for productivity and had no significant impact on cost.

The abomination that is direct action should just be turfed. If we can't get an ETS or tax scheme right, then why bother with billions in handouts to industry. It's bribery using an issue as policy cover. 200$ million to x company, for 300k back in donations, all the while a segment of muppets can say look, they are doin good stuff for da climate

 

[Ratts of Tobruk]

FFS your moronic thread about the ALP and Essendon was bad enough. The ALP doesn't work you too hard does it?

About as hard as your brain works you.*

And if people are wondering what thread Meds is talking about, it'd be the first one linked in my signature, from Aug 2013. It says you can't trust what the Liberals say and that their economic policies don't add up and won't add up... A correct prediction about this turn of government, unlike Meds' predictions of doom which I'm guessing he's been making for 6 or 7 years, right? Like the AWU thread saying something big is about to come out about Gillard, I guess we will wait forever for the prediction to come true while Meds works his hardest to bring it about by promoting austerity worse than what Europe has tried... For everyone else, feel better knowing that Australia responded to the banking collapses of the early 90s by strengthening our regulations (something APRA continue to do). Oh, and weren't there repeated income tax cuts throughout the 2000s, so according to right-wingers that should've created a better economic return (the mythological "Laffer curve")? Alas reality was very different to the hypothetical. Another more obvious prediction: the response to that will be that the income tax cuts weren't big enough for the rich...

*Don't worry, Power Raid, I haven't changed my answer to your repeated questions on this - the joke is that the ALP doesn't work me at all.

 

[medusala]

The abomination that is direct action should just be turfed.

Yes utter stupidity and should go. Can that, all subsidies to renewables and the NBN.

Abbott is a gutless wonder for not doing so.

A correct prediction about this turn of government, unlike Meds' predictions of doom

Greece blown up, EURO banks still stuffed, iron ore and coal price stuffed, China markets plummeting. Yep, its all good.

Australia has a worse budget deficit than Portugal, Ireland and Greece thanks largely to the ALP

Where is your criticism? Hundreds of billions of $ wasted and yet all we get from you is pom poms.

Did you have to take a paycut when you went in to opposition? Did you actually work for Wayne Swan?

(the mythological "Laffer curve")?

Better to let everyone think you are a clueless muppet than prove it.

 

[CountryRace]

OUR AVAILABLE MONEY is 3% cash printed by the Reserve Bank of Australia. 97% is created when loans are issued by local banks. This is inherently unstable and an exceedingly expensive way of money creation. It has an awful compound interest situation where we finish up with more debt than money. Individuals, businesses, states, government and the nation are sinking into debt at a rapidly increasing rate. The media tells us we are ok because we are not as bad as some other nations. Yet other nations with public banks are surging ahead. One national bank would likely fix this. Our money system is also a monoculture and is linked to international currencies. If they go down, we go down. We need you to set up 'alternative currencies' in your district tomorrow.

WORLD MONEY
The World Gross Domestic Product was $63 trillion in 2010. The financial industry is many times bigger than the value of all goods and services produced in the world. Shares and bonds are about the same value of world GDP, but derivatives trading and foreign currency transactions are ten and fifteen times bigger than World Gross Domestic Product.
For 2010
The World Gross Domestic Product: $63 trillion.
Volume of shares and bonds traded: $87 trillion.
Value of Derivatives: $601 trillion.
Currency trading: $955 trillion.
[source: http://www.economicsinpictures.com/2011/09/size-of-financial-markets.html]
Conclusion: The world has gone mad.

http://www.moredebtthanmoney.com.au/index.php

 

[Elroo]

You just don't get it the Liberals goal is to make this years deficit as bad as possible as it can be blamed on Labor.
By doing this they then think they'll have carte blanche to do what ever they like.

Wise words.

 

[Ratts of Tobruk]

OUR AVAILABLE MONEY is 3% cash printed by the Reserve Bank of Australia. 97% is created when loans are issued by local banks. This is inherently unstable and an exceedingly expensive way of money creation. It has an awful compound interest situation where we finish up with more debt than money...

I've seen this sort of stuff quoted a bit recently and I looked into it, but I think whoever is spreading this idea is being a bit nefarious in framing it in such a paranoid way. The whole world effectively runs on debt, as it's about the confidence in whether the new bonds will be paid off rather than whether the grand total of all debt can be paid if it is all called in immediately. And no-one really cares about that latter thing. Despite what the current Govt says a household budget is very different to a business budget which is quite different to a government budget.

Having said that, there is still some worth in using a household metaphor and so I will. I see it as being similar to offering someone a Credit Card. There is no reason to have a Credit Card if you have a constant stream of money through a reliable income. But if you know you are going to pay off the credit card without a problem at the end of the month, then you are hit with no extra interest and you have however many thousands of extra dollars. And if you can use those extra thousands to earn a bit more through buying stocks or whatever, maybe it makes sense to take on a Credit Card that will hit you with interest, but overall you are still well ahead due to the extra capital you're investing.

Given the world economy is based on the productive ability of billions of people there is a lot of reliable income coming down the tube and so inevitably you end up with the vast majority of money being numbers tapped into a computer. Debt seemingly created out of thin air. But it is only a problem when the debt can't be paid off. So if you miss your mortgage too many times, you lose your house, and if too many people lose their houses it infects the places who had those debts on their books (see the sub-prime crisis that triggered the GFC) and if you have too many of your institutions with too many bad debts then your country might default (see Greece). And if you have too many countries threatening to default then your whole economy is less reliable (see the Euro's drop in value and the on-going negotiations by rich countries with poor countries to avoid a disastrous effect to the Eurozone).

So it may very well be mostly money created by loans, but that is fine. So long as the interest payments or installments get paid everyone is pretty happy. This is why 'confidence' is seen as an important sign of economic health. The less confidence there is, the less money being given away on the basis it will be eventually paid back and therefore your whole economy slows. It's astonishing it all works so well, and it is all to do with the fact that everyday people want to be able to trade things easily and therefore having confidence in the value of the physical money means all that virtual money can be banked upon too.

Which is why when the corner shop wants to charge $5 for a cup of coffee or the cinema wants to charge $15 for a bucket of popcorn, I keep in mind that agreeing to that can be inflationary which undermines confidence in the value of money. So your gf can't call you a tight-arse.

 

[CountryRace]

I've seen this sort of stuff quoted a bit recently and I looked into it, but I think whoever is spreading this idea is being a bit nefarious in framing it in such a paranoid way. The whole world effectively runs on debt, as it's about the confidence in whether the new bonds will be paid off rather than whether the grand total of all debt can be paid if it is all called in immediately. And no-one really cares about that latter thing. Despite what the current Govt says a household budget is very different to a business budget which is quite different to a government budget.

Having said that, there is still some worth in using a household metaphor and so I will. I see it as being similar to offering someone a Credit Card. There is no reason to have a Credit Card if you have a constant stream of money through a reliable income. But if you know you are going to pay off the credit card without a problem at the end of the month, then you are hit with no extra interest and you have however many thousands of extra dollars. And if you can use those extra thousands to earn a bit more through buying stocks or whatever, maybe it makes sense to take on a Credit Card that will hit you with interest, but overall you are still well ahead due to the extra capital you're investing.

Given the world economy is based on the productive ability of billions of people there is a lot of reliable income coming down the tube and so inevitably you end up with the vast majority of money being numbers tapped into a computer. Debt seemingly created out of thin air. But it is only a problem when the debt can't be paid off. So if you miss your mortgage too many times, you lose your house, and if too many people lose their houses it infects the places who had those debts on their books (see the sub-prime crisis that triggered the GFC) and if you have too many of your institutions with too many bad debts then your country might default (see Greece). And if you have too many countries threatening to default then your whole economy is less reliable (see the Euro's drop in value and the on-going negotiations by rich countries with poor countries to avoid a disastrous effect to the Eurozone).

So it may very well be mostly money created by loans, but that is fine. So long as the interest payments or installments get paid everyone is pretty happy. This is why 'confidence' is seen as an important sign of economic health. The less confidence there is, the less money being given away on the basis it will be eventually paid back and therefore your whole economy slows. It's astonishing it all works so well, and it is all to do with the fact that everyday people want to be able to trade things easily and therefore having confidence in the value of the physical money means all that virtual money can be banked upon too.

Which is why when the corner shop wants to charge $5 for a cup of coffee or the cinema wants to charge $15 for a bucket of popcorn, I keep in mind that agreeing to that can be inflationary which undermines confidence in the value of money. So your gf can't call you a tight-arse.

On December 23 of this year, the Federal Reserve will be 99 years old. And throughout that 99 years, regardless of boom, bust, recession or Great Depression, the biggest Wall Street banks have been enjoying a 6 percent, risk-free return on the capital they hold at the Fed in the form of dividends.

Have you looked at your checking or money market bank statement lately from JPMorgan Chase or Citibank? How about the statement showing the interest you’re earning on your mortgage escrow account with the big banks? While the country suffers through the lingering effects of the Great Recession caused by the biggest Wall Street banks, the public typically receives less than 1 percent on their deposits at the big banks, while the government has legislated a permanent, risk-free 6 percent guarantee to the Wall Street banks for their capital on deposit at the Fed. Now that’s an entitlement program that needs to die!

This corporate welfare program gets even better: if the shares of stock were acquired prior to March 28, 1942, the 6 percent risk-free dividend is tax exempt and the bank doesn’t have to pay corporate taxes on it.


Wall Street on Parade article:
Kill This Entitlement Program: The 6% Risk-Free Dividend the Fed Has Been Paying Wall Street Banks For Almost a Century



Who are the lucky blokes ?

guaranteed 6% on your money ...

good gig if you can get it

 

[yibbida]

Jul 24 - govt borrows another $900m, making increase in debt since election $103.7billion

Jul 29 - Govt borrows another $500m. Not paid back until 2037 - http://aofm.gov.au/outright-tender/tender-793/#results

 

[RUNVS]

Jul 24 - govt borrows another $900m, making increase in debt since election $103.7billion

Jul 29 - Govt borrows another $500m. Not paid back until 2037 - http://aofm.gov.au/outright-tender/tender-793/#results

Funny how they are not talking about debt anymore. By any comparison they are way worse than Labor was.

 

[rodney hoo]

Funny how they are not talking about debt anymore. By any comparison they are way worse than Labor was.

I'm amazed it's not all over the front pages of the papers, debt cris does not seem to matter under the liberal/ national party.
No doubt now the worst leader and government ever by far.

 

[NSWCROW]

It's all the dsp muslim indigenous bludgers fault

 

[Ratts of Tobruk]

I'm amazed it's not all over the front pages of the papers, debt cris does not seem to matter under the liberal/ national party.
No doubt now the worst leader and government ever by far.

Now, now. There's still a chance that the Coalition have been working on something secret these last six years of inane (or were they distracted?) ramblings.

Given the departure of the car companies, I'm thinking Abbott has invented something like The Homer, but more in keeping with his mindset. Something for his 'roads of the 21st Century':

 

[NSWCROW]

roads of the 21st Century

That's a typo.
It was actually " Roads to bring sydney INTO the 21st century " *
































* denotes - conditional on 2015 nsw state election result.....

 

[Juddism]

The end of the carbon tax did nothing for power bills in Victoria, which have steadily and dramatically increased since abolition.

Regardless of your position on the merits of the tax, it's removal has done nothing for productivity and had no significant impact on cost.

first time I've ever received a $400 gas bill for 8 weeks, ever! That was 3 days ago. I received a letter from Red a few months back saying they were raising their rate at the start of whatever month it was.

 

[Maggie5]

first time I've ever received a $400 gas bill for 8 weeks, ever! That was 3 days ago. I received a letter from Red a few months back saying they were raising their rate at the start of whatever month it was.

Yep, me too Momentum, bills have been increasing and there was another increase in July. Fortunately I have mine locked in until December.
Not looking forward to the electricity bill with such a cold winter.

 

[CountryRace]

On December 23 of this year, the Federal Reserve will be 99 years old. And throughout that 99 years, regardless of boom, bust, recession or Great Depression, the biggest Wall Street banks have been enjoying a 6 percent, risk-free return on the capital they hold at the Fed in the form of dividends.

Have you looked at your checking or money market bank statement lately from JPMorgan Chase or Citibank? How about the statement showing the interest you’re earning on your mortgage escrow account with the big banks? While the country suffers through the lingering effects of the Great Recession caused by the biggest Wall Street banks, the public typically receives less than 1 percent on their deposits at the big banks, while the government has legislated a permanent, risk-free 6 percent guarantee to the Wall Street banks for their capital on deposit at the Fed. Now that’s an entitlement program that needs to die!

This corporate welfare program gets even better: if the shares of stock were acquired prior to March 28, 1942, the 6 percent risk-free dividend is tax exempt and the bank doesn’t have to pay corporate taxes on it.


Wall Street on Parade article:
Kill This Entitlement Program: The 6% Risk-Free Dividend the Fed Has Been Paying Wall Street Banks For Almost a Century



Who are the lucky blokes ?

guaranteed 6% on your money ...

good gig if you can get it

There are a lot of smart blokes on this discussion board

Can someone explain to me how one gets to buy into the federal reserves shareholder scheme? It sounds a ripper

 

[Play by Numbers]

Polling suggests huge support for Labors renewables plan.

This plus the current scandal around Direct Action on the back of Abbotts RET attack and vperceptions that coal is dying, with Tones as its last protector, are shaping as a huge election issue.

I think they have massively misread the carbon tax fallout, as their own actions, no fall in prices and a post boom era have quickly reshaped public opinion.

 

[Elroo]

Yep, me too Momentum, bills have been increasing and there was another increase in July. Fortunately I have mine locked in until December.
Not looking forward to the electricity bill with such a cold winter.

I am with Momentum for electricity. Signed up a year ago with a 2 year plan that freezes all prices for the entire 2 year contract.

 

[yibbida]

The Abbott-Truss government has lead us to the worst debt to GDP ratio since records have been kept.

 

[RUNVS]

The Abbott-Truss government has lead us to the worst debt to GDP ratio since records have been kept.

It has been almost 2 years since they got into power as well so they can't very well blame Labor for it.

 

[Power Raid]

It really is funny (and scary) how the posters who claim to be financial geniuses want government debt to be zero...

http://thekouk.com/blog/why-government-debt-must-grow-forever.html

What about simply wanting the budget under control and stop the reckless spending?

 

[Showbags]

What about simply wanting the budget under control and stop the reckless spending?

Why not instead grow the economy so whatever debt the government has is kept in check as a percentage of our GDP? We should be looking at growing our way out of our debt problems rather than cutting our way out. $300 billion debt is a lot less scary when it is only 10% of GDP than 100% of GDP.

 

[Lebbo73]

Why not instead grow the economy so whatever debt the government has is kept in check as a percentage of our GDP? We should be looking at growing our way out of our debt problems rather than cutting our way out. $300 billion debt is a lot less scary when it is only 10% of GDP than 100% of GDP.

It is a bit hard to do this when the world is in a Great Depression!

 

[Showbags]

It is a bit hard to do this when the world is in a Great Depression!

Not what your side of politics said during the height of the GFC, that was no excuse as to why the government had to go into deficit according to Joe Hockey. So why are you trying to use the same excuse now?

How is decreasing government spending going to help stimulate growth?

The biggest concern we face is private sector debt not public sector debt. Households and businesses are not investing or taking risks because they are saddled with such huge debt burdens. If the government tries to decrease the level of public debt (by decreasing government spending) this pressure will be thrown onto the private sector which is the last thing this country needs.

 

[Power Raid]

Why not instead grow the economy so whatever debt the government has is kept in check as a percentage of our GDP? We should be looking at growing our way out of our debt problems rather than cutting our way out. $300 billion debt is a lot less scary when it is only 10% of GDP than 100% of GDP.

I would love that.

Can you explain how we can treble the size of our economy?