What is the real state of the economy?

[Max zero]

The classic development-studies conundrum - halting exploitation in many cases is a worse outcome due to some employment being better than nothing for many people.

The cocoa trade in Ghana is an example - kids work 3-4 hours per day on family cocoa farms, yet this income enables the families to send their kids to school (where they often still complete 1-2 hours of agricultural work per day as many schools provide a basic meal as well). Child labour is often welcomed by the children themselves who feel a sense of pride in contributing to the family business, yet makes tracking illegal child labour much more difficult and leads to selling/exploitation of children is some circumstances (far more prevalent in the Ivory Coast).

Similar situation with Foxcon workers in China.

People need to remember we in the West went through the exact same thing. People might ask "well why can't they learn from our mistakes have fair progression." I would argue they are. Their economic transition is far more organized and stable then ours was.

 

[Max zero]

Yes, our rubbish tips & oceans are full of cheap Chinese made crap. All to satisfy shopaholics & make us 'feel' rich. We waste so much of this stuff. We have killed our own manufacturing industries & certainly adversely affected our environment.

Our current economic behavior is unsustainable in the longer term. We are granting future generations a disaster that they will struggle to handle.

Quality of life & standard of living are two different concepts. Granted they are not necessarily mutually exclusive, but our ignorance has upset the balance.

And yet this process has lifted millions of Chinese and Indians out of poverty.

 

[Lebbo73]

If I believe this, then I also believe in the Easter Bunny.

With 90% of the stuff you believe, this wouldn't surprise us. At least the Easter Bunny is more likely to be true!

 

[Maggie5]

With 90% of the stuff you believe, this wouldn't surprise us. At least the Easter Bunny is more likely to be true!

At least I have a mind of my own and don't follow others blindly like someone else I know.

 

[Lebbo73]

At least I have a mind of my own and don't follow others blindly like someone else I know.

Please don't kid yourself. The evidence says otherwise.

 

[Maggie5]

Please don't kid yourself. The evidence says otherwise.

LOL. I have pretty lucky to have parents that encouraged the children to be free thinkers. Free to choose our own religion and political party. Dinner was very interesting as they always challenged our views, made for lively discussions.
Judging from your numerous post doubt that you have ever taken your blinkers off.

 

[Lebbo73]

LOL. I have pretty lucky to have parents that encouraged the children to be free thinkers. Free to choose our own religion and political party. Dinner was very interesting as they always challenged our views, made for lively discussions.
Judging from your numerous post doubt that you have ever taken your blinkers off.

If only you sat around the table whenever my family gets together. It is on for young and old. I should record it and put it on BigFooty.

 

[CM86]

If only you sat around the table whenever my family gets together. It is on for young and old. I should record it and put it on BigFooty.

 

[Maggie5]

Thought that this was an interesting article:
http://theaimn.com/good-news-kids-the-inheritance-is-safe-and-so-are-we/

Borrow pot loads and invest it in the Future Fund. You remember the Future Fund, Australia’s Sovereign Wealth Fund, established for the benefit of future generations of Australians? You may not because it isn’t counted in the budget bottom line.

Well, as at the 31st of December 2014, it was $109.21 billion in the black. We also have $3.77 billion in the Education Investment Fund, $3.71 billion in the Building Australia Fund, $1.95 billion in the Health and Hospitals Fund and $830 million in the DisabilityCare Australia Fund.

Its investment returns for the 2013-14 financial year yielded $12 billion ($48.7bn since its inception in May 2006 on accumulated contributions of $60.5 billion invested). The 2014-15 budget shows $13.2 billion interest will be paid to service CGS liabilities for the year to June 2014, so we came out roughly square (give or take a billion) so you can stop worrying about our billion a month in interest payments.

Despite the global financial crisis in 2008, the fund has enjoyed an average nominal annual growth rate of 7.2 per cent.

The Australia Government Bond 10Y rate is currently about 2.57 per cent. That means we could borrow money (issue bonds) and reinvest it making a net gain of almost 5%.

 

[Power Raid]

How many years will it take to pay this debt off now? Two decades?

The youth have been royally Fd over. It will be interesting watching generation debt grow up with significantly less wealth and opportunity to those above and below.

 

[Run n Spread]

How many years will it take to pay this debt off now? Two decades?

The youth have been royally Fd over. It will be interesting watching generation debt grow up with significantly less wealth and opportunity to those above and below.

Try never at this rate. The debt problem is caused mostly by a fall in mining and lack of other industry to generate enough profit for a tax base. It is a revenue problem not some wild out of control spending (although granted there is waste from both sides).

Penny pinching round the sides is useless and unsustainable. It is like telling someone on the dole things will be better if they cut out coffee and cigarettes. Ahh no what they need is money and stable employment. A bit like the country.

Most of the waste comes in welfare (middle class welfare) which has now become so entrenched people think it is an entitlement rather than an concessional freebie.

Unless the structure, strategy and operations of governments change it really won't matter who is in charge.

And to a point we are tied in with the rest of the world which is sinking rapidly. With the natural advantages we have we really need to be more isolationist in terms of policy. Sh*( even the USA under Obama of late are trying this and are the ones now actually been pulled into sh&* al la Saudi Arabia.

 

[Gough]

All this talk about intergenerational debt is absolutely unadulterated bullshit while the government continues to ignore climate change anyway.

 

[mellowyellow]

Hope theres a large war chest for our invasion of Iraq

Sent from my HTC_PN071 using Tapatalk 2

 

[Power Raid]

Try never at this rate. The debt problem is caused mostly by a fall in mining and lack of other industry to generate enough profit for a tax base. It is a revenue problem not some wild out of control spending (although granted there is waste from both sides).

Penny pinching round the sides is useless and unsustainable. It is like telling someone on the dole things will be better if they cut out coffee and cigarettes. Ahh no what they need is money and stable employment. A bit like the country.

Most of the waste comes in welfare (middle class welfare) which has now become so entrenched people think it is an entitlement rather than an concessional freebie.

Unless the structure, strategy and operations of governments change it really won't matter who is in charge.

And to a point we are tied in with the rest of the world which is sinking rapidly. With the natural advantages we have we really need to be more isolationist in terms of policy. Sh*( even the USA under Obama of late are trying this and are the ones now actually been pulled into sh&* al la Saudi Arabia.

I hear where you are coming from but a couple of points:

1) the drop in tax as per a % of GDP is almost wholly explained by a drop in CGT collection
2) in $ terms our tax collection is fine. We should be budgeting on a 22% of GDP rate and not the windfall tax takes of boom times.
3) the federal government needs to budget better and exit spending on items that the state is responsible for

this is simply a symptom and cost of federal governments not respecting our constitution.

 

[Max zero]

Try never at this rate. The debt problem is caused mostly by a fall in mining and lack of other industry to generate enough profit for a tax base. It is a revenue problem not some wild out of control spending (although granted there is waste from both sides).

Penny pinching round the sides is useless and unsustainable. It is like telling someone on the dole things will be better if they cut out coffee and cigarettes. Ahh no what they need is money and stable employment. A bit like the country.

Most of the waste comes in welfare (middle class welfare) which has now become so entrenched people think it is an entitlement rather than an concessional freebie.

Unless the structure, strategy and operations of governments change it really won't matter who is in charge.

And to a point we are tied in with the rest of the world which is sinking rapidly. With the natural advantages we have we really need to be more isolationist in terms of policy. Sh*( even the USA under Obama of late are trying this and are the ones now actually been pulled into sh&* al la Saudi Arabia.

Actually it is a spending issue. Yes revenue has fallen so shouldn't the government react accordingly?

When times were tough the government spent more, when times were great the government spent even more still. Didn't everyone say we had the best economy in the world?

How do we come through the biggest boom in a generation with more debt? If we can't save money now when can we? There always seems to be some excuse as to why saving has to be put off on to another day.

And people wonder why we don't have a sovereign wealth fund?

 

[Power Raid]

Actually it is a spending issue. Yes revenue has fallen so shouldn't the government react accordingly?

When times were tough the government spent more, when times were great the government spent even more still. Didn't everyone say we had the best economy in the world?

How do we come through the biggest boom in a generation with more debt? If we can't save money now when can we? There always seems to be some excuse as to why saving has to be put off on to another day.

And people wonder why we don't have a sovereign wealth fund?

we did....$120b plus another $10b in an education fund

but we bought some pink bats, tv set boxes and a cash give away, locked in expenditure on a carbon tax relief scheme to industry and homes and then spent our mining tax before it collected a cent.

other than that and spending $360b more than we have earned in 8 years means we are only $230b in debt.

 

[Run n Spread]

Actually it is a spending issue. Yes revenue has fallen so shouldn't the government react accordingly?

When times were tough the government spent more, when times were great the government spent even more still. Didn't everyone say we had the best economy in the world?

How do we come through the biggest boom in a generation with more debt? If we can't save money now when can we? There always seems to be some excuse as to why saving has to be put off on to another day.

And people wonder why we don't have a sovereign wealth fund?

Yes. Yes. And I have got no idea. Maybe it's a bit like if a gambler has a hot streak and just assumes the good times will roll on. Also any surpluses during that time were pre committed to spending down the track so not really a surplus.

 

[TheMase]

we did....$120b plus another $10b in an education fund

but we bought some pink bats, tv set boxes and a cash give away, locked in expenditure on a carbon tax relief scheme to industry and homes and then spent our mining tax before it collected a cent.

other than that and spending $360b more than we have earned in 8 years means we are only $230b in debt.

We did? Don't you mean we do?

http://www.futurefund.gov.au

109.21 billion with another 10 billion across other funds.....

And has been performing well...

 

[Patrick Bullet]

How many years will it take to pay this debt off now? Two decades?

The youth have been royally Fd over. It will be interesting watching generation debt grow up with significantly less wealth and opportunity to those above and below.

I struggle to see the problem. Most homebuyers happily take on mortgage debt which is expected to take 30 years to pay off (more than 2 decades). The size of these new mortgages, as a proportion of household income, is way higher than the proportion of government debt relative to GDP. Further still, these homebuyers have to pay a significantly higher interest than the government on their debt. Yet, you think it's the government's debt that will screw things up for the next generation?
You're going to have to walk me through your logic!

 

[Lebbo73]

I struggle to see the problem. Most homebuyers happily take on mortgage debt which is expected to take 30 years to pay off (more than 2 decades). The size of these new mortgages, as a proportion of household income, is way higher than the proportion of government debt relative to GDP. Further still, these homebuyers have to pay a significantly higher interest than the government on their debt. Yet, you think it's the government's debt that will screw things up for the next generation?
You're going to have to walk me through your logic!

The difference is that most of the debt was accumulated during a boom and was wasted on unproductive spending.

 

[AM]

 

[madmug]

And yet this process has lifted millions of Chinese and Indians out of poverty.

I've been to China & they are literally choking to death on their economic miracle.

Its been said that for the worlds population to live in a comfortable western style middle class we will need the resources of 9 Earths. Again all this 'development' is simply unsustainable. We need to change how we measure our economic growth. We need to account for the environmental damage we are causing. We need to value quality of life more than the value of the rubbish we buy & waste, & often dont need.

Simple really

 

[Power Raid]

We did? Don't you mean we do?

http://www.futurefund.gov.au

109.21 billion with another 10 billion across other funds.....

And has been performing well...

no

the future fund was set up to start to cover other debts we already incurred

 

[Power Raid]

I struggle to see the problem. Most homebuyers happily take on mortgage debt which is expected to take 30 years to pay off (more than 2 decades). The size of these new mortgages, as a proportion of household income, is way higher than the proportion of government debt relative to GDP. Further still, these homebuyers have to pay a significantly higher interest than the government on their debt. Yet, you think it's the government's debt that will screw things up for the next generation?
You're going to have to walk me through your logic!

being 35 you may have missed the '87 to '92 period.

 

[Patrick Bullet]

being 35 you may have missed the '87 to '92 period.

Cool explanation. Can you elaborate?