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$950 - Opinions?


forrestgump

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G'day,

 

My opinion is that the $950 handout is stupid (no mincing words here!).

 

It seems that only about 20% of the previous handout was actually spent - the rest went into savings. Yes, even saving the money does have some beneficial impact but not as much as if the money had been spent.

 

Listening to various "vox-pops" (not a great source of info), it seems that many people intend to save this handout too.

 

I believe that it would be much more beneficial both long and short term to spend the money on infrastructure.

 

Sometimes, to better understand these things it is easier to look at the micro case.

 

I have done a rough head count and estimate that there are more than 100 taxpayers in my little street. Let's call it $100k in handouts. My street also has lots of potholes. Surely if, instead of handing out cash the Government spent that $100k on fixing our road it would be much more beneficial. I'm guessing, but I reckon at least half of that cost would be in labour. Therefore, by spending that $100k on fixing my road they would either create or save a whole job for the best part of a whole year. That person now stays as a contributing (spending) part of the economy, rather than having to draw on the public purse in the form of Unemployment Benefits etc.

 

But then I'm just a simple bloke.

 

 

 

Here's an interesting comment from Michael Knox of ABN Amro

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The Obama

stimulus package has a multiplier or bang for the

buck of around 1. This means that there is around

$1.00 of GDP added for each $1.00 of stimulus

spent. The Rudd stimulus package seems to have a

much lower multiplier of 0.3 in its first year and no

more than 0.6 in its second year. The multiplier is

much lower because the Rudd package chooses to

spend its money on social infrastructure rather than

economic infrastructure. In terms of economic

impact, the bang for the buck in the Rudd package

is so soft it must be rated as a dull thud. The object

of the stimulus package appears to be to simply

take the edge off the current recession until such

time as the cut in interest rates administered by the

RBA generates a recovery in private investment and

recovery in the Australian economy.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

 

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FG: Long Term? USELESS

 

Basically this is all about being "ACTION MAN"

 

Not too sure about the whole exercise, how many

years will it take to actually convert the major part

of the funds into action on the ground generating jobs.

 

Once again, IMHO, its fudging the issue which is:

 

Austrlalians carry an unmanageable debt level, and

$950 is pocket money only.

 

 

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Hi Forrest

 

In my experience, handouts just don't work, and they are, for the most part, a waste of money. I'm not sure how many people will be able to stay in their jobs because of a bit more spending ...... maybe a few at Harvey Normans et al.

 

Local infrastructure would obviously be useful, but I'm thinking that the government is trying desperately to have people keep their present jobs, not create new ones. I suspect that a bit of both is necessary.

 

One can't help but feel that the world economy is in much worse shape than politicians are willing to admit, otherwise, why the desperate and panic - stricken decisions regarding spending.

 

Very difficult times and it's a pity we have to rely on politicians to come up with the right decisions. They generally don't have a good track record.

 

Cheers

J

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hi flower, I like this in your last post..

 

"Australalians carry an unmanageable debt level, and $950 is pocket money only".

"Pocket money" what world do you live in??? Are you a politician??

 

This is pensioners income to live on for one month...again I say "Pocket money"

 

This is where the crux of the problem just happens to be.

 

NO VALUE FOR MONEY...this is the reason for unmanageable debt..

 

Bring out the credit card spend, spend and spend. Like no tomorrow.

 

Is it hard to work out, it seems most of the population think there is no credit limit.

 

In the end someone has to pay :lol:

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TA: Point taken, what I was meaning was that $950 is pocket money

in the big picture of personal debt.

 

One of the very serious problems that KRudd has totally ingnored is the

plight of pensioners and self funded retirees.

 

Given that he has managed to convert a massive suplus into a

debt in 12 short months, my mind goes back to the Khemlani affair, same

brand of politics, wonder if that will be the outcome of this?

 

To me it would have been far more equitable if a portion of the inherited

surplus was returned to pensioners and the retired who have got sweet

FA.

 

But I suppose we cant expect anything else from spin doctors, lets face

it those groups dont have much voting power.

 

So what we have is: Nobody gets punished for being greedy, and the

aged get no help.

 

Madness!!!!! Mind you I dont think he has a cat in hells chance of making

much beneficial effect with his package overall.

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In my work most of the consumers I come into contact with used the $1000 late last yr on street drugs grog or electrical gear!

 

Those with jobs will retire debt or spend it. A good outcome either way.

 

I think the balance of the full package is OK.

 

There is more still to come for the unemployed which is needed.

 

World wide most experts are encouraging governments to err on over stimulating..the government, in my view, does want to under deliver and fail the economy.

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UTB: We havent even thought of the ultimate worldwide downside to

all this printing of confetti. Google this: (our policy same as the US though tiny in comparison)

----------------------------------------------------------------------------------------------------------

 

6 Feb 2009 ... Marc Faber`s Latest Video Interview (CNBC 6 FEB) ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚· General Electric should be a Junk Bond ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚· Hyperinflation? Marc Faber on US Monetary Policy ...

marcfaberblog.blogspot.com/2009/02/hyperinflation.html - 16 hours ago - Similar pages

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the plight of pensioners and self funded retirees.

 

you mean removing taxes from super in pension mode isn't enough. i must live on a different planet.

 

the handout is a joke.

 

if we are handing back money then make it a tax rebate. after all it was earned by taxpayers and should be returned to them if the govt can't use to the nation's advantage.

 

simply spending money provides a very very short term kick and that's it. buying IPods and DS's and drugs and pokies isn't going to fix anything.

 

if there is money to urinate away then lets get stuck into long term infrastructure projects that will improve national productivity be it rail, port, education, energy efficiency etc. the money will filter through the economy and there will be a long term benefit that will help future generations. it's pretty obvious this should be the governments role but self interest and short-termism screws us all.

 

note: (part of this rant is directed at the first stupid handout and i haven't looked at the detail of the rest of the govts spending initiatives to see how long term the benefits of the rest of their plan will be).

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lets get stuck into long term infrastructure projects that will improve national productivity be it rail, port, education, energy efficiency etc. the money will filter through the economy and there will be a long term benefit that will help future generations.

 

If my feeble memory serves me at all, I think that significant infrastructure spending has been flagged. It will take some time though, and I'm guessing that they are trying to buy time with a temporary "fix".

 

Fancy being in the hands of politicians in a time of crisis. God help us.

 

Cheers

J

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nice to know, you have an opinion on this one wolv... :blush:

 

you are right in relation to tax breaks for self funded retirees, within their super funds.

 

We must take into account the retirees who for other reasons, like wife staying at

home to look after kids, hubby on low income completing his years of employment

on a small payout.

 

Continuing, maybe retrenched and lived on their savings prior to reaching retirement

age. Therefore, nil backup like being able to subsidise their pension with some other income.

 

Not all pensioners completed their working days with a windfall.

 

They were the backbone of the country and should be able to live in dignity.

 

If not on a pension, think of a couple of oldies on about $440 a week to eat and pay all

the bills. If they have no other income, how do they survive???

 

That's enough from me.. must be a softie :biggrin:

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