Is Julia gillard being targeted due to her gender?

[enwiabe]

I mean, it's hard to see any point you're making past all the ad homenum, buddy!

Why do you feel so strongly that the ALP would be better for Australia's future, anyway?

I'm not actually an ardent supporter of the Labor party. I'm of the belief that the economy would be managed fine by either party. I support Labor over the LNP because I support efforts to address climate change, big infrastructure problems and living in the 21st century.

Question back to you, if you know so little about the LNP why do you support them without qualification?

[Professor Polonsky]

I don't doubt that the Liberal Party can manage the economy just as well. But the economy is meaningless code-name for a whole bunch of indicators which are practically useless without knowledge of how people are doing. Economists would tell you that the economy has been doing great since Reagan came into power (up until the GFC). Inflation has been in check, unemployment fairly low, and GDP rising all the time.

But here is what's really been happening:


All the wealth has gone to the top, while everyone else has stayed rather stagnant. If you are not a member of the wealthy class, all the economic growth since 1979 has not helped you one bit.

And this is why our system is so flawed.

[alondouek]

I'm not actually an ardent supporter of the Labor party. I'm of the belief that the economy would be managed fine by either party. I support Labor over the LNP because I support efforts to address climate change, big infrastructure problems and living in the 21st century.

So, our contentions are pretty much similar, other than preferred party. I too want to see regulation of infrastructural sprawl and better civic planning, combating of current actions that damage the environment, and I have decries numerous times Abbott archaic views (the anti-vaccine position really, really gets me angry). The difference is, I do not want a Labor government because I see their spending as problematic.

Look, we can acknowledge that the basic positions of both parties have their flaws. The Liberals tend to neglect public requests (re: GST etc) in favour of building a strong economy and a strong dollar, while Labor tends to lapse into over-spending to appease the wants of the population. I do not believe that said spending based solely on popular want is justified or sustainable, hence my position in favour of the LNP.

if you know so little about the LNP

Given the above, that's not a fair statement to make. I am familiar with basic Liberal policy, just as I am with Labor. I won't profess myself to be an expert, so it's unfair to expect of me to know the LNP economic position inside-out.

[enwiabe]

I don't doubt that the Liberal Party can manage the economy just as well. But the economy is meaningless code-name for a whole bunch of indicators which are practically useless without knowledge of how people are doing. Economists would tell you that the economy has been doing great since Reagan came into power (up until the GFC). Inflation has been in check, unemployment fairly low, and GDP rising all the time.

But here is what's really been happening:
(Image removed from quote.)

All the wealth has gone to the top, while everyone else has stayed rather stagnant. If you are not a member of the wealthy class, all the economic growth since 1979 has not helped you one bit.

And this is why our system is so flawed.

This brings it to a debate on socialism vs. capitalism. If you'd like to have that debate, could you start a new thread for it?

[enwiabe]

So, our contentions are pretty much similar, other than preferred party. I too want to see regulation of infrastructural sprawl and better civic planning, combating of current actions that damage the environment, and I have decries numerous times Abbott archaic views (the anti-vaccine position really, really gets me angry). The difference is, I do not want a Labor government because I see their spending as problematic.

Look, we can acknowledge that the basic positions of both parties have their flaws. The Liberals tend to neglect public requests (re: GST etc) in favour of building a strong economy and a strong dollar, while Labor tends to lapse into over-spending to appease the wants of the population. I do not believe that said spending based solely on popular want is justified or sustainable, hence my position in favour of the LNP.

Given the above, that's not a fair statement to make. I am familiar with basic Liberal policy, just as I am with Labor. I won't profess myself to be an expert, so it's unfair to expect of me to know the LNP economic position inside-out.

I disagree with much of this. Please tell me how Labor's spending is problematic cf Liberal spending when economists the world over have evaluated the Gillard government's response to the gfc as among the best in the world?

Secondly, your point about labor tending to spend worse than liberal is wrong, as disproven by the IMF which we've already covered.

Third, if you acknowledge you are ignorant of the facts, don't be upset when someone brings you to task over fallacious statements you make based in this ignorance.

[Dayman]

Btw op are you telling me that mrs Julia Gilliard has not been targeted a single time? Not even a little bit come on this question is very complex thus you can't have  just yes or no answer you must give examples of both scenarios and you have define what being targeted means don't be lazy think.

[ninwa]

alondouek, pretty sure you've actually missed the point I was making. You should really reread those articles and see that a significant proportion of economists (I hesitate to say "majority" simply because no such wholesale survey of Australian economists has been undertaken) support the abandoning of the pursuit of a surplus.

The bits you quoted back at me don't actually prove anything about your point; in fact, some of them support mine - they are for the most part lamentations about the government's conduct, rather than the budget situation itself.

I really wish people would do more reading before they go on about how evil the government is for not obtaining a budget surplus.

Also, don't ignore the ABC News link just because they're not right wing

[slothpomba]

This brings it to a debate on socialism vs. capitalism. If you'd like to have that debate, could you start a new thread for it?

Doesn't necessarily need to be a dichotomy and i think you're missing the core characteristic of capitalism, private ownership of the means of production.

We don't need to do away with capitalism (the profit motive, private ownership of the means of production vs state or collective ownership, etc) to have a good system. We have minimum wage laws, work saftey laws, an 8 hour standard working day, workers compensation, social security and public healthcare, all of that didn't spring from capitalism in the time of Marx but we have it in our essentially capitalist system now.

I still think it's being missed by the people against spending that it's Keynesian economics and the spending that saved us from a recession, there's a fair bit of evidence (especially from the USA) that similar spending programs also helped soften the blow.

No sane person believes in a fully deregulated economy.

Cough...close enough http://ldp.org.au/policies/1146-deregulate-and-privatise

All this "ALP is against free market" bit reminded me of this

National Constitution of the ALP:

The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields.

Just like Labour's (UK) Clause IV, it'll probably have to go sometime. I find it nice though that they remember their roots, even if actually practicing it in today's economy would be suicidal (or, at best, a massive risk). Labor today, of course, is no less a supporter of the neoliberal free-market system than the Liberals, except one which helps the lower and middle classes more.

Whether Tony Abbott is a misogynist or not (and that depends on your definition of misogyny, and getting into definitional debates is stupid), his views on social issues are outdated and fit in much more 60 years ago than today. Gillard's speech was an attack on Abbott, but unlike those going the other way, it was substantiated with evidence and quotes.

Labor's economic management has been nothing short of amazing. If it wasn't for cheap politicking, that stupid surplus promise would never have happened and we'd be happy with a budget deficit. Like a budget deficit in the order of 0.15% of the GDP is going to have any substantial impact on our economy.

/thread. it's over, go home folks.

[Mao]

http://www.smh.com.au/opinion/political-news/hey-big-spender-howard-the-king-of-the-loose-purse-strings-20130110-2cj32.html

Quote from the IMF paper on their methods (p13-14), http://www.imf.org/external/pubs/ft/wp/2013/wp1305.pdf

Despite its many strengths, Bohn’s (1998) approach also has limitations. First, configurations
of the debt ratio and ρ may emerge in which the primary fiscal surplus implied by the
estimated fiscal policy reaction function is too high to be politically feasible or realistic. In
the empirical applications, this limitation becomes relevant, as we show below. Second, the
test was conceived against the background of a generally rising debt ratio. However, many
countries experienced declining debt ratios for several decades: we would argue that, in that
context, failure to obtain a positive and significant Bohn coefficient (which would require a
worsening primary deficit) would indeed indicate an inconsistency with the intertemporal
budget constraint but should be labeled as over-accumulation of assets rather than lack of
fiscal prudence.

Now, I'm not an economics major, but that seems to suggest the answers aren't so clear-cut when the debt is decreasing (which is the case in the Howard years). I wouldn't be so hasty to believe what the SMH calls as Howard's "loose purse years", as these asset accumulations are even mentioned in SMH:

In its final year in office, the Coalition boosted the AusLink national roads program by $2.3 billion and announced grants for water conservation and water buybacks worth $10 billion over 10 years.

Can we perhaps get a bit more insight on this treatment used in the IMF report? (TT?)

[Mao]

Labor's economic management has been nothing short of amazing. If it wasn't for cheap politicking, that stupid surplus promise would never have happened and we'd be happy with a budget deficit. Like a budget deficit in the order of 0.15% of the GDP is going to have any substantial impact on our economy.

Budget surplus and deficit aside, can we please have a look at the actual debt figures.
http://www.tradingeconomics.com/australia/government-debt-to-gdp

Since 2008, our debt increased by about 13% GDP (0.15% GDP per year over 6 years is slightly under 1%GDP). If this continues, we can hit the Keating numbers of ~30% within 5 years, which is when we were in trouble last, and that took Howard 10 years to correct. The figure of 30%GDP is still far below what other economics are currently supporting (US, UK, Eurozone). Do we know for sure that we can actually support a figure as high as these other economies are?

What I'm driving at here is that the debt-to-GDP ratio supportable by a government varies from country to country, since tax revenues of the governments are so different. Debt-to-revenue data is not so easy to come by, especially since tax cuts comes and goes year-to-year.

I don't buy any of these "Australian economy is one of the strongest economies" stories. The last thing I want is for the next government to rack up even more debt.

[Mao]

But here is what's really been happening:
(Image removed from quote.)

All the wealth has gone to the top, while everyone else has stayed rather stagnant. If you are not a member of the wealthy class, all the economic growth since 1979 has not helped you one bit.

The source for your picture, the "Congressional Budget Office" on http://www.cbpp.org, is an US organisation. Several sources cite this as the income distribution of US, How is this relevant to what we are discussing here?

[ninwa]

I don't buy any of these "Australian economy is one of the strongest economies" stories. The last thing I want is for the next government to rack up even more debt.

Well, given that you quoted the IMF before I assume you consider them a reliable source.

http://www.imf.org/external/pubs/cat/longres.aspx?sk=40112.0
http://www.imf.org/external/np/sec/pn/2012/pn12127.htm

The Australian economy has been growing faster than most advanced countries, benefiting from its trade linkages with Asia, particularly China.

You can also check out their World Economic Outlook, but that really only talks about Australia in the context of the Asia-Pacific (which is also doing well economically).

[Professor Polonsky]

Budget surplus and deficit aside, can we please have a look at the actual debt figures.
http://www.tradingeconomics.com/australia/government-debt-to-gdp

Since 2008, our debt increased by about 13% GDP (0.15% GDP per year over 6 years is slightly under 1%GDP).

Oops, that was supposed to be 1.5%. My bad. I was referring to the updated 2012-13 financial year figures, which I actually can't find now. But anyway, the deficit for 2012-13 is something like $2 billion, which is less than 2% of the GDP.

If this continues, we can hit the Keating numbers of ~30% within 5 years, which is when we were in trouble last, and that took Howard 10 years to correct.

But it won't continue.



This is occuring as expenditures go down relative to GDP, and revenues are going up.



Also, having a long-term debt really isn't such an issue, as long as it remains stable... All other AAA economies out there have a stable long-term debt.

The figure of 30%GDP is still far below what other economics are currently supporting (US, UK, Eurozone). Do we know for sure that we can actually support a figure as high as these other economies are?

Yes

What I'm driving at here is that the debt-to-GDP ratio supportable by a government varies from country to country, since tax revenues of the governments are so different. Debt-to-revenue data is not so easy to come by, especially since tax cuts comes and goes year-to-year.

But by measuring the debt, you've already taken account for revenues. Also, Australia has plenty of room to tax more if desperately needed:

Which is something we definitely could do in the next boom part of the economic cycle. We've generally kept revenues confined to 25% of the GDP since just about forever, but we could take more.

I don't buy any of these "Australian economy is one of the strongest economies" stories. The last thing I want is for the next government to rack up even more debt.

It is the strongest in the world, if you ask many economists. Nothing short of that. And unless the next government completely violates budgetary and financial principles and rack up more debt in a time of growth than Labor did during the downturn (which was a good thing), there's no reason why that should happen.

The source for your picture, the "Congressional Budget Office" on http://www.cbpp.org, is an US organisation. Several sources cite this as the income distribution of US, How is this relevant to what we are discussing here?

Actually, the CBPP is a (generally left-wing) American research and policy institute (think tank). They cited CBO numbers, which are official. It was a general comment on why a supposedly strong management of 'the economy' is not necessarily good, as per the US' (and I'm inclined to believe you'd find similar figures in all other countries).

[Professor Polonsky]

Announcement:
Moody's says outlook for Australia's Aaa rating remains stable
Global Credit Research - 12 Jun 2012

New York, June 12, 2012 -- Moody's Investors Service says that the outlook for Australia's Aaa foreign and local currency ratings remains stable.

Australia's Aaa ratings are based on four factors: the country's very high economic strength; very high institutional strength; very high government financial strength, and very low susceptibility to event risk.

The conclusions were contained in Moody's annual Credit Analysis of the Government of Australia.

Economic strength is classified in Moody's rating methodology as very high, based on the country's economic diversity, the performance of the economy during the past two decades, relatively good growth prospects and high per capita income. During the global financial crisis and recession, Australia, while recording one quarter of negative GDP growth in the last quarter of 2008, did not have a recession, as did almost all other Aaa-rated countries.

The outlook is for some acceleration in the rate of economic growth, supported by the mining sector. In the next few years, investment in the mining sector (including LNG, iron ore, and coal) should remain strong, while private consumption continues to grow at about 3% annually, supported by a relatively strong labor market.

Thus, over the medium term, real GDP should return to near its level of the two decades before the financial crisis, in the 3.0-3.5% range. The risks to this scenario are primarily from external factors — global and East Asian growth and financial market developments (Europe or elsewhere) -- that could affect Australia because of its dependence on external finance.

Moody's assesses Australia's institutional strength as very high, a classification shared by all Aaa-rated countries, and reflecting overall governance, rule of law, effective monetary and regulatory institutions, and transparency. And, in Australia's case, these features are reinforced by a strong commitment on the part of the major political parties to sound government finance and low public debt levels, an important feature for a highly rated government

In its classification of government financial strength as very high, Moody's notes that even at its peak, Commonwealth government and general government debt (including state and local governments) remains low by global standards, and the 2012-2013 budget forecasts a renewed downward trend in debt. As a result, the Commonwealth will continue to have one of the strongest financial positions among Aaa-rated governments.

The report also notes that as an advanced, diversified economy with strong, stable political institutions, Australia has very low susceptibility to event risk. Commodity-price and exchange-rate volatility affects the economy, but the most important risk remains the economy's reliance on external capital inflows to finance the country's high level of investment, lately dominated by the resource sector, but including residential construction. As a result of the high investment level, the country has consistently run current account deficits and built up one of the largest negative net international investment positions among advanced economies. Australia contrasts with some other current-account deficit countries in that it also has a relatively high saving rate, but the level of investment is even higher.

[Mao]

But it won't continue.
(Image removed from quote.)
(Image removed from quote.)

You'll have to excuse me for not believing ALP's budget predictions. I wouldn't care to cite the number of times they have promised a surplus and did not deliver.

But by measuring the debt, you've already taken account for revenues. Also, Australia has plenty of room to tax more if desperately needed:
(Image removed from quote.)
Which is something we definitely could do in the next boom part of the economic cycle. We've generally kept revenues confined to 25% of the GDP since just about forever, but we could take more.

Debt-per-GDP is different to Debt-per-revenue. GDP is the production of the entire nation, revenue is what the country receives in taxes. Debt-per-GDP is like comparing a personal debt against the income of your extended family.

And also, are you kidding me? More taxes? 25% of GDP is not high enough? Call me greedy, but if I create wealth using my own hands, taking a quarter of it away without choice is barely acceptable, let alone even higher.

Also, having a long-term debt really isn't such an issue, as long as it remains stable... All other AAA economies out there have a stable long-term debt.

I struggle to understand why you think having a debt is not an issue. Right now, we are continuously trading debt between different debtors as a way to continuously extend the loan (hence, the debt level is 'stable'). This is of course, assuming that there will always be debtors happy to lend, and that we don't really have any intentions to pay off the debt. It is exactly like paying a credit card off with another credit card.

The very scenario I'm afraid of is currently playing out in the EU. EU has been in crisis mode since '08, and as certain countries' debt spiralled out of control, the EU reserves are starting to run dry. When the EU can no longer give out more loans and bail-outs (which can happen very soon with the situation in Spain), there will be a chain of defaults and write-downs that will have terrible impact on their local economies and the global economy. The situation in EU seems almost inevitable, and given the monthly crisis we hear about the US, Japan and EU, holding debt right now is seriously risky, even if the debt level is stable. The way to shield against these chain-effect defaults is to minimize our debt. You may be a bit more optimistic about the global economy, but shoot me for wanting our economy to be as independent as possible.

So, to summarise my point. No. It's not okay to have debt, even if it is stable. And more taxes is not the answer.