moll.
Learn to science.
- Joined
- Aug 19, 2008
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- 2008
Alright, prepare for an essay.What you would have done to, more or less, save Australia from recession during the GFC? I'm not asking this in a 10 year old tone of "THEN U DO BETTA" either. Just saw the degree you are doing in your sig and figured you'd have a more enlightened view than I do.
Firstly, there seems to be this negetive stigma about recessions that everyone has. It's like a recession is now equated to an apocalypse in the media these days. But recessions are good for the economy. It only takes an average business to easily survive during a boom, but it takes a good one to survive a bust and an absolutely excellent one to grow during the recession. Simply put, an ocassional recessions help to clear out all the garbage in the economy.
But putting that aside and accepting the populist Keynesian outlook, Rudd's 50 billion total in stimulus was poorly thought out. The first 10 billion was understandably panicked, and because it wasn't overly large, it can be forgiven.
The second round, however, was an utter fiasco. For starters there was only a four month period between the two stimulus plans. This is nowhere near the time needed to collect, collate and interpret the economic data for the GFC fallout and the effects of the first stimulus.
Secondly, the cash payments were a terrible idea. Spending 20 billion of taxpayers money to keep the retail and consumer industries afloat for a single quarter is just a waste of money. A better idea would have been to make monthly payments of a much smaller amount (say $150) at irregular intervals to random recipients. This could have been continued indefinately, increased if the recession worsened or halted if it was obvious that we were recovering.
An even better idea would have been to just lower corporate taxes for a year through offering tax rebates when they file their returns. Terrible businesses would have still gone bankrupt, but it would have saved those marginal performers.
The other 20 billion was also wasted. I can understand the attraction of building school halls; there is at least one school in every town of over 500 people, which means construction, engineering and planning industries across the country would benefit, as opposed to the stimulus being concentrated in the capitals. But upgrading schools should be the last thing on their list of priorities.
Instead, they should have spent the money on renovating and upgarding hospitals, building high-speed rail networks between the cities and regional centres, and building nuclear, solar and wind power stations; all of which would have helped out regional as well as city Australia, although probably in less places than did the school halls. Now, some of these options would require a good deal of planning before implementation, which is probably why they didn't do it. It was quicker and easier to just throw money at the schools, rather than plan appropriately.
As for the insulation scheme, it was a good idea in theory, but it too was rushed out, without proper regulation. It should have been modelled along the lines of the solar panel rebates, with similar regulation of the industry.
End.