Sunday, February 15, 2009

$42 billion stimulus, Climate Change and Last Post ...

For reasons touched on in my previous post, I have decided to end this blog.

In doing so permit me to outline some concerns about the present political and economic issue of the day, the one costing $42 billion, in addition to the prevailing issue of the time, the “great moral challenge of our generation.”

The $42 billion Stimulus Package

As we digested the news surrounding the Rudd government’s latest fiscal efforts to pump prime our ailing economy, offset slackening demand and the effects of a world recession we are left to wonder, has the Government all but exhausted its ammunition in heading of a recession? Fiscally speaking one would think the $42 billion dollar assistance package would represent end game.

For all the rhetoric and analysis there remains the central question, how much can Western governments actually do to compensate for what appears to be a massive fall in business confidence, investment, and private consumption. The handouts component of the package will achieve one outcome at best, that off starving of a technical recession in the first half of 2009. Politically, it represents short-term brilliance, but in economic terms its damned expensive and completely unsustainable.

The infrastructure spending is perhaps the most intelligent element of the package but even this has limitations. For example, how does Government marry present urgency with the long lead-time associated with project fruition? Its effects will have little bearing on 2009’s economic data.

Thus, we return to post WWII styled economics that saw Western Governments launch the modern welfare state coupled with waves of deficit spending, namely, the kind of Social Democratic suppositions promoted by Rudd of late. Do not be surprised to discover that we are sowing the seeds for the next crises. My worry is that the remedies that may have worked in the past, the state intervention, may have unintentional and unpredictable longer-term effects unless they are confined to the present crises. Kevin Rudd’s latest ideological stirrings intimate that this shall not be the case.

In the end, it occurred to me that government spending only accounts for a small proportion of total economic output (25 percent at most) so no amount of public funding can compensate for the crises if the other 75 percent or so remains depressed. ALL indicators suggest that it will.

For presentation, speech dynamics, dramatics and general politicking, Kevin Rudd scores 9.99 out of 10 and a, 4.5 at best for economic responsibility. The stimulus-package debate has revealed the policy vacuum, the emptiness that is at the heart of the Rudd Labor Government.

In related commentary, please don’t suggest that Newsweek, got it right about America and hence, Australia too.

A decade ago U.S. government spending was 34.3 percent of GDP, compared with 48.2 percent in the euro zone—a roughly 14-point gap, according to the Organization for Economic Cooperation and Development. In 2010 U.S. spending is expected to be 39.9 percent of GDP, compared with 47.1 percent in the euro zone—a gap of less than 8 points. As entitlement spending rises over the next decade, we will become even more French...

Now comes the reckoning. The answer may indeed be more government. In the short run, since neither consumers nor business is likely to do it, the government will have to stimulate the economy. And in the long run, an aging population and global warming and higher energy costs will demand more government taxing and spending. The catch is that more government intrusion in the economy will almost surely limit growth (as it has in Europe, where a big welfare state has caused chronic high unemployment). Growth has always been America's birthright and saving
grace."
Climate Change nonsense

As revealed when one clicks on the “Climate Change” label of this blog, I have devoted a fair amount of online space to the question of Climate Change in the face of The Rudd Governments proposals to tax us over CO2 emissions. In ending this blog, permit me to add a further string to the impeding debacle that is, Anthropogenic Global Warming. The theories back of this nonsense have been turned into political ideology. It is no longer an environmental movement, rather a political activist movement that has become enormously influential at a global level, the great Liberal (term used in the America context) temptation of our time.

Environmental extremism can be traced back to the fall of the Berlin Wall and world communism as peaceniks, socialists and their sympathizers moved into the environmental movement bringing with them their neo-Marxism. Over the years, their green prose was utilized in such as way as to have more to do with anti-capitalism and anti-globalization than with the science of climate change. Post communism, the left was in a state of disorder so the attachment to the environment and following on, global warming should come as no surprise.

It is now common in the media to lay the blame for every major storm, hurricane, and wildfire on global warming. Hence, letters to The Age following Victoria’s recent bushfires:
I see pictures of the rows of tents in Whittlesea and wonder, are we looking at our first climate change refugees?
And this
This is what climate change looks like and it is terrifying, I plead with our state and federal governments to treat it like the emergency that it is, so these horrifying deaths, injuries and destroyed homes don’t become the norm.
So much for the information age; politics, and public debate in our newspapers are becoming emotionally driven and a bastion of ignorance, if part fuelled by the media itself. Some are even contending that Rudd will be to blame for any future bushfires because his carbon reduction targets are not high enough …

The world is changing in ways that should make present conservatives grimace and those past turn in their graves …

In recognizing, the role that it plays in the larger ecosystem of information, at this stage this blog shall, not be deleted ….

To those that arrive here through some Google or related search or by sheer accident, I cordially invite you to explore the many posts using the labels for navigation.

Otto
Federal electorate: Scullin

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