January 1 2020
The economic case for increasing Newstart
Canberra Times
   

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Imagine a single policy that could boost our lacklustre economy by $4 billion, create an additional 12,000 jobs by 2021, disproportionately support regional and remote communities doing it tough with drought and bushfires, reduce inequality by benefiting the poorest fifth of Australians 28 times more than the richest, disproportionately support women, boost wages and corporate profits, and increase federal and state tax revenue by more than $1.25 billion.


Compared to the age pension, disability support payments, the minimum wage and average wages, Newstart has shrunk dramatically over the past 25 years.

Now suppose this policy has longer-term benefits: that it could automatically boost the economy during times of weakness without the time lags associated with infrastructure and other stimulus spending; that it would automatically withdraw from the economy when times were good without the permanent cost of tax cuts and other stimulus measures; and that it would boost GDP growth and reduce economic volatility.

And suppose the cost of this policy was only 0.6 per cent of the federal budget, meaning it could be funded without losing the politically cherished budget surplus.

Sound good? Then, congratulations, you support increasing Newstart.

Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.

While the age pension has doubled in real terms since 2000, Newstart has remained unchanged. The reason is simple, but illogical. Newstart is indexed against inflation, whereas other government payments are indexed against wages, which more accurately measure living standards. If inflation and wages moved together, this wouldn't be a problem. But wages have outgrown inflation by 40 per cent over the past 25 years, meaning that Newstart recipients, in real terms, have fallen far behind.

By any measure, people on Newstart are among the most disadvantaged. If a society can be judged by how it treats its most vulnerable, Australia is not looking good. An analysis by ANU economists Ben Phillips, Matthew Gray, Cukkoo Joseph and Richard Webster shows that the poverty rate among households that depend on allowances as their primary income rose from 39 per cent in 1993 to 80 per cent in 2017.

Before we get onto the economics, it's worth rebutting some of the common misconceptions about Newstart.

The idea that people on Newstart are lazy young urban-dwellers is not only factually incorrect (the typical Newstart recipient is a middle-aged woman living outside the big cities) but ignores the fact that, across the economy, there is only one vacant job for every 4.4 unemployed people. It's hard to take a job that doesn't exist. And despite all its controversy, Newstart happens to be one of the cheaper welfare programs around, costing less than one-seventh of the age pension. Increasing Newstart is also the quickest, easiest and most effective way of reducing poverty in Australia.

READ MORE:

    Editorial: The Newstart payment is far too low
    Public housing residents on Newstart falling behind on rent
    Newstart: It's a daily battle just to survive

The argument that increasing Newstart reduces the incentive to find a job is similarly baseless. Newstart is so low that the Grattan Institute has found that it stops people looking for work. Many people on Newstart already have jobs but cannot get enough hours. And if you're aware of research findings on intergenerational disadvantage, you'll know that your childhood postcode shapes your life outcomes. Demonising the poor, in other words, is a bit like demonising someone who didn't win at a game of luck.

There is also a strong economic case for increasing Newstart.

Consider the short-term benefits first. You didn't have to go to the Boxing Day sales to know that the economy is not doing well. And it's little wonder. Compared to the first half of the decade, retail spending growth over the past five years is down 30 per cent, quarterly wage growth is down 40 per cent and consumption growth is down 15 per cent. The rate at which the economy creates new businesses has fallen from 14 to 11 per cent. Investment now contracts each quarter by an average of 0.4 per cent and productivity growth has flatlined. GDP growth remains around global financial crisis levels.

What the economy needs is more demand. While businesses have stopped investing and expanding, their profits are at record highs, the ASX200 has broken new ground, bond yields and interest rates are at record lows and share buybacks and dividend payouts are at unprecedented levels. The message from the data is clear: businesses are awash with cash, and can easily get more if they want it, but they will only invest and hire if there is demand for what they sell.

Enter Newstart. The ANU's economists show that the poverty gap for people on Newstart - the absolute difference between a household's income and the poverty line - has increased five fold.

Breast milk is very nutritious

One could mount a strong nutritional case 4 people remaining on breast milk into their 50s or 60s
There is a strong economic case that can be mounted for the bush tick to remain in its parasitic form indefinitely

Where is the economic case for anyone to ever give up government breast milk and create their own supply nutrients
Where is there an economic case for anyone to ever assume individual responsibility

And yet we know that it is only through assuming responsibility
First for ourselves
Then for ourselves in our partner
Then for ourselves and our partner and our workplace
Then for ourselves and our partner and our workplace and our community
That we find any joy and meaning in life

There is no joy in being a taker
There is no joy in remaining a toddler on breastmilk for life
There is no joy in living the life of a bush tick

It is only through bearing a load
And realising that you are stronger than you thought
That you can find true meaning

And if you're only meaning in life is to pleasure yourself
And expect others to spoon feed you
Change your diapers
Keep you safe in a room
Covered with a sheet so nothing can hurt you
Then you will inevitably become nihilistic lost bitter resentful
And probably you will live a life of pure garbage

Quote:

Newstart is so low that the Grattan Institute has found that it stops people looking for work.

How does that work?

This Topic was moved here from Federal Politics by freediver.

More Blackday GetUp! concocted FAKE NEWS trash moved to the rubbish tin.

freediver wrote on Jan 3^rd, 2020 at 6:29am:

Quote: Newstart is so low that the Grattan Institute has found that it stops people looking for work. How does that work?

I would imagine that the argument from White Knight would be that if you have 0 cash
It is hard to afford nice clothes an automobile to drive and sweet smelling aftershave to impress a potential employer

What people who can't afford those things need to understand
Is that that makes it even more crucial
That they fight with every ounce of energy they have
And crawl through the mud
Elbows deep in the mud
And try and get themselves back onto the narrow road to success
And view the situation as a critical emergency

If you are that beaten down
Then you need to devote every resource you have
To trying to climb out of the pit in to which you have allowed yourself to fall

People who are already successful
Can afford the luxury of whining and complaining

If you are at the bottom of the hierarchy
If you are really doing it tough

Then you can afford no such luxury

You have to devote every fibre of your being
To propelling yourself forward

You really want a view yourself
As a person who's going to get down in the mud and the filth
And despite your aching bones
And despite the fact that you are exhausted
You are going to never give up until you crawl forward through that mud

It's the paradox that the people who can least afford the luxury of complaint and quitting
Are the people who are most prone 2 complaining and quitting

Go ahead and try it as a strategy
Get back to us in 5 years
My prediction is that you will be in a worse situation than you are at the moment
Recognising that as a fact
What harm would there be in taking aqua scoots excellent advice

Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.   :(

whiteknight wrote on Jan 3^rd, 2020 at 8:45am:

Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.   :(

No one is forced to stay at the bottom of the hierarchy
No one is forced to remain on newstart

There has never been a land with more opportunities than Australia
There has never been a time of more prosperity then 2020

Any physically healthy Australian citizen who thinks that they should be a crybaby about their standard of living in Australia in 2020 has a severe mental health disability
They are completely out of touch with reality

aquascoot wrote on Jan 3^rd, 2020 at 10:57am:

whiteknight wrote on Jan 3rd, 2020 at 8:45am: Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.   :( No one is forced to stay at the bottom of the hierarchy No one is forced to remain on newstart There has never been a land with more opportunities than Australia There has never been a time of more prosperity then 2020 Any physically healthy Australian citizen who thinks that they should be a crybaby about their standard of living in Australia in 2020 has a severe mental health disability They are completely out of touch with reality

Aqua,
you seem to believe that because you think something
that it's therefore true.

Fact check - it's normal for 200 people to apply for many jobs.
The odds of getting that job are small.
Some people can't get a job no matter how hard they try.

How much are narcissism, rigidity of thought, habitual dogma, blinkered ideology or simply a Self-serving attitude, involved in the reasoning behind the opposition to a rise in the Newstart allowance?

The consolidation of wealth and maximization of profits through squeezing the poor and middle classes can only go on for so long. It can only lead to a shrinking market and subsequent loss. But such is the way of Predatory Capitalism and the dog eat dog alpha stratagem, so it would seem.


"I'm baffled about the reason that seemingly intelligent people refuse to acknowledge the value of research and experts in the relevant field. The science shows that narcissists are usually those who dismiss the value of experts, but also those who are blinkered by their chosen ideology, those who adhere to habitual dogma and who struggle to see beyond their biases due to rigidity of thought. Of course, there are also those who benefit personally from a particular stance, especially in the short term. In that case, they choose to ignore the long term costs or think that they can avoid them. We see much of this in politicians."

Comment by J. M.

https://www.canberratimes.com.au/story/6561837/the-economic-case-for-increasing-newstart/#comments





 

Bobby. wrote on Jan 3^rd, 2020 at 11:01am:

aquascoot wrote on Jan 3rd, 2020 at 10:57am: whiteknight wrote on Jan 3rd, 2020 at 8:45am: Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.   :( No one is forced to stay at the bottom of the hierarchy No one is forced to remain on newstart There has never been a land with more opportunities than Australia There has never been a time of more prosperity then 2020 Any physically healthy Australian citizen who thinks that they should be a crybaby about their standard of living in Australia in 2020 has a severe mental health disability They are completely out of touch with reality Aqua, you seem to believe that because you think something that it's therefore true. Fact check - it's normal for 200 people to apply for many jobs. The odds of getting that job are small. Some people can't get a job no matter how hard they try.

I think Aqua is basically well meaning, but incredibly bound by his ideology.

From what I've seen of the other opposition here Juliar, they're simply acting like the usual greedy Self-serving Liberal persona that we've mostly come to expect.

Bobby. wrote on Jan 3^rd, 2020 at 11:01am:

aquascoot wrote on Jan 3rd, 2020 at 10:57am: whiteknight wrote on Jan 3rd, 2020 at 8:45am: Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.   :( No one is forced to stay at the bottom of the hierarchy No one is forced to remain on newstart There has never been a land with more opportunities than Australia There has never been a time of more prosperity then 2020 Any physically healthy Australian citizen who thinks that they should be a crybaby about their standard of living in Australia in 2020 has a severe mental health disability They are completely out of touch with reality Aqua, you seem to believe that because you think something that it's therefore true. Fact check - it's normal for 200 people to apply for many jobs. The odds of getting that job are small. Some people can't get a job no matter how hard they try.

Bobby,

Even if we accept that is the case , is " not trying " a more successful strategy then " trying" ?

So if this economic case is so strong, why is no-one here able to say what it is?

freediver wrote on Jan 3^rd, 2020 at 1:39pm:

So if this economic case is so strong, why is no-one here able to say what it is?

Did you happen to read the first post?

"Imagine a single policy that could boost our lacklustre economy by $4 billion, create an additional 12,000 jobs by 2021, disproportionately support regional and remote communities doing it tough with drought and bushfires, reduce inequality by benefiting the poorest fifth of Australians 28 times more than the richest, disproportionately support women, boost wages and corporate profits, and increase federal and state tax revenue by more than $1.25 billion."

"What the economy needs is more demand. While businesses have stopped investing and expanding, their profits are at record highs, the ASX200 has broken new ground, bond yields and interest rates are at record lows and share buybacks and dividend payouts are at unprecedented levels. The message from the data is clear: businesses are awash with cash, and can easily get more if they want it, but they will only invest and hire if there is demand for what they sell."

0ktema wrote on Jan 3^rd, 2020 at 11:37am:

Bobby. wrote on Jan 3rd, 2020 at 11:01am: aquascoot wrote on Jan 3rd, 2020 at 10:57am: whiteknight wrote on Jan 3rd, 2020 at 8:45am: Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it.   :( No one is forced to stay at the bottom of the hierarchy No one is forced to remain on newstart There has never been a land with more opportunities than Australia There has never been a time of more prosperity then 2020 Any physically healthy Australian citizen who thinks that they should be a crybaby about their standard of living in Australia in 2020 has a severe mental health disability They are completely out of touch with reality Aqua, you seem to believe that because you think something that it's therefore true. Fact check - it's normal for 200 people to apply for many jobs. The odds of getting that job are small. Some people can't get a job no matter how hard they try. I think Aqua is basically well meaning, but incredibly bound by his ideology. From what I've seen of the other opposition here Juliar, they're simply acting like the usual greedy Self-serving Liberal persona that we've mostly come to expect.

Aqua should start up a business like Tony Robbins -
with his motivation speeches.


https://upload.wikimedia.org/wikipedia/commons/thumb/5/5e/Tony_Robbins.jpg/220px-Tony_Robbins.jpg

0ktema wrote on Jan 3^rd, 2020 at 2:00pm:

freediver wrote on Jan 3rd, 2020 at 1:39pm: So if this economic case is so strong, why is no-one here able to say what it is? Did you happen to read the first post? "Imagine a single policy that could boost our lacklustre economy by $4 billion, create an additional 12,000 jobs by 2021, disproportionately support regional and remote communities doing it tough with drought and bushfires, reduce inequality by benefiting the poorest fifth of Australians 28 times more than the richest, disproportionately support women, boost wages and corporate profits, and increase federal and state tax revenue by more than $1.25 billion." "What the economy needs is more demand. While businesses have stopped investing and expanding, their profits are at record highs, the ASX200 has broken new ground, bond yields and interest rates are at record lows and share buybacks and dividend payouts are at unprecedented levels. The message from the data is clear: businesses are awash with cash, and can easily get more if they want it, but they will only invest and hire if there is demand for what they sell."

I've never been able to get my head around this idea that a consumer is valuable just by way of consuming.
A consumer must also create something of value and contribute so he has something to trade.

In what way is a bush tick ( a consumer  of my cattle s blood)  valuable to the cow.

It is surely just a parasitic relationship.


If I pay taxes and a centrelink recipient buys my beef stake with that money handed to him by a middleman ( canberra) I make no gain out of that deal.

If I sell my stake to a chinaman who makes me an iPhone, then that is the basis of a market economy.

If white knight wants to come and put up some fences, I am happy to provide him with a hearty meal.
If white knight wants to sit on a computer and " complain" why would I sacrifice a cow to his complaining.
In what way does the cow or my business benefit ?

Aqua should start up a business like Tony Robbins -
with his motivation speeches.


https://upload.wikimedia.org/wikipedia/commons/thumb/5/5e/Tony_Robbins.jpg/220px-Tony_Robbins.jpg

Bobby. wrote on Jan 3^rd, 2020 at 2:43pm:

Aqua should start up a business like Tony Robbins - with his motivation speeches. https://upload.wikimedia.org/wikipedia/commons/thumb/5/5e/Tony_Robbins.jpg/220px-Tony_Robbins.jpg

Tony started off pretty broke.
So did Oprah.
Pregnant to a relative at 14 and in a psych hospital, then homeless.

She got down , elbows deep in the mud, and crawled her way up the narrow road.
I doubt any able bodied adult in Australia faces homelessness, discrimination and disadvantage that Oprah did.
Why won't people try to copy that?

Why don't they have a plan to try to improve?

Because if they don't make a plan, they never realise they are failing.
They can just suck at life forever and then it's over.

Any plan is better then no plan
Go and interview the 700,000 on new start and ask them what their plan is.
Ask them how they intend to improve each day when they bounce out of bed.

99 % will have NO plan except to COPE.

Just try to cope with this rough world.
Coping mentality..
To be that rediculous when opportunity abounds everywhere like low hanging fruit
Dude
That's insane

aquascoot wrote on Jan 3^rd, 2020 at 2:54pm:

Bobby. wrote on Jan 3rd, 2020 at 2:43pm: Aqua should start up a business like Tony Robbins - with his motivation speeches. https://upload.wikimedia.org/wikipedia/commons/thumb/5/5e/Tony_Robbins.jpg/220px-Tony_Robbins.jpg Tony started off pretty broke. So did Oprah. Pregnant to a relative at 14 and in a psych hospital, then homeless. She got down , elbows deep in the mud, and crawled her way up the narrow road. I doubt any able bodied adult in Australia faces homelessness, discrimination and disadvantage that Oprah did. Why won't people try to copy that? Why don't they have a plan to try to improve? Because if they don't make a plan, they never realise they are failing. They can just suck at life forever and then it's over. Any plan is better then no plan Go and interview the 700,000 on new start and ask them what their plan is. Ask them how they intend to improve each day when they bounce out of bed. 99 % will have NO plan except to COPE. Just try to cope with this rough world. Coping mentality.. To be that rediculous when opportunity abounds everywhere like low hanging fruit Dude That's insane

People pay good money to go to Tony Robbin's speeches.
When they leave they feel so energized -
as if they rule the world.

About a week later when they realise that nothing
has changed except they were parted with their money - they then get angry.

Bobby. wrote on Jan 3^rd, 2020 at 3:20pm:

aquascoot wrote on Jan 3rd, 2020 at 2:54pm: Bobby. wrote on Jan 3rd, 2020 at 2:43pm: Aqua should start up a business like Tony Robbins - with his motivation speeches. https://upload.wikimedia.org/wikipedia/commons/thumb/5/5e/Tony_Robbins.jpg/220px-Tony_Robbins.jpg Tony started off pretty broke. So did Oprah. Pregnant to a relative at 14 and in a psych hospital, then homeless. She got down , elbows deep in the mud, and crawled her way up the narrow road. I doubt any able bodied adult in Australia faces homelessness, discrimination and disadvantage that Oprah did. Why won't people try to copy that? Why don't they have a plan to try to improve? Because if they don't make a plan, they never realise they are failing. They can just suck at life forever and then it's over. Any plan is better then no plan Go and interview the 700,000 on new start and ask them what their plan is. Ask them how they intend to improve each day when they bounce out of bed. 99 % will have NO plan except to COPE. Just try to cope with this rough world. Coping mentality.. To be that rediculous when opportunity abounds everywhere like low hanging fruit Dude That's insane People pay good money to go to Tony Robbin's speeches. When they leave they feel so energized - as if they rule the world. About a week later when they realise that nothing has changed except they were parted with their money - they then get angry.

Nothing can change in a week bobby.
And why pay to see Robbins when there are millions of free podcasts to listen to on your own personal psychology.

But people are very resistant to change bobby

Lets say you have spent a lifetime complaining about how government  and rich people are holding you down.
That's YOU now.
Those neural pathways to thinking that way are entrenched.
If you want to think another way, you almost have to spend as much time and effort building a new pathway and reinforcing it over and over and over.

About 3500 repetitions, the army say, before you develop the muscle memory to over ride your pre existing modes of behaviour.

So if you want to get fit, that's maybe 10 years you have to commit to daily exercise before it becomes YOU.
If you want to lose weight, that's maybe 10 years of good eating before you are a new person and can take your foot off the pedal.

But here's the thing bobby.
If you just commit to improve .00001 % everyday, then you win every game , every day, for eternity.
It's he slow brutal boring nature of climbing the narrow road.

You will always be a fool before you are a master.
Tiger woods, Rafal nadal did not win the first time they played.

Success is boring and moves forward at a glacial pace.

Trump didn't get into the White House at 24 after he built his first hotel.
He was talking about and strategically planning it since the late 80's.

But if you bounce out of bed without an aim, then you are guaranteed to fail.
If you have an aim ( even if you aim badly ) and you keep on course correcting, you will win.

Not in one week though  ;)

Aqua - you could make $10k per week as
the new Tony Robbins.

https://upload.wikimedia.org/wikipedia/commons/thumb/5/5e/Tony_Robbins.jpg/220px-Tony_Robbins.jpg


You actually believe your own bullshit.  ;D

bobby

google

limiting beliefs

and

success barriers  ;)

Jessica applies for 50 jobs a month and battles to survive on Newstart, with nothing left after bills and rent    :(

News.com.au


Newstart a national embarrassment — ACOSS and Deloitte
Newstart hasn't increase in real terms for over 24 years. At less than $40 a day, the report argues for an increase of $10 a day.
Jessica will apply for up to 50 jobs over the course of May, as she does every month.

The 22-year-old will juggle that gruelling search with a terrifying battle to survive on a paltry sum that leaves her with virtually nothing after the cost of rent, bills and groceries.

“It’s so hard to make ends meet,” Jessica told news.com.au. “No matter what I do, I can’t seem to get ahead.”   :(

She shares a unit in Frankston in Melbourne’s south with her grandmother and the pair splits expenses like a regular share house.

Jessica, who hopes to start study at TAFE in July and eventually become a registered nurse, told news.com.au she received $600 each fortnight from Centrelink, comprising the Newstart unemployment benefit and rent assistance.

From that, $250 goes to housing, $150 to food, $20 for public transport, $30 for a home internet connection, $20 for prepaid phone credit and $10 for miscellaneous minor expenses.

She has a longstanding debt that she’s slowly chipping away at and is trying to save up for study.

“I recently just got a Centrelink loan so it’s gone down again,” Jessica explained.

“I had a few big bills I had to pay. I was hoping to put (the loan) towards getting a cheap car but the bills chewed it all up.”

From news.com.au

Jessica battles to make ends meet on Newstart.



Much of her time is spent trawling job websites and Facebook groups where casual vacancies are posted, filling out applications, sitting assessments and hoping for an interview.

“I apply for maybe 40 or 50 jobs a month. I get the odd interview here or there but just can’t get someone to give me a go,” she said.

“I don’t think people want to hire 22-year-olds for a job that they can pay a 16-year-old to do for much less.

“I’ve had bits and pieces of work over the past few years but not much. I might get waitressing for a few hours a week here or there. It’s hard to find a stable job that pays enough to survive.”

Low-skilled work is hard to come by and there’s often strong competition for jobs that don’t have guaranteed hours, meaning an added layer of uncertainty.

Jessica will do “pretty much anything” at this point. She’s open to any kind of paid work in whatever industry will take her.

“But transport is the big thing. You need your own transport to get to a lot of jobs. Trains and buses aren’t always reliable if you need to start early or finish late. The buses aren’t running.

“How do you get home late at night from work? I can’t afford a cab. Do I walk home at 11pm or midnight, on my own in the dark?”    :(

And there’s simply not enough work to go around, with Australian Bureau of Statistics data showing there’s just one vacancy on average for every eight jobseekers.


A campaign is under way to urgently increase Newstart and to change the framework surrounding it. Picture: AAPSource:AAP

While our unemployment is low, experts say Australia is in the grips of an underemployment crisis, where people have to multiple casual or part-time jobs to make ends meet.

The unemployment benefit Newstart, which up to 800,000 people receive, effectively hasn’t increased for more than 20 years but during that time, the cost of living has soared and anyone who needs welfare is likely to struggle just to survive.

Conny Lenneberg, the executive director of the charity the Brotherhood of St Laurence, which runs the Share the Pie campaign to increase Newstart, said most people cope by eating less.

“People have no choice but to do without,” Ms Lenneberg said.

“They’re increasingly leaning on the charitable sector for support. We’ve seen a growth in the number of food banks over the past decade. We’ve seen increasing reliability on homelessness and housing support services. We’re seeing worsening mental health.

“It’s just not acceptable for one of the wealthiest countries in the world to ignore a very broadbased recognition that Newstart is set at a level that’s not sufficient.”

Community groups and even the business community are now calling for the government to urgently lift the payments.

Even former Prime Minister John Howard said the amount is inadequate and should be increased.

Mmm, you make an interesting point whiteknight about the unemployed and Newstart increases.

You can't get a job that doesn't a exist, and we can't force private employers to employ people, so what can we do?

Maybe increasing Newstart is the way to go.

aquascoot wrote on Jan 3^rd, 2020 at 2:41pm:

0ktema wrote on Jan 3rd, 2020 at 2:00pm: freediver wrote on Jan 3rd, 2020 at 1:39pm: So if this economic case is so strong, why is no-one here able to say what it is? Did you happen to read the first post? "Imagine a single policy that could boost our lacklustre economy by $4 billion, create an additional 12,000 jobs by 2021, disproportionately support regional and remote communities doing it tough with drought and bushfires, reduce inequality by benefiting the poorest fifth of Australians 28 times more than the richest, disproportionately support women, boost wages and corporate profits, and increase federal and state tax revenue by more than $1.25 billion." "What the economy needs is more demand. While businesses have stopped investing and expanding, their profits are at record highs, the ASX200 has broken new ground, bond yields and interest rates are at record lows and share buybacks and dividend payouts are at unprecedented levels. The message from the data is clear: businesses are awash with cash, and can easily get more if they want it, but they will only invest and hire if there is demand for what they sell." I've never been able to get my head around this idea that a consumer is valuable just by way of consuming. A consumer must also create something of value and contribute so he has something to trade. In what way is a bush tick ( a consumer  of my cattle s blood)  valuable to the cow. It is surely just a parasitic relationship. If I pay taxes and a centrelink recipient buys my beef stake with that money handed to him by a middleman ( canberra) I make no gain out of that deal. If I sell my stake to a chinaman who makes me an iPhone, then that is the basis of a market economy. If white knight wants to come and put up some fences, I am happy to provide him with a hearty meal. If white knight wants to sit on a computer and " complain" why would I sacrifice a cow to his complaining. In what way does the cow or my business benefit ?

Your image is too limited - the bush tick also pays taxes and keeps the cow's marrow producing good blood...

0ktema wrote on Jan 3^rd, 2020 at 2:00pm:

freediver wrote on Jan 3rd, 2020 at 1:39pm: So if this economic case is so strong, why is no-one here able to say what it is? Did you happen to read the first post? "Imagine a single policy that could boost our lacklustre economy by $4 billion, create an additional 12,000 jobs by 2021, disproportionately support regional and remote communities doing it tough with drought and bushfires, reduce inequality by benefiting the poorest fifth of Australians 28 times more than the richest, disproportionately support women, boost wages and corporate profits, and increase federal and state tax revenue by more than $1.25 billion." "What the economy needs is more demand. While businesses have stopped investing and expanding, their profits are at record highs, the ASX200 has broken new ground, bond yields and interest rates are at record lows and share buybacks and dividend payouts are at unprecedented levels. The message from the data is clear: businesses are awash with cash, and can easily get more if they want it, but they will only invest and hire if there is demand for what they sell."

That is the claim being made, I see no case for why it is true. It is a pretty vacuous argument, and about as useful as waving your arms in the air.

@ freediver

I've been reading sections of the "Analysis of the impact of raising benefit rates" put together for the  Australian Council of Social Service by Deloitte Access Economics.

There's no doubt of the positive economic impacts, however these would fade over time.

The greatest long term dividend would be bringing greater fairness to our society at a relatively small overall cost to tax payers.



Quote:

The impact on Australia’s economy Lifting these allowances would have both prosperity and fairness impacts.The fairness impacts dominate, but there are prosperity points to consider too. Deloitte Access Economics used our Horizon macroeconometric model of the Australian economy to model a lift in allowances that is effective immediately.  The direct cost of the Federal budget is about $3.3billion a year:In nominal dollars, the size of the Australian economy (“the prosperity dividend”) would lift by some $4.0 billion as a result of that extra spending,meaning that the size of the economy initially increases broadly in line with the initial income injection of $3.3billion.That’s because several factors offset.  Among the negatives:–Most notably, some of the extra spending by beneficiaries would be on imports.–And a modest increase in the value of the Australian dollar would weigh on exports.–While, similarly, interest rates would also be a little higher than otherwise.  Among other things, that would see fewer new homes being built (as well as less done by way of renovating old homes). Among the positives:–That money goes as extra income to a group that, on average, is the poorest of the poor in Australia.  Other things equal, most of it is therefore spent.So it’s no surprise that the bulk of the dollars –some $3.3billion a year –show up as extra spending by consumers.  –And while imports would go up, the bulk of the extra spending by beneficiaries would be spent at home.  That extra spending would create some 12,000 extra jobs.  And the accompanying strength in the market for workers would lift wages.  (Prices would also be a little higher, but the increase in wages would outweigh that in prices.)

Quote:

It is important to note that the modelling may well understate the extent of the prosperity allowances. Most notably, it is important that these dollars would flow to the poorest of the poor in Australia.Their spending patterns are likely to differ to the averages assumed in the modelling here because of who they are and because of where they live: The beneficiaries are poor, so they’re likely to spend a larger share of any additional income and, within that, the money is more likely to be spent on essentials such as food, heating and shelter. That’s important, as such spending is less subject to import competition.  Or, to put that another way, more of those dollars are likely to stay in Australia than the model assumes. And the beneficiaries disproportionately live in regional Australia –where, again, import penetration is lower, so more of those dollars are likely to stay in Australia than the model assumes

https://www.acoss.org.au/wp-content/uploads/2018/09/DAE-Analysis-of-the-impact-of-raising-benefit-rates-FINAL-4-September-...-1.pdf

Quote:

There's no doubt of the positive economic impacts, however these would fade over time.

What are these benefits? Can you give an answer that doesn't sound like you are trying to wave a magic wand?

freediver wrote on Jan 3^rd, 2020 at 9:59pm:

Quote: There's no doubt of the positive economic impacts, however these would fade over time. What are these benefits? Can you give an answer that doesn't sound like you are trying to wave a magic wand?

I'm only going by what is written in the Deloitte Access Economics report! - It sounds like you don't think it's very credible, is that correct?  Anyway all aspects of the report are laid out with references to the primary studies.


From the report :

- $3.3billion a year would show up as extra spending by consumers

- 12,000 new jobs

- Australian wages would lift by around 0.2%

- Stronger economy would boost corporate profits

- Federal Government would raise an extra $1.0billion in taxes

- State and Territory Government revenues would increase by some $0.25billion

- Reduced financial pressures on the poor lead to better health outcomes


Importantly:

- Newstart benefits haven’t risen in line with national living standards for a quarter of a century

- So Newstart has shrunk as a share of:

–average wages,

–median wages,

–the minimum wage, and

–the age pension


At this point, I think anyone who still considers denying Newstart recipients a reasonable increase, are plainly and simply being mean spirited!

https://www.acoss.org.au/wp-content/uploads/2018/09/DAE-Analysis-of-the-impact-of-raising-benefit-rates-FINAL-4-September-...-1.pdf

Trouble is - and I've said this over and over - until such time as there is a moratorium on cost of living rises, which is a pretty major step - any increase is always only ever going to follow COL rises, and then actually contributes to further rises.

Unless you live in a controlled economy, these two can never be reconciled - what CAN be effected is to stop unnecessary additions to cost of living - primarily 'privatisation' nonsense -  and retain public utlities and services in public hands.

Worked well for years - then the parasites got into the act, starting with that leech, Greiner, and his rapacious ideas on 'government' - for him and his, that is.... not for the people.  A Lib 'elder statesman' - and the morons still listen to this thief.

Sir Grappler Truth Teller OAM wrote on Jan 4^th, 2020 at 12:48am:

moratorium on cost of living rises

Are you referring to price controls?

Sir Grappler Truth Teller OAM wrote on Jan 4^th, 2020 at 12:48am:

Trouble is - and I've said this over and over - until such time as there is a moratorium on cost of living rises, which is a pretty major step - any increase is always only ever going to follow COL rises, and then actually contributes to further rises. Unless you live in a controlled economy, these two can never be reconciled - what CAN be effected is to stop unnecessary additions to cost of living - primarily 'privatisation' nonsense -  and retain public utlities and services in public hands. Worked well for years - then the parasites got into the act, starting with that leech, Greiner, and his rapacious ideas on 'government' - for him and his, that is.... not for the people.  A Lib 'elder statesman' - and the morons still listen to this thief.

You ideas about a moratorium certainly need further explanation, but I strongly agree with you on 'privatisation' of public utilities and services being utter nonsense.

When talking about Newstart, you seem to be saying that any increase would be completely eaten up by cost of living increases. Why must any increase "always only ever going to follow COL rises"?  I don't understand your reasoning here, this didn't happen for pensioners when the Rudd Government increased the pension by $30 dollars per week, in-fact pensioners were left with significantly increased disposable incomes.

Yes and then they put the government funded pension age up.  Labor decided to put it up to 67.  Next thing the coalition thought it would be a good idea, to put it up to 70 years old.  This didn't happen.  However what a stupid idea it was in the first place.  A pension age of 65 years of age, is far more than enough.   :(

0ktema wrote on Jan 3^rd, 2020 at 11:05pm:

freediver wrote on Jan 3rd, 2020 at 9:59pm: Quote: There's no doubt of the positive economic impacts, however these would fade over time. What are these benefits? Can you give an answer that doesn't sound like you are trying to wave a magic wand? I'm only going by what is written in the Deloitte Access Economics report! - It sounds like you don't think it's very credible, is that correct?  Anyway all aspects of the report are laid out with references to the primary studies. From the report : - $3.3billion a year would show up as extra spending by consumers - 12,000 new jobs - Australian wages would lift by around 0.2% - Stronger economy would boost corporate profits - Federal Government would raise an extra $1.0billion in taxes - State and Territory Government revenues would increase by some $0.25billion - Reduced financial pressures on the poor lead to better health outcomes Importantly: - Newstart benefits haven’t risen in line with national living standards for a quarter of a century - So Newstart has shrunk as a share of: –average wages, –median wages, –the minimum wage, and –the age pension At this point, I think anyone who still considers denying Newstart recipients a reasonable increase, are plainly and simply being mean spirited! https://www.acoss.org.au/wp-content/uploads/2018/09/DAE-Analysis-of-the-impact-of-raising-benefit-rates-FINAL-4-September-...-1.pdf

Does the "extra" spending take into account the lower spending by whoever is paying for the increase?

freediver wrote on Jan 4^th, 2020 at 11:28am:

0ktema wrote on Jan 3rd, 2020 at 11:05pm: freediver wrote on Jan 3rd, 2020 at 9:59pm: Quote: There's no doubt of the positive economic impacts, however these would fade over time. What are these benefits? Can you give an answer that doesn't sound like you are trying to wave a magic wand? I'm only going by what is written in the Deloitte Access Economics report! - It sounds like you don't think it's very credible, is that correct?  Anyway all aspects of the report are laid out with references to the primary studies. From the report : - $3.3billion a year would show up as extra spending by consumers - 12,000 new jobs - Australian wages would lift by around 0.2% - Stronger economy would boost corporate profits - Federal Government would raise an extra $1.0billion in taxes - State and Territory Government revenues would increase by some $0.25billion - Reduced financial pressures on the poor lead to better health outcomes Importantly: - Newstart benefits haven’t risen in line with national living standards for a quarter of a century - So Newstart has shrunk as a share of: –average wages, –median wages, –the minimum wage, and –the age pension At this point, I think anyone who still considers denying Newstart recipients a reasonable increase, are plainly and simply being mean spirited! https://www.acoss.org.au/wp-content/uploads/2018/09/DAE-Analysis-of-the-impact-of-raising-benefit-rates-FINAL-4-September-...-1.pdf Does the "extra" spending take into account the lower spending by whoever is paying for the increase?

The idea that if we reduced taxes, this would someone increase spending is a half-truth. In most cases, spending would increase but up to a point - once that point is reached, then the additional disposable income would go to savings or investment.

Giving low-income and middle-income earners more money would increase their spending because the point at which they would stop spending extra is much higher than for a wealth person.

So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get?

Not just that. The where and what they will spend it on, will mean that more of the money will stay in Australia.


Quote:

It is important to note that the modelling may well understate the extent of the prosperity allowances. Most notably, it is important that these dollars would flow to the poorest of the poor in Australia.Their spending patterns are likely to differ to the averages assumed in the modelling here because of who they are and because of where they live: The beneficiaries are poor, so they’re likely to spend a larger share of any additional income and, within that, the money is more likely to be spent on essentials such as food, heating and shelter.  That’s important, as such spending is less subject to import competition.  Or, to put that another way, more of those dollars are likely to stay in Australia than the model assumes. And the beneficiaries disproportionately live in regional Australia –where, again, import penetration is lower, so more of those dollars are likely to stay in Australia than the model assumes.

https://www.acoss.org.au/wp-content/uploads/2018/09/DAE-Analysis-of-the-impact-of-raising-benefit-rates-FINAL-4-September-...-1.pdf

freediver wrote on Jan 4^th, 2020 at 12:10pm:

So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get?

It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners.

Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does.

Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly.

Auggie wrote on Jan 4^th, 2020 at 1:04pm:

freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly.

I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is.

freediver wrote on Jan 4^th, 2020 at 11:28am:

Does the "extra" spending take into account the lower spending by whoever is paying for the increase?

It seems like a very detailed report so it most likely does.

The positive attitude of the Governor of the Reserve Bank toward an increase also indicates an overall benefit for the economy!

freediver wrote on Jan 4^th, 2020 at 1:07pm:

Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is.

And we've just spend two pages trying to tell you that increasing Newstart Allowance increases consumer spending among the low and middle classes, which stimulates the economy. Your argument that some people spending more and 'other people spending less' - i.e. wealthy people spending less because of higher taxes, doesn't hold weight, because wealthy people tend to save money and invest it in an economy of low demand.

0ktema wrote on Jan 4^th, 2020 at 1:19pm:

freediver wrote on Jan 4th, 2020 at 11:28am: Does the "extra" spending take into account the lower spending by whoever is paying for the increase? It seems like a very detailed report so it most likely does. The positive attitude of the Governor of the Reserve Bank toward an increase also indicates an overall benefit for the economy!

What positive attitude?

freediver wrote on Jan 4^th, 2020 at 1:07pm:

Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is.

So now that the economic "argument" seems pretty well laid out, what do you make of it's merit? 

Y
whiteknight wrote on Jan 3^rd, 2020 at 3:37am:

January 1 2020 The economic case for increasing Newstart Canberra Times     Latest News Imagine a single policy that could boost our lacklustre economy by $4 billion, create an additional 12,000 jobs by 2021, disproportionately support regional and remote communities doing it tough with drought and bushfires, reduce inequality by benefiting the poorest fifth of Australians 28 times more than the richest, disproportionately support women, boost wages and corporate profits, and increase federal and state tax revenue by more than $1.25 billion. Compared to the age pension, disability support payments, the minimum wage and average wages, Newstart has shrunk dramatically over the past 25 years. Now suppose this policy has longer-term benefits: that it could automatically boost the economy during times of weakness without the time lags associated with infrastructure and other stimulus spending; that it would automatically withdraw from the economy when times were good without the permanent cost of tax cuts and other stimulus measures; and that it would boost GDP growth and reduce economic volatility. And suppose the cost of this policy was only 0.6 per cent of the federal budget, meaning it could be funded without losing the politically cherished budget surplus. Sound good? Then, congratulations, you support increasing Newstart. Newstart is the main income support payment for people who are unemployed. Compared to the age pension, disability support payments, the minimum wage and average wages, it has shrunk dramatically over the past 25 years. This is bad news for the economy, and even worse news for the 723,000 people who are forced to live off it. While the age pension has doubled in real terms since 2000, Newstart has remained unchanged. The reason is simple, but illogical. Newstart is indexed against inflation, whereas other government payments are indexed against wages, which more accurately measure living standards. If inflation and wages moved together, this wouldn't be a problem. But wages have outgrown inflation by 40 per cent over the past 25 years, meaning that Newstart recipients, in real terms, have fallen far behind. By any measure, people on Newstart are among the most disadvantaged. If a society can be judged by how it treats its most vulnerable, Australia is not looking good. An analysis by ANU economists Ben Phillips, Matthew Gray, Cukkoo Joseph and Richard Webster shows that the poverty rate among households that depend on allowances as their primary income rose from 39 per cent in 1993 to 80 per cent in 2017. Before we get onto the economics, it's worth rebutting some of the common misconceptions about Newstart. The idea that people on Newstart are lazy young urban-dwellers is not only factually incorrect (the typical Newstart recipient is a middle-aged woman living outside the big cities) but ignores the fact that, across the economy, there is only one vacant job for every 4.4 unemployed people. It's hard to take a job that doesn't exist. And despite all its controversy, Newstart happens to be one of the cheaper welfare programs around, costing less than one-seventh of the age pension. Increasing Newstart is also the quickest, easiest and most effective way of reducing poverty in Australia. READ MORE:     Editorial: The Newstart payment is far too low     Public housing residents on Newstart falling behind on rent     Newstart: It's a daily battle just to survive The argument that increasing Newstart reduces the incentive to find a job is similarly baseless. Newstart is so low that the Grattan Institute has found that it stops people looking for work. Many people on Newstart already have jobs but cannot get enough hours. And if you're aware of research findings on intergenerational disadvantage, you'll know that your childhood postcode shapes your life outcomes. Demonising the poor, in other words, is a bit like demonising someone who didn't win at a game of luck. There is also a strong economic case for increasing Newstart. Consider the short-term benefits first. You didn't have to go to the Boxing Day sales to know that the economy is not doing well. And it's little wonder. Compared to the first half of the decade, retail spending growth over the past five years is down 30 per cent, quarterly wage growth is down 40 per cent and consumption growth is down 15 per cent. The rate at which the economy creates new businesses has fallen from 14 to 11 per cent. Investment now contracts each quarter by an average of 0.4 per cent and productivity growth has flatlined. GDP growth remains around global financial crisis levels. What the economy needs is more demand. While businesses have stopped investing and expanding, their profits are at record highs, the ASX200 has broken new ground, bond yields and interest rates are at record lows and share buybacks and dividend payouts are at unprecedented levels. The message from the data is clear: businesses are awash with cash, and can easily get more if they want it, but they will only invest and hire if there is demand for what they sell. Enter Newstart. The ANU's economists show that the poverty gap for people on Newstart - the absolute difference between a household's income and the poverty line - has increased five fold.

Paying people who could but do not work boosts the economy and creates jobs.  With that 'logic' we should ALL stop working. 

freediver wrote on Jan 4^th, 2020 at 1:29pm:

0ktema wrote on Jan 4th, 2020 at 1:19pm: freediver wrote on Jan 4th, 2020 at 11:28am: Does the "extra" spending take into account the lower spending by whoever is paying for the increase? It seems like a very detailed report so it most likely does. The positive attitude of the Governor of the Reserve Bank toward an increase also indicates an overall benefit for the economy! What positive attitude?

His suggestion that increasing Newstart would be good for the economy, was reported in the news six months or more ago. He stated this at a time when Scott Morrison's Government was pushing hard against any increase.


Quote:

Speaking at an event in Adelaide, Philip Lowe said “very low” household income growth was the reason the economy had “softened”, which has prompted the RBA to reduce interest rates to a record low of 1.25%. Asked for his view on the role of income support levels, Lowe suggested an increase to the $277.85-a-week payment would help stimulate the economy, though it was “a matter for the government”. “Anything at the moment that can boost income growth is good for the economy,” he said. “So the interest rate cuts will boost household disposable income because people pay a lot of interest, and I hope the tax rebates get through the parliament and that will boost income. “And perhaps, in time, stronger support payments for unemployed people will help as well but that’s up to the government.”

https://www.theguardian.com/australia-news/2019/jun/21/reserve-bank-governor-suggests-newstart-increase-would-be-good-for-the-economy

0ktema wrote on Jan 4^th, 2020 at 1:56pm:

freediver wrote on Jan 4th, 2020 at 1:29pm: 0ktema wrote on Jan 4th, 2020 at 1:19pm: freediver wrote on Jan 4th, 2020 at 11:28am: Does the "extra" spending take into account the lower spending by whoever is paying for the increase? It seems like a very detailed report so it most likely does. The positive attitude of the Governor of the Reserve Bank toward an increase also indicates an overall benefit for the economy! What positive attitude? His suggestion that increasing Newstart would be good for the economy, was reported in the news six months or more ago. He stated this at a time when Scott Morrison's Government was pushing hard against any increase. Quote: Speaking at an event in Adelaide, Philip Lowe said “very low” household income growth was the reason the economy had “softened”, which has prompted the RBA to reduce interest rates to a record low of 1.25%. Asked for his view on the role of income support levels, Lowe suggested an increase to the $277.85-a-week payment would help stimulate the economy, though it was “a matter for the government”. “Anything at the moment that can boost income growth is good for the economy,” he said. “So the interest rate cuts will boost household disposable income because people pay a lot of interest, and I hope the tax rebates get through the parliament and that will boost income. “And perhaps, in time, stronger support payments for unemployed people will help as well but that’s up to the government.” https://www.theguardian.com/australia-news/2019/jun/21/reserve-bank-governor-suggests-newstart-increase-would-be-good-for-the-economy

Cut the taxes of productive people.
That would boost the economy a lot more.

0ktema wrote on Jan 4^th, 2020 at 1:32pm:

freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?

It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive.

Frank wrote on Jan 4^th, 2020 at 1:48pm:

Paying people who could but do not work boosts the economy and creates jobs.  With that 'logic' we should ALL stop working.

Thank you, for that profound piece of logical work Frank.

It's something to ponder when nuances of reality become too tiring.

freediver wrote on Jan 4^th, 2020 at 2:31pm:

0ktema wrote on Jan 4th, 2020 at 1:32pm: freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive.

Beyond it's crap, I'm not completely clear on what your intending to say here.

Knowing who the "they" is that your referring to would help.

0ktema wrote on Jan 4^th, 2020 at 2:32pm:

Frank wrote on Jan 4th, 2020 at 1:48pm: Paying people who could but do not work boosts the economy and creates jobs.  With that 'logic' we should ALL stop working.   Thank you, for that profound piece of logical work Frank. It's something to ponder when nuances of reality become too tiring.

It's the thrust (if that's not too active and vigorous a metaphor for its argument) of your OP.

0ktema wrote on Jan 4^th, 2020 at 3:35pm:

freediver wrote on Jan 4th, 2020 at 2:31pm: 0ktema wrote on Jan 4th, 2020 at 1:32pm: freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive. Beyond it's crap, I'm not completely clear on what your intending to say here. Knowing who the "they" is that your referring to would help.

Whoever is making the argument.

freediver wrote on Jan 4^th, 2020 at 7:33pm:

0ktema wrote on Jan 4th, 2020 at 3:35pm: freediver wrote on Jan 4th, 2020 at 2:31pm: 0ktema wrote on Jan 4th, 2020 at 1:32pm: freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive. Beyond it's crap, I'm not completely clear on what your intending to say here. Knowing who the "they" is that your referring to would help. Whoever is making the argument.

OK.

Now from what I can make out, your saying that consumers are the wrong target group to focus on for boosting the economy?

And anyone who purposefully doesn't include something about the alternative of using interest rates as a lever, are being deceptive in their argument, and it's not fair to focus on merely one area or group.

Is that anywhere near what your saying?

Honestly, that post of yours is hard work to make sense of!

Frank wrote on Jan 4^th, 2020 at 5:15pm:

0ktema wrote on Jan 4th, 2020 at 2:32pm: Frank wrote on Jan 4th, 2020 at 1:48pm: Paying people who could but do not work boosts the economy and creates jobs.  With that 'logic' we should ALL stop working.   Thank you, for that profound piece of logical work Frank. It's something to ponder when nuances of reality become too tiring. It's the thrust (if that's not too active and vigorous a metaphor for its argument) of your OP.

Really, I don't get the point of arguments to absurdity, like the one you served up. They can never truly forward the contest of ideas.

By the way the OP was whiteknight.  ;)

0ktema wrote on Jan 4^th, 2020 at 8:46pm:

Frank wrote on Jan 4th, 2020 at 5:15pm: 0ktema wrote on Jan 4th, 2020 at 2:32pm: Frank wrote on Jan 4th, 2020 at 1:48pm: Paying people who could but do not work boosts the economy and creates jobs.  With that 'logic' we should ALL stop working.   Thank you, for that profound piece of logical work Frank. It's something to ponder when nuances of reality become too tiring. It's the thrust (if that's not too active and vigorous a metaphor for its argument) of your OP. I really don't get the point of arguments to absurdity, like the one you served up.  By the way the OP was whiteknight.  ;)

Quote:

In logic, reductio ad absurdum (Latin for "reduction to absurdity"), also known as argumentum ad absurdum (Latin for "argument to absurdity"), apagogical arguments, negation introduction or the appeal to extremes, is a form of argument that attempts to establish a claim by showing that the opposite scenario would lead to absurdity or contradiction.[1][2] https://en.wikipedia.org/wiki/Reductio_ad_absurdum

It's been used a couple of times in thread.

I actually think the dole should be administered by local government, out of local rate payers' money.

Local people helping local people.

Much better.

Interesting!
What do you see as the key benefits of that Frank?

0ktema wrote on Jan 4^th, 2020 at 8:58pm:

Interesting! What do you see as the key benefits of that Frank?

Higher rates are a good thing?

0ktema wrote on Jan 4^th, 2020 at 8:58pm:

Interesting! What do you see as the key benefits of that Frank?

People would know who are getting the benefit they are paying. The bludgers would be weeded out and the deserving would have all the support they need.

Benefits would be allocated by their peers, people who actually know them.


Welfare should be a local community affair.

Creating a sense of community is important and I see something of where your coming from, but I also see a lot of perilous pitfalls.

For one, area's of high unemployment would fall under great disadvantage, not unlike areas of the local government school system in the USA.

Poor people look after each other.  Charity drives consistently show that poorer peoples are more generous.

I'd rather trust people in my community to decide who is deserving of what than a faceless, remote bureaucrat to allocate benefits sight unseen.  Very importantly, I want to know how my tax dollars are spent. I don't want to see drugged out lay-abouts in my community living on my taxes.  I don't want to go to work so they don't have to.

I am happy to help the unfortunate and the deserving but I do not want to go to work and pay taxes so some lazy, opportunistic bum doesn't have to.


The current system has a lot of room to accommodate the opportunistic, lazy bums.  Make it local.

We all want communities, after all, don't we? Let's have communities of obligations and responsibilities as well a communities of rights.

Two way. Not a lot to ask.

Setanta wrote on Jan 4^th, 2020 at 9:04pm:

0ktema wrote on Jan 4th, 2020 at 8:58pm: Interesting! What do you see as the key benefits of that Frank? Higher rates are a good thing?

Yeah it would be good. I imagine there would be a quite a few ratepayers who would love to have a ready focus for their anger and worldly frustrations and rejoice in being able to get the pitch forks out to stimulate the unemployed.

Nothing could go wrong!   ;)

When will the unemployed ever get a fair and just increase?.   :(

Frank wrote on Jan 4^th, 2020 at 9:29pm:

Poor people look after each other.  Charity drives consistently show that poorer peoples are more generous. I'd rather trust people in my community to decide who is deserving of what than a faceless, remote bureaucrat to allocate benefits sight unseen.  Very importantly, I want to know how my tax dollars are spent. I don't want to see drugged out lay-abouts in my community living on my taxes.  I don't want to go to work so they don't have to. I am happy to help the unfortunate and the deserving but I do not want to go to work and pay taxes so some lazy, opportunistic bum doesn't have to. The current system has a lot of room to accommodate the opportunistic, lazy bums.  Make it local. We all want communities, after all, don't we? Let's have communities of obligations and responsibilities as well a communities of rights. Two way. Not a lot to ask.

Good sentiments Frank, though with today's world being so complicated and human nature being the way it is, I think it would be very difficult to make workable.

Perhaps if we have more free time in our lives we will be able to build more endearing and enduring communities.

I have some hope that once we crack the cheap energy conundrum, with the help of Technology and advances in AI, we could reduce working hours and have more time to serve and care for each other.

Until then keeping society relatively stable will probably remain a growing task for governments around the world.

whiteknight wrote on Jan 4^th, 2020 at 9:36pm:

When will the unemployed ever get a fair and just increase?.   :(

Perhaps when someone can fully decipher this post of freediver's - trying to literally gave me a headache!



freediver wrote on Jan 4^th, 2020 at 2:31pm:

0ktema wrote on Jan 4th, 2020 at 1:32pm: So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive.

I am for taking as much out of the remote government's hands as possible and putting them into the hands of people on the ground = local governments. People would be much more involved if they had a stake in the way their money and goodwill is spent.

Dole, age care, disability pension, looking after the elderly, etc. We live our lives with other people. Governments tend to rob us of community. 

Local people making local decisions. Not hard. 

0ktema wrote on Jan 4^th, 2020 at 8:22pm:

freediver wrote on Jan 4th, 2020 at 7:33pm: 0ktema wrote on Jan 4th, 2020 at 3:35pm: freediver wrote on Jan 4th, 2020 at 2:31pm: 0ktema wrote on Jan 4th, 2020 at 1:32pm: freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive. Beyond it's crap, I'm not completely clear on what your intending to say here. Knowing who the "they" is that your referring to would help. Whoever is making the argument. OK. Now from what I can make out, your saying that consumers are the wrong target group to focus on for boosting the economy? And anyone who purposefully doesn't include something about the alternative of using interest rates as a lever, are being deceptive in their argument, and it's not fair to focus on merely one area or group. Is that anywhere near what your saying? Honestly, that post of yours is hard work to make sense of!

I'm saying that half the time, Keynsianism says that boosting the economy this way is a bad thing. Suggesting that this is a good Keynesian lever also carries the apparently hidden suggestion that starving these people is a good way to reel in the economy when Keyensianism dictates that it needs to be reeled in. But they left that bit out. That's what the "wrong target group" thing is about. Better to choke off the supply of home loans and business loans than choke off the supply of food to unemployed people. After all, they typically end up eating anyway.

@frediver

Yeah sorry, I'm not greatly educated on the intricacies of economic theory, much of it seems to be driven by ideology rather than human need or common sense.

That being said, I've found some of Professor Steve Keen's views on the economy to be interesting.


Anyway, even if you feel the economic argument holds no merit, I guess that doesn't mean that you necessarily think increasing the newstart rate in and of itself holds no merit.

You can appear quite abstruse at times, so I'm attempting to read between the lines.  ;)



https://www.youtube.com/watch?v=Ojo1pNRlBCk

Frank wrote on Jan 4^th, 2020 at 9:58pm:

I am for taking as much out of the remote government's hands as possible and putting them into the hands of people on the ground = local governments. People would be much more involved if they had a stake in the way their money and goodwill is spent. Dole, age care, disability pension, looking after the elderly, etc. We live our lives with other people. Governments tend to rob us of community.  Local people making local decisions. Not hard.

I can definitely see a lot of value in what you are saying there Frank. Still I think we will need more free time to make that sort of vision really workable.

If people can start getting off the hamster wheel, perhaps we could then step toward a future with greater local autonomy, where the higher levels of government run smoothly and unobtrusively.

I think your right, to a significant degree governments can tend to rob us of community. I would add that corporate greed is increasingly robbing us of our time, environment, individuality and increasingly our freedom (I think I just heard William Wallace call out lol). 

Reining in our slavery to consumerism and predatory capitalism and once again creating things that last, things of value that can readily be passed on to the grandchildren - getting beyond the need to constantly feed the ceaseless corporate hunger machine would indeed be a blessing.

Well, while we have vision we have hope, I guess!

Frank wrote on Jan 4^th, 2020 at 9:58pm:

I am for taking as much out of the remote government's hands as possible and putting them into the hands of people on the ground = local governments. People would be much more involved if they had a stake in the way their money and goodwill is spent. Dole, age care, disability pension, looking after the elderly, etc. We live our lives with other people. Governments tend to rob us of community.  Local people making local decisions. Not hard.

What would happen when people moved from one local govt area to another? To another state? You can't know everyone in your local area anyway. Wishful and fanciful thinking with not enough thought behind it, much like Auggie does.

@Setanta

There I was trying hard to go softly softly with Frank's bubble, putting considerable time and effort into the creation of some sort of visionary balloon animal and then you popped it!

Yeah, I was acting with the hope that he might be inspired to expand his vision.  :)

Frank wrote on Jan 4^th, 2020 at 8:53pm:

I actually think the dole should be administered by local government, out of local rate payers' money. Local people helping local people. Much better.

So, a local community consists of 99% religious nuts, and the remaning 1% is a gay person who needs charity. The 99% refuse to give that person their charity because of their sexual orientation. That hardly seems fair.

Frank wrote on Jan 4^th, 2020 at 9:29pm:

Poor people look after each other.  Charity drives consistently show that poorer peoples are more generous. I'd rather trust people in my community to decide who is deserving of what than a faceless, remote bureaucrat to allocate benefits sight unseen.  Very importantly, I want to know how my tax dollars are spent. I don't want to see drugged out lay-abouts in my community living on my taxes.  I don't want to go to work so they don't have to. I am happy to help the unfortunate and the deserving but I do not want to go to work and pay taxes so some lazy, opportunistic bum doesn't have to. The current system has a lot of room to accommodate the opportunistic, lazy bums.  Make it local. We all want communities, after all, don't we? Let's have communities of obligations and responsibilities as well a communities of rights. Two way. Not a lot to ask.

Better to have the lazy, drugged up bum sleeping all day, rather than having them shoot kids or rob stores.

freediver wrote on Jan 4^th, 2020 at 10:30pm:

0ktema wrote on Jan 4th, 2020 at 8:22pm: freediver wrote on Jan 4th, 2020 at 7:33pm: 0ktema wrote on Jan 4th, 2020 at 3:35pm: freediver wrote on Jan 4th, 2020 at 2:31pm: 0ktema wrote on Jan 4th, 2020 at 1:32pm: freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive. Beyond it's crap, I'm not completely clear on what your intending to say here. Knowing who the "they" is that your referring to would help. Whoever is making the argument. OK. Now from what I can make out, your saying that consumers are the wrong target group to focus on for boosting the economy? And anyone who purposefully doesn't include something about the alternative of using interest rates as a lever, are being deceptive in their argument, and it's not fair to focus on merely one area or group. Is that anywhere near what your saying? Honestly, that post of yours is hard work to make sense of! I'm saying that half the time, Keynsianism says that boosting the economy this way is a bad thing. Suggesting that this is a good Keynesian lever also carries the apparently hidden suggestion that starving these people is a good way to reel in the economy when Keyensianism dictates that it needs to be reeled in. But they left that bit out. That's what the "wrong target group" thing is about. Better to choke off the supply of home loans and business loans than choke off the supply of food to unemployed people. After all, they typically end up eating anyway.

Keynesian economics state that the government has to intervene in order to increase consumer spending to drive demand for goods and services. Providing low-income earners with more disposable income would achieve this goal. It seeks to create a 'trickle-up' economy.

Auggie wrote on Jan 5^th, 2020 at 11:39am:

Keynesian economics state that the government has to intervene in order to increase consumer spending to drive demand for goods and services. Providing low-income earners with more disposable income would achieve this goal. It seeks to create a 'trickle-up' economy.

And who is going to earn/produce that extra money?

Auggie wrote on Jan 5^th, 2020 at 11:39am:

freediver wrote on Jan 4th, 2020 at 10:30pm: 0ktema wrote on Jan 4th, 2020 at 8:22pm: freediver wrote on Jan 4th, 2020 at 7:33pm: 0ktema wrote on Jan 4th, 2020 at 3:35pm: freediver wrote on Jan 4th, 2020 at 2:31pm: 0ktema wrote on Jan 4th, 2020 at 1:32pm: freediver wrote on Jan 4th, 2020 at 1:07pm: Auggie wrote on Jan 4th, 2020 at 1:04pm: freediver wrote on Jan 4th, 2020 at 12:10pm: So the whole basis of the "economic case" is that Australians as a whole would save and invest less, instead giving money to people who will spend everything they get? It's basic Keynesian economics. The way to grow the economy is to increase the demand-side of economics among the low-income and middle-income earners. Money put into savings and investment doesn't increase demand for goods and services in same way as giving money to low-income and middle-income earners does. Your view of economics seems to be supply-side economics, which has been debunked since Reagan and Thatcher tried to implement it decades ago and failed spectacularly. I haven't told you what my view is. I just spent two pages trying to figure out what this "argument" is. So now that the economic "argument" seems pretty well laid out, what do you make of it's merit?  It's crap. Someone mentioned Keynesian economics, but that proposes artificially reducing consumer spending just as often as artificially increasing it, and is the wrong target group anyway. It would hardly be "fair" to raise and lower welfare rather than say, interest rates, to try to control economic cycles. If they deliberately left that bit out of the argument, then it is deceptive. Beyond it's crap, I'm not completely clear on what your intending to say here. Knowing who the "they" is that your referring to would help. Whoever is making the argument. OK. Now from what I can make out, your saying that consumers are the wrong target group to focus on for boosting the economy? And anyone who purposefully doesn't include something about the alternative of using interest rates as a lever, are being deceptive in their argument, and it's not fair to focus on merely one area or group. Is that anywhere near what your saying? Honestly, that post of yours is hard work to make sense of! I'm saying that half the time, Keynsianism says that boosting the economy this way is a bad thing. Suggesting that this is a good Keynesian lever also carries the apparently hidden suggestion that starving these people is a good way to reel in the economy when Keyensianism dictates that it needs to be reeled in. But they left that bit out. That's what the "wrong target group" thing is about. Better to choke off the supply of home loans and business loans than choke off the supply of food to unemployed people. After all, they typically end up eating anyway. Keynesian economics state that the government has to intervene in order to increase consumer spending to drive demand for goods and services. Providing low-income earners with more disposable income would achieve this goal. It seeks to create a 'trickle-up' economy.

No it doesn't.

Frank wrote on Jan 4^th, 2020 at 9:58pm:

I am for taking as much out of the remote government's hands as possible and putting them into the hands of people on the ground = local governments. People would be much more involved if they had a stake in the way their money and goodwill is spent. Dole, age care, disability pension, looking after the elderly, etc. We live our lives with other people. Governments tend to rob us of community.  Local people making local decisions. Not hard.

like most thing frank on paper it always looks good....

what about us ratepayers.....whos rates go up year after year.. yet with no reward  unless you call taking away the garbage reward....we pay for other peoples kerb and guttering  and even footpaths and roads.....why am I responsible every year for people I will never meet????>>.... why cant they pay with their own rates???  oh wait I forgot about our great big new prison...which is so full I think we are on our third extension.... guess whos keeping all those??????...

I think that might be enough for me frank...

Frank wrote on Jan 5^th, 2020 at 12:14pm:

Auggie wrote on Jan 5th, 2020 at 11:39am: Keynesian economics state that the government has to intervene in order to increase consumer spending to drive demand for goods and services. Providing low-income earners with more disposable income would achieve this goal. It seeks to create a 'trickle-up' economy. And who is going to earn/produce that extra money?

It is done by wealth redistribution in the form of means-tested stipend.