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This is very disappointing especially as Rudd has been spruiking that extreme capitalism has to end.

Rudd's stimulus package is not working.  He is ensuring that our country has huge future deficits which our children will have to pay back.

An interesting extract by the economic historian Professor Niall Ferguson of Harvard & Oxford:-

The reality being repressed is that the western world is suffering a crisis of excessive indebtedness. Many governments are too highly leveraged, as are many corporations. More importantly, households are groaning under unprecedented debt burdens. Worst of all are the banks. The best evidence that we are in denial about this is the widespread belief that the crisis can be overcome by creating yet more debt.

There is a better way to go but it is in the opposite direction. The aim must be not to increase debt but to reduce it.

http://www.niallferguson.com/site/FERG/Templates/ArticleItem.aspx?pageid=204

Professor Niall goes on to offer solutions - but this is exactly what Rudd is doing - increasing our debt load.  He is no better than Howard and could end up being far worse.

THERESE Rein must be sick of being used and abused in every conceivable way by the ALP and its allies. She was forced to sell the Australian arm of her business because its use of common law contracts conflicted with the ALP’s union agenda to outlaw flexible agreements. And now she is being held up as a human shield to deflect completely legitimate criticism of her husband’s hypocritical attack on “neo-liberal, let ‘er rip capitalism”.

The same party heavies who were responsible for Rein selling her business to appease union warlords opposed to flexible, non-award contracts have now dragged her into an unrelated debate about her husband’s now notorious essay in The Monthly. Malcolm Turnbull must have hit a soft spot to provoke the feeble “don’t attack Kevin’s wife” defence from the very people who forced her to sacrifice her Australian business on the altar of that sacred union award agenda.

In May 2007 I wrote that a woman who “ought to be the hero of working Australians” had been brought undone, not by a conflict of interest (the government conflicts could have been managed) but by a conflict of policy. Her successful business, which employed workers on common law contracts, became a potent and successful symbol of the flexibility that the ALP rejected.

Once again Rein is being used as a political football by her husband’s mates, blokes such as Stephen Smith and Craig Emerson. Instead of tackling Turnbull’s arguments, the Prime Minister’s bouncer boys resorted to holding up Rein, using her like a head of garlic to ward off the vampires. The Foreign Minister said Turnbull had crossed a line in Australian politics by dragging in the PM’s wife. Emerson described Turnbull’s criticism as a “low act” that pointed to a “bad mark against the character of Malcolm Turnbull”.

In fact, Smith and Emerson were the low acts who scored bad marks. They exposed the extent of their political expediency: using Rein how and when it suits them. If they genuinely believed that spouses should be kept out of the rough and tumble of politics, they would not have used her as a shield to deflect and embarrass Turnbull.

In a sense, they were forced to resort to using Rein because they had no other comeback to Turnbull’s criticism of Rudd. That’s why the Opposition Leader was neither deflected nor embarrassed. There were many grounds on which Turnbull was entitled to (and did) point out in his essay in The Weekend Australian on Saturday that Rudd’s attack on neo-liberalism was deeply hypocritical, not to mention dishonest. He repeated many of the inconsistencies previously made about Rudd’s self-righteous attack on free markets.

And then Turnbull made the standout argument. He said that someone who has personally derived extraordinary material benefits from the Howard government’s policies of government outsourcing was in no position to criticise the morality of those policies, unless he was prepared to forgo the benefits. Rudd cannot both live in the lap of luxury generated by Howard’s policies and simultaneously excoriate those same policies as delivering ill-gotten gains to the greedy, well-to-do neo-liberals.

Let’s repeat—for the sake of clarity—that Rein is a fine role model and that she and her family should enjoy the fruits of her hard labours in business. Just as my family and I enjoy the fruits of my husband’s work as a successful businessman. Rudd is also entitled to enjoy the benefits of the family share portfolio and properties in various locations. But the moment he wants to attack policies that directly propped up his own lifestyle, he (not his wife or children) should give up those benefits.

Remember, too, this is a chap who has no compunction about dishing out the personal abuse. He calls Turnbull the “member for Goldman Sachs” in an effort to paint his political opponent as a greedy rich guy. Yet, at Turnbull’s first suggestion that, as a man in a glass house, Rudd should not be throwing boulders about, he sends in a couple of really courageous attack dogs who hold up a picture of St Therese to protect him.

The man who sold himself as a safe pair of economic hands prior to the 2007 election has now unmasked himself as just another old-fashioned class warrior - when it suits. The Prime Minister’s performance on Channel Seven’s Sunday Night program was the ultimate exercise in spin where he felt the pain of “you good people”—the Pacific Brands workers—and unloaded yet again on the “unrestrained greed” of corporate executives. He even uttered a swear word for effect. Presumably, he thinks this is how you enamour yourself to workers. But it’s all an illusion.

Rudd has more personas than Sybil, the girl with 13 different personalities portrayed by Sally Field in a 1976 film. At business functions, Rudd is the epitome of rationality about the role of business. Among workers, he says the relocation by Pacific Brands “absolutely stinks”. Rudd worked as a senior China consultant with KPMG from 1996 until 1998. Does he honestly expect us to believe that he would have told his KPMG clients not to run more cost effective manufacturing operations in China? Does he now tell the Chinese Government that he doesn’t want Australian firms to run manufacturing operations in China?

There are two tests of political conviction. The first is one of consistency, delivering on promises made and adherence to core beliefs over time. The second test of conviction is courage: whether a politician has held beliefs before they emerged as the orthodoxy or simply jumped on a bandwagon only when it was popular and safe to do so.
So who is the real Rudd? You be the judge.
Rudd was the Labor politician opposed to a broad-based consumption tax who rose in parliament on June 30, 1999, speaking with apparent passion to declare the passing of the GST legislation “a day of fundamental injustice. It will be recorded as the day when the social compact that has governed this nation for the last 100 years was torn up.” In 2006, he wrote about John Howard’s “regressive consumption tax”. Rudd’s heartfelt belief opposing the GST has not been aired since he became Prime Minister. GST keeps all the states afloat.
Rudd was the Opposition leader who described global warming during the last federal election as “the great moral issue of our time”. It was a vote winner. Kyoto was signed with the conviction that climate change was “the defining challenge of our generation”. And then the Rudd shuffle. By last December, the great moral issue was reduced to a meaningless carbon emissions reduction target of 5 per cent by 2020. Rudd ignored the findings of the UN panel he once lauded, which laid down a minimum target of 25 per cent to 40 per cent below 1990 levels by 2020 as necessary to prevent the sort of catastrophic climate change that Rudd once believed in. In October 2006, Rudd wrote his “light on the hill” Labor agenda for Australia was “taking the lead on climate change.” Now, there is no mention of leadership at Copenhagen 2009.
As Opposition leader in October 2007, Rudd committed a Labor government to taking “legal proceedings against President [Mahmoud] Ahmadinejad on a charge of inciting genocide” when the Iranian President spoke about wiping Israel off the map. The tough language of conviction was followed by inaction. Last December the Rudd Government announced it would not pursue legal action.
There was more tough-guy talk about Japan’s annual whaling hunt during the final term of the Howard government. As Opposition leader, Rudd spoke in grave tones about taking Japan to the International Court of Justice or the International Tribunal for the Law of the Sea. That promise has evaporated into the political ether of office.
In addition to dumping promises, Rudd has a knack for discovering beliefs only when they are politically popular. Rudd boarded the responsibility agenda of indigenous politics only after it was politically safe to be on that side of the ideological divide, buffered by black leaders such as Noel Pearson and Warren Mundine. By contrast, John Howard staked out his ground on the dangers of victimhood politics and the need for practical reconciliation long ago, attracting scorn and derision for not kowtowing to the then accepted orthodoxy of symbolism and treaties.
Similarly, as Labor leader, Rudd morphed into an economic conservative when it was electorally popular to carve out those credentials. His language of fiscal prudence wooed voters as he assured us not a “sliver of light” separated Labor and the Coalition on fiscal policy. Now, amid a global financial crisis, when it is fashionable to attack the free market, Rudd’s stripes have changed. Now he is a social democrat who writes tomes about a conspiracy in Australia of neo-liberals who have left the country financially wrecked. As his more astute critics have asked, which social democratic country would Rudd rather govern in place of neo-liberal Australia, where a handy surplus enabled him to turn into a big-spending Keynesian PM?
While he still claims to be an economic conservative, saying so does not make it so. Billions on cash handouts and “social” spending look like Rudd’s down payments on the next election dressed in the slippery language of “stimulus”.
Rudd’s hyperbole serves only to make his undelivered promises and inconsistencies even more pronounced. Strip away the big words and solemn phrases and an empty edifice of unfulfilled promises and shifting opportunism remains. Rudd reminds one of the way 1920s US Democratic Party leader William Gibbs McAdoo described president Warren Harding’s speeches: “an army of pompous phrases moving across the landscape in search of an idea”.
Confidence in a leader comes from knowing who they are and what they believe. Love him or loathe him, Howard was known to friend and foe. His political beliefs remained steady and he pursued them often against the orthodoxy of the time. Pragmatism was, of course, part of Howard’s political make-up. For example, he rejected a GST only to later embrace it as part of much needed tax reform, despite the political risks. But Rudd is an entirely different leader. There is not a single instance of Rudd taking a responsible but unpopular decision. With philosophical principles impossible to pin down, his only consistent and coherent belief is in political power. Every Rudd position has been determined by how to get it and, now, how to keep it.

If we were on such a downward path of stupidity..Keating would have put his hand up by now.

Thats the way he is. He cant help himself. Until then I wont worry.

WHACK. The Rudd Government just got sideswiped - again - by the global financial crisis. This time, the target was its big economic infrastructure plans.

The problem now is there is little private sector money being invested in such projects. That means the $45 billion worth of priority projects about to be identified by Infrastructure Australia will have be drastically curtailed or delayed.

Infrastructure Minister Anthony Albanese says that's not a problem because it was never envisaged that these projects would be delivered within the space of one or two years.

True enough. But Kevin Rudd's rhetoric has not been so nuanced as he has repeatedly talked up the Government's willingness to invest in Australia's productive capacity through infrastructure spending.

That is supposed to start in the May budget.

Unfortunately, even the $8billion remaining in the Building Australia Fund won't go far without private sector financing to back it up. This is not a problem unique to Australia, as governments all around the world struggle with what to do.

At the same time, the states are having increasing and particular difficulty borrowing to fund their existing infrastructure programs. That is largely because of another commonwealth government initiative: the guarantee of retail banks' wholesale bank funding.

This guarantee has allowed Australia's banks to continue borrowing billions of dollars overseas, which has been of vital importance to the economy.

The trouble is that the AAA rating bank debt now looks far more attractive than state government bonds, which are not similarly guaranteed by the commonwealth.

That means the commonwealth will enventually have to extend the guarantee to the states or, far more likely, just end up doing the borrowing itself on behalf of the states.

Most economists believe the Government can still afford to do this, and it will end up creating a much more efficient and centralised process, albeit one that would greatly limit states' independence. But that level of commonwealth commitment also makes it harder for the Government to borrow more for its own infrastructure spending, particularly when it is also financing its ever-expanding budget deficits. The $900 presents going out to households will add $12 billion to that without much long-term "national building" return.

Even various tax breaks to encourage private sector investment would be expensive for a badly stretched budget with no real evidence it would work as planned. Certainly not in the current climate.

One alternative would be for the commonwealth to guarantee some of the infrastructure borrowing for its priority projects - an idea being pushed by the investment banks.

This won't be immediately appealing in Canberra, given the distortion obviously created by the various guarantees and the fact that the private sector would then push all the risk on to the federal Government. It might prefer just to issue billions more in infrastructure bonds itself. Debt? Who's counting?

A MEETING of angry landowners tonight at the Memorial Hall in the country town of Yass outside Canberra will throw the spotlight on another crisis for the beleaguered NSW Labor Government. As with the countless other government initiatives that have antagonised the state's population, this latest crisis is of the Government's making. It involves a now familiar theme: a centralising of bureaucratic control in the name of streamlining costs that has in reality led to higher charges.

It follows the decision to create a body called the Livestock Health and Pest Authority to replace the Rural Lands Protection Board, which was set up years ago to help farmers tackle the rabbit plague and has grown like topsy ever since.

It was argued that the new system, which reduced the number of authorities from 47 to 14, would mean administrative savings of more than $8 million a year, which would be reflected in rate reductions. But within a few months of the new structure being set up on January 1, farmers say they were being told that this was unlikely to eventuate. In fact, in many cases their rates have risen sharply. The problem has been exacerbated by the Government's decision to exempt landowners with properties of less than 10ha from paying LHPA rates. This has cut the state's rateable blocks of land by 5per cent, with the lost revenue being billed to those holding bigger properties.

Having battled drought, bushfires and all forms of pestilence, these landowners are not taking to the new system very well. Tonight's Yass meeting comes as a groundswell builds up across the state to withhold payment of these rates.

NSW parliamentary Speaker Richard Torbay, an independent who holds the seat of Northern Tablelands, says some farmers in the region have been reporting rate increases of between 43 and 120 per cent under the new system.

The Government's claim that the increased cost comes from an insect levy to control locusts has done nothing to quell the mounting discontent across rural NSW, with affected landholders branding it a desperate money-grabbing move by a cash-strapped administration.

There is no better illustration of the Government's failure to anticipate the social and political impact of bureaucratic engineering than its mismanagement of the public hospital system.

This has been driven to the brink of collapse because of Labor's obsession with super-bureaucratised authorities to administer the regional health system, which report directly to Macquarie Street, with little involvement of hospital staff.

This has reached such a calamitous stage that three of NSW's area hospital services are believed to be close to being placed in the hands of administrators.

Meanwhile, the electorate has been told it will have to pay higher electricity charges to underwrite an upgrade of the state's power system, which been allowed to run down to a critical level through a lack of adequate repairs and maintenance.

The rural rates backlash adds to the leadership pressures building up inside the ALP over the performance of Premier Nathan Rees, with his Government now in the second half of its term; the next election is due in March 2011.

As a result, Liberal power brokers are becoming increasingly convinced that there will be another leadership change in the Labor Party - the third since it won office under Bob Carr in 1995 - with Deputy Premier Carmel Tebbutt replacing Rees. One conservative theory is that in a shake-out following Tebbutt's election, former planning minister Frank Sartor will take over the health portfolio, with Health Minister John Della Bosca replacing Eric Roozendaal as treasurer.

Whatever the case, a pre-election change in Labor's front row would put Opposition Leader Barry O'Farrell, who is struggling to gain policy traction despite the Government's pitiful performance, under considerable internal pressure.

The challenge for O'Farrell is not to convince the electorate that the state has a bad government - it is well aware of that - but to demonstrate to the public and his party's number crunchers what he and the conservative Opposition stand for.