Luma

I'm starting to wonder if this budget is going to trigger a recession.
We are already on the slippery slope down anyway but I wonder if all the cut backs and layoffs is going to backfire on the government and acutally make things worse than better for the country.

Jon77

In my opinion the lessons from the global financial crisis in 2008 have not been learned by governments, banks or the general public.

I can remember the recession that hit the NE of England where I grew up in the late 70's to mid 80's. 90% unemployment in many areas and whole streets of houses boarded up, that used to be our play ground. We used to get in these empty houses and play and we also used to get in the empty factories and mess around.

I was fortunate in the GFC in that I didn't get made redundant and didn't struggle as many did. But even so I looked around and sure some shops were going under and being boarded up but in the main people were still spending and getting on with life and was nothing like I experienced growing up.

I find the amount of debt people have these days very worrying. We are told to go out and spend our savings by the government as this will help out the country. **** that, I am saving like a bastard and always will.

This budget won't trigger a recession, outside influence such as a further slow down in China will do that for us. And I suspect interest rates will go up for the first time in ages at some point in 2015. People say 'well I remember a time when interest rates were 15%' but with so much debt as the moment it wont take sky high interest rates for people to really feel the pinch, something between 4% - 6% will be sufficient.

I am not one of these doom forecasters who always bang on about housing bubbles and so on. Just a person who has seen it all before and knows what can come around in cycles.

Amazulu

Yawn

Let's scrap all the cuts and keep on spending

Beaverstate

Its not real money anyway, at least not in Europe or the US.

The Bloke

Eventually, we have to have one!

"In the United States, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[5] Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession's onset and end."


http://en.wikipedia.org/wiki/Recession

RBA February outlook does not look promising. Inflation is expected to be around 3% in June (1/2% more than forecast last November).

"The fiscal consolidation foreshadowed by state and federal governments implies the weakest period of growth in public demand for at least 50 years."

"With governments at both the federal and state levels planning to undertake fiscal consolidation over the next few years, the outlook for growth in public demand remains very weak relative to its historical average. Consistent with budget projections, the contribution to GDP growth from public demand over the forecast period is expected to be around half of its long-term average.

Surveys of firms' investment intentions continue to suggest that non-mining investment is likely to remain subdued over the next year. Further out, non-mining business investment is expected to recover, given the low level of interest rates, an improved competitive position, limited growth of the non-mining capital stock in recent years, and a pick-up in other parts of the economy, such as the housing sector."

http://www.rba.gov.au/publications/s...o-outlook.html

ozzieeagle

I dont know about recession, but take away support from young people and you are definitely headed for this.

7-10 years and we'll have the same social division.

I think it's worth fighting against, Abbot and Hockey the greatest enemies and threat against the Australian people since 1939



Luckily it wont happen, the fight against is already happening... Even right wingers like Clive Palmer realise it's wrong.

Beoz

Did you hear this somewhere?

Luma

It came up in conversation the other day.

Beoz

Did it occur to you that the budget might be an attempt to halt the slippery slope?

Amazulu

There is only one definition of a recession: 2 quarters of negative growth. This is the case in the US, UK and Australia and most other western countries

Everything else is opinion - and basically worthless

Amazulu

Some people just want the welfare/spending tap to stay on full blast - as we are probably going to find out at the next election

The Bloke

Several months or 2 quarters....not much of a difference as most developed nations (inc Australia) defer to the United States National Bureau of Economic Research (NBER) definition anyway.....different words, same meaning.

Yes, a forecast maybe an opinion, but then so is everything on this thread and forum.....

Beoz

Yep I think so. I doubt we'll find anyone willing to ever admit it though.

paulry

What is so difficult for people to understand about the concept of continually spending more money than is coming in?

Amazulu

For people on the welfare gravy train it's very hard to understand

You saw it on Q&A last Monday - a whiny socialist Western Sydney crowd. 'Why me' they cried