Post Corona...

[Smurf1976]

I’ll agree with you on that smurf but I will say that is a very Australian way of viewing things. You can build a strong economy with lower tax rates—take Singapore for example.

I'm consciously focusing on the Australian perspective and looking at what's likely to actually happen rather than what I think should or shouldn't happen.

What I'm foreseeing is that no politician will dare even suggest cutting hospital budgets for a very long time and that this whole thing will bring about at least a partial shift in the thinking of the general population.

I also think we'll see a lot of the long running issues finally resolved. Among others I'm seeing manufacturing, protectionism / free trade, welfare payment rates and climate change in that category. If the current situation doesn't prompt a change then nothing will, either way the debate will be brought to an end.

 

[IFocus]

One thing I'll predict is higher rates of taxation overall.

There's a debt to be repaid, there's a society to be rebuilt and most of those who would typically argue against tax and government are unlikely to do so going forward given the sheer number of both individuals and businesses who are now on welfare of some sort.

The question is what gets taxed not whether there's going to be more tax collected.

That re-writes the entire political and economic agenda really.

The politics is fascinating, a Coalition government going completely socialist way beyond Labor who would have thought.

After campaigning for no new taxes the Coalition will need to raise revenue with great big taxes. Cutting expenditure will be unlikely due to the fragility of any recovery and yes the rich and super rich both individuals / corporations will have to cough up......maybe Wealth is power.

As for the Australian and world economy growth and its structure who knows.

Globalisation / neoliberalism drove us to where we were, is that where the future generations want to go again?

Given the amount of capital destruction debt overhang, excess labour, high unemployment and high unemployable, social disruption, damaged psychologies will the peasants ever spend again just for starters.

Don't mention the war.

A lot will be dependant on the period of lock down (no brainer)

I image the other side (as it is now called besides death) would likely to be a very slow grind with a lack of confidence.

Look forward to others to comment their ideas.

 

[Smurf1976]

Globalisation / neoliberalism drove us to where we were, is that where the future generations want to go again?

That's another one for the now or never list.

If the magnitude of this shock does not prompt a change then it'll be clear to anyone who's arguing for change that doing so is pointless. Either way the debate ends, either there's a change or the issue is dead.

Not I'm not saying should or shouldn't, just seeing it as something that will be settled one way or the other in the fallout from this. If those who argue against globalisation can't win the argument now then it would seem unlikely that they'll ever win. Either way the issue ends up settled. This will trigger many things like that I expect.

 

[So_Cynical]

The EU has over 350K confirmed cases, the US 160K so it's a runaway train there, i'm thinking that all or most of the govt COVID19 bonds issued will be bought by
other govts, like a mega currency debt swap meet, i buy your debt and you buy mine and then inflate it away, the world really needs some inflation, it's way overdue.

Maybe they all get together and like collateralize all the debt into low fixed interest multi currency bonds and issue them in lieu of real payment...

Issue bonds instead of tax returns, here cop this.

 

[Smurf1976]

The significance I see in the following is not so much what it says but that it's published in the Age not something anyone would generally accuse of being politically "Right" and and it sure isn't mincing words.

We need to take a long cold look at the world and recognise that the Chinese Communist Party is a strategic threat and that, in a crisis, the United States will look to its own interests first and they might not align with ours.

The pandemic has shown us that when a crisis hits we are alone. So we need to be able to tend to our needs and defend our interests, alone.

Things are about to get more interesting I think and this will have far reaching implications for Australian business and indeed everyone. I've been expecting to see that sort of thing, but not quite so soon and bluntly as this one puts it.

https://www.theage.com.au/national/...ds-to-change-most-of-all-20200331-p54fk3.html

 

[qldfrog]

It could be paid easily. The super wealthy would just need to pay their share of taxes.
Of course they don't want to do that so will use their influence to distract the peasants.

You are all getting carried away.

the beauty of left thinking; so easy...Allende's mindset already
I have not done it again here in Australia but please do:
what about you take the current debt; then all the assets of the Rina, Packer etc still under Australia rules
Then just check if it remotely fits..
PLEASE PLEASE PLEASE not a link of the quartian, just basic numbers from ATO/ABS data

I doubt it is anywhere like enough so where would the "super wealthy" need to start? 80k a year?I am not actually joking
Obviously this will be a one off, Slalin style so next year NDIS cost?
Tell us who you would need to put in camp to get back these trillions of debt we now have in Australia by seizing it from the "Rich"

 

[Knobby22]

Business in Australia is pushing for this.
We in Australia can pay this off as our debt isn't high.

In the USA, debt was rising rapidly before this occurred due to tax cuts at the top end. A study was done which I posted a few years ago, that showed at that time that if the wealthy(earning over 1 million a year) played the same tax rate as the middle class then the debt would be wiped out in 3 years.

Call me left but I along with Buffet think it's ridiculous that he pays less total tax than his secretary without him engaging in tax minimization.

I am a capitalist, I invest in the share market and hate communism or socialism as occurring in France. I am a huge fan of Thatcher and what she did for GBR.

But why should I subsidise the super wealthy? Why can't they pay their share?
As Wayne intimated, we know what they will ask for, a big increase in the GST rate.
I'm not their bunny.

 

[MovingAverage]

we know what they will ask for, a big increase in the GST rate.
I'm not their bunny.

I hate GST, it’s a broad based indiscriminate tax that hurts the poor far more than the wealthy.

 

[qldfrog]

Business in Australia is pushing for this.
We in Australia can pay this off as our debt isn't high.

In the USA, debt was rising rapidly before this occurred due to tax cuts at the top end. A study was done which I posted a few years ago, that showed at that time that if the wealthy(earning over 1 million a year) played the same tax rate as the middle class then the debt would be wiped out in 3 years.

Call me left but I along with Buffet think it's ridiculous that he pays less total tax than his secretary without him engaging in tax minimization.

I am a capitalist, I invest in the share market and hate communism or socialism as occurring in France. I am a huge fan of Thatcher and what she did for GBR.

But why should I subsidise the super wealthy? Why can't they pay their share?
As Wayne intimated, we know what they will ask for, a big increase in the GST rate.
I'm not their bunny.

Fair, we agree with you in the US but we are not in the US, we are already one of the highest taxed nation on earth..not comparing to Zimbabwe etc but among major economies
Yes we will be taxed, and worse they will not tax income but assets too
But even so, here and elsewhere the ONLY way out is with inflation
So low interest rates to avoid bankruptcy and gov bond failure, but inflation to reduce relative weight of debt
For Australia, this is easy: currency devaluation vs yuan/USD
We import everything and sell everything
So crash the AUD et Voila
Easier said than done but that is our answer
Will also boost local re manufacturing etc etc
Note this is also a terrible wealth destroyer and we will need protective regulations otherwise China will buy us out even more.

Why is this Argentine model always popping up..
Model being in no way a role model but a vision on where we will probably land

 

[Knobby22]

Yea, can't see inflation in the near future. The bond rates are low though so we could pay it off if we act sensibly. Not like I've been seeing any signs of a tax cut anyway.

Also I will quote famous investor John Hempton again (look on other thread) in this case regarding the future.
I regard the current course of English speaking democracies (other than New Zealand) as mass murder by the political elite. I think history will regard it that way too.

 

[MovingAverage]

Yea, can't see inflation in the near future.

what do you think will be the catalyst for inflation to take off? After the GFC I was really expecting inflation to take off given governments around the world injected so much more cash into the system. I’m no economist but I am puzzled as to the exact factors required to get inflation to take off, but my layman’s understanding it that lots and lots of cheap money is a key catalyst.

 

[Knobby22]

The cheap money has to get to the people. Wage rises have to occur. Tax cuts have to occur.

 

[Sdajii]

Agreed, we can never repay.

When will people stand up with some conviction and fight

The Australian government seems to expect some Australian civilians to do so, putting military out to patrol the streets today and preparing to issue police with semiautomatic rifles to replace their pistols.

I'm not sure at what point it will become clear enough for most people to see that this is not about the virus and that these actions are going to cause far more death and destruction than the virus itself ever would have.

 

[jbocker]

The Australian government seems to expect some Australian civilians to do so, putting military out to patrol the streets today and preparing to issue police with semiautomatic rifles to replace their pistols.

I'm not sure at what point it will become clear enough for most people to see that this is not about the virus and that these actions are going to cause far more death and destruction than the virus itself ever would have.

Sdajii, I am not sure I follow you?

 

[Sdajii]

Sdajii, I am not sure I follow you?

Destroying the economy, causing millions of people to lose their jobs, businesses, hobbies, relationships, etc, forcing people to stay inside with people and causing a dramatic increase in domestic violence etc (even at the best of times domestic violence involves physical assault and murder, and this will dramatically increase it), massively increased rates of depression due to lack of vocation and socialisation, etc etc etc, is very clearly going to cause far more damage in terms of both death and suffering than the virus ever would, let alone the difference between whatever the virus would have caused and what it will cause with these draconian measures.

To look at the maximum possible benefit, we have to say what was the worst case scenario of the virus itself (generally said to be a 3.4% death rate of those who get infected, and obviously not everyone would get infected). We're not going to reduce the impact to a 0% infection rate or 0% fatality rate, so the damage mitigation of the virus is dramatically lower than that. The vast majority of people who would have been killed by the virus were elderly folks not long for this world anyway. Now, as it is, we're still going to have a percentage of people getting the virus including those elderly people etc. But, we are forcing literally everyone to suffer, most dramatically. Children, teenagers, young adults and every other demographic will be suffering from psychological depression, many from domestic violence, financial distress which will cause long term financial suffering, educational disruption, no doubt some of those elderly and other vulnerable folks have already died due to logistical difficulties, the economic destruction is going to cause hospitals etc to lose funding and become less effective (causing deaths from all causes, not just the virus)...

In short, I was saying over a month ago that the human reaction was going to cause far more harm than the virus, but it is now utterly obviously that the absurd reaction will cause far, far more harm, and despite how obvious that is, we are being expected to anticipate and want draconian rules for an extended period of time.

It's a sad display of human stupidity that most people can't see it already, but my question was: at what point will it be obvious to most people that these measures are causing more harm than good?

By all means, encourage good hygeine etc. We shouldn't be shaking hands, we should cough into our elbow, etc etc, but to destroy the economy and take such crazy action, causing far more death and suffering than it prevents is insane, and we need to be asking why this is happening.

 

[barney]

at what point will it be obvious to most people that these measures are causing more harm than good?

I think a lot of us understand the sentiment behind your suggestion Sdajii …… but, and its a big but ….

The problems associated with not curtailing the rate of spread (had we gone down that path) are exponentially exacerbated by the likely outcomes.

When the virus is out of control, death rates rise to over 10%. (Most likely much higher once the mathematics kick in.

It is generally accepted that if the V was left to its own devices, likely 50% of the population would contract it ….

Australia as a test case: 12 million people would become infected; 1.2 million will die. That in itself is a problem, but when we consider a high % of those dying will likely be medical people who are most at risk, followed by other occupations who have greater contact with people in general, we would then have a massive social problem.

The economic impact is dire but the alternative could escalate into total anarchy …. I really believe Society could fall apart if the measures to slow this down were not taken. We simply cant afford to have half the world sick simultaneously. Cheers.

 

[Sdajii]

I think a lot of us understand the sentiment behind your suggestion Sdajii …… but, and its a big but ….

The problems associated with not curtailing the rate of spread (had we gone down that path) are exponentially exacerbated by the likely outcomes.

When the virus is out of control, death rates rise to over 10%. (Most likely much higher once the mathematics kick in.

It is generally accepted that if the V was left to its own devices, likely 50% of the population would contract it ….

Australia as a test case: 12 million people would become infected; 1.2 million will die. That in itself is a problem, but when we consider a high % of those dying will likely be medical people who are most at risk, followed by other occupations who have greater contact with people in general, we would then have a massive social problem.

The economic impact is dire but the alternative could escalate into total anarchy …. I really believe Society could fall apart if the measures to slow this down were not taken. We simply cant afford to have half the world sick simultaneously. Cheers.

It's difficult to quantify these things, and this being the case we will likely have to disagree without being able to provide anything solid to back ourselves up.

I think it's fair to say that if medical professionals get sick they should get first priority access to medical care. The disease is mostly a problem for the elderly and most medical practitioners are not elderly.

Even if you want to flatten the curve, etc, medical practitioners are going to be constantly exposed to the virus through the entire course of events anyway. Social distancing and isolation etc works for regular people, but the sick ones in bad condition still go to the hospital, exposing medical staff. They are the ones who don't benefit from these measures anyway.

We have how many cases in Australia now? Bugger all, effectively. If we stop all social distancing, the virus will go through the community and run its course and we can get back to normal while living relatively normal lives in the meantime. As it is, social distancing and a shutdown of the economy will need to last indefinitely. It won't completely eliminate the virus, it will just keep it at a very low level. What's the long term plan then? To keep us in isolation without the ability to work, study, socialise, date, have normal hobbies and freedom of movement, for as long as it takes for a medical miracle which provides a silver bullet cure? It makes no sense. Even if it was just a tiny handful of cases in Australia, as soon as we went back to normal it would spread, so, either we go back to normal now or we continually destroy the economy, mental health, etc etc (worse than an unbridled wave of the virus IMO, and I think this will be overwhelmingly clear within a month or two) while merely delaying the inevitable anyway.

Look at the winners and losers of all this and ask yourself if there's a motive the winners may have for engineering this incredibly destructive situation, which really doesn't seem to be providing any benefits.

 

[matty77]

Increasing the tax on the rich (and trying to make the rich poorer) to subsidize the less wealthy people is not the way to go. What you need to do is increase the wealth of the middle class and drag the poor up with the middle class. The super rich can stay super rich, who cares if the middle class and poor are also doing better?

I dont care about how much money or little tax these super rich people pay, what annoys me is the influence these people have over the politics of the country. The other thing that grinds me is companies that manage to push all profit overseas and out of Australia and avoid tax - these companies we need to sort out and make sure they are paying tax into Aus.

The Government is in a hard place at the moment, they have no choice but to run the country like a socialist government for the moment, albeit a temporary measure I am sure is the intention at this stage, but do you honestly think they will be willing to give up the power they have now obtained?

I can see it a mile away... $10k cash transactions already banned, in 12 months time it will be $5k, then in 2 years it will be $1k, then it will be banned completely due to "safety concerns cash spreading virus", electronic transactions only = government and big brother tracking you 24/7. Google, banks, facebook selling your data. I could go on but I will go down a long road......

Is this the start of UBI? The problem with UBI is it gives nobody an incentive to work hard or achieve, the problem with taxing the hell out of the super rich to pay for the poor is it gives no incentive to achieve and be rich in the first place. Also what do you do when the rich run out of money and you have nobody else left to tax?

Sounds like a Bernie Sanders run government to me...

We need to get back to basics in AUS, create or produce something, manufacture something we can sell to other countries, stop letting countries like China buy us out with printed money, stop giving away our dirt in the ground so cheap... but I fear its already too late.

Post Corona - we will ALL be far far worse off long term and we wont even know it.

 

[Smurf1976]

what was the worst case scenario of the virus itself (generally said to be a 3.4% death rate of those who get infected

That is the death rate if hospitals have capacity.

Let it rip uncontrolled, run out of capacity, then it ends up circa 10%. Hence Italy currently at 11.7% and Spain at 8.9%.

Then there's those who live but with lung damage. There doesn't seem to be a figure for that but it won't be zero.

I could be wrong but I do have serious doubts that Australians would accept circa 1 million deaths, and however many more in ongoing poor health for life, even if doing so did bring about whatever benefit in economic or practical terms. It's just too far against Australian culture to accept that.

 

[Smurf1976]

We need to get back to basics in AUS, create or produce something, manufacture something we can sell to other countries, stop letting countries like China buy us out with printed money, stop giving away our dirt in the ground so cheap... but I fear its already too late.

Post Corona - we will ALL be far far worse off long term and we wont even know it.

I personally don't think it's past the point of no return but it's a given that we'll be poorer, the question being whether we've got enough about us to get on with rebuilding a sound economic base.