...] attempted to disabuse Bolt of this notion last month, but apparently was [...

By what mechanism do you believe that the stimulus package(s) will “…be extremely costly, possibly disastrous in the medium term.”? Are you referring to further inflating asset values that are already in a bubble?

http://www.nytimes.com/2009/02/06/business/06shops.html?hp

[a small ephemeral spike in retail spending. Wow! ] I would imagine the people who didn’t lose their job were quite happy with that ’small’ spike and any future spike.

Let the market sort it out then.
Step one – save no jobs. Close eyes, turn backs. Remove staff from Centrelink
Step two – give tax breaks to the wealthy.
Step three – watch asset prices fall, small business go down.
Step four – wait two years then shout for joy as said tax cuts create a job.
Step five – complain about deficit caused by record unemployment costs
Step six – use Ouija Board to contact

http://cepa.newschool.edu/het/profiles/image/keynes.gif

• it does very little for employment,
• at best it will give the economy a short term kick at the risk of long term prosperity,
• it doesn’t give enough bang for the buck,
• it doesn’t do anything to install confidence, (in fact it seems Rudd is obsessed with talking the economy down, the opposition should take him on big time on this. I am sure Rudd’s motive is to talk it down as much as possible then become the big hero when it all gets better and in the mean time he is causing a disaster)
• the cash hand outs are great but there no good if you don’t have a job, (the threat of getting retrenched or the fear created when someone you know gets retrenched is a lot more important to people then a few hundred dollars)
• the home insulation package is a great initiative but will be a disaster. It will take years to roll out as there are not enough installers to install insulation in every one’s house in any reasonable time to have any significant effect on the economy but worst of all will result in a lot of sharks getting into the business. The package needs to be done in stages to result in a successful roll out. Perhaps it should be means tested in the first roll out to limit the take up all at once. (The Liberals when in government experienced the same problem with implementation when they introduce the gas conversion for cars, there were people who wanted to take the offer up but couldn’t get it done)

To date, most of the Rudd government stimulus has been focus on consumer retail spending which will not create many jobs. If retail sales go up for a short period due to money stimulus, at the best it may put off staff redundancies for a few months but more likely the retailers will only seek greater productivity out of its employees for that short period of time knowing too well the stimulus will only be short lived.

The greatest concern for people of today is not passing a deficit on to the next generation but how a reckless spending spree could affect their lives today and tomorrow.

• The greatness of the spending could put in great jeopardy the extent of interest rate cuts and the duration of those cuts by the RBA affecting every Australian who has a mortgage.
• Australia is in a very unique position with a very low base of unemployment, no government debt and plenty of room to move with interest rate cuts. It should be pointed out that interest rate cuts in Australia has a bigger stimulus affect then almost any other country. Most of our mortgages are variable or short term fixed which means that as interest rates go down most mortgages go down too, causing an immediate stimulus to the economy. Not many other countries are in this position due to the fact that most of their mortgages are fixed long term, therefore there is a limit to the stimulus affect occurring from lowing of interest rates in those countries.

Any stimulus package should be spent where it can be leveraged to get the best bang for the buck and create jobs and job security e.g.
• funding packages and tax breaks for investment would motivate companies to invest their own monies. There are many companies which have shelved shovel ready projects which could commence quickly with the right government incentives. History has proven that trying to kick start government projects quickly is almost a impossibility therefore the reliance and incentive has to be for and on the private sector.
• bringing forward tax deductions for middle to low income earners would increase the spending power of consumers on a continue basis and for some would give them that extra buffer they need to survive or even enter into a house purchase.

To compare Australia’s economy to what is happening over seas is just a great over statement and to say this is a national economic disaster in Australia is just so far from the truth. The statement in it self will cause Australia to go into recession and the Rudd Government should be held accountable for this.

The trend estimate is an ABS produced figure. It’s a 13 term HMA (Henderson moving average) based on the seasonally adjusted data – where the seasonally adjusted data is itself an ARIMA regression model output of the original series. The HMA trend is a little different to an orthodox HMA as it’s got a bit of tailored asymmetrical weighting applied to the most recent observations.

In plainer english (!!) it’s a smoothed version of the seasonally adjusted series that allows for a small amount of variation to occur without interfering with any larger ongoing trend in retail turnover that may be evident.

But the variation this month in the seasonally adjusted series was so big that the trend would have done things that trend estimates shouldnt do – so it was left out and will be revised as further data comes in over the coming months.