Random Musings: On debt and stimulus

Have just started reading Big Debt Crises by Ray Dalio two days ago. For those who aren't aware, it is a 480 page tome, (๑･▱･๑) which will take at least a number of weeks to smash through, let alone digest the insights, but reading the first part of the book gave me some time to ponder the debt crisis that I had lived through, specifically the GFC which Australia emerged out of relatively unscathed.



It was on this point that I was having a discussion with my colleague Mr A today, who remarked that when Labor passed the stimulus package of February 2009 which famously handed out $950 per person was widely criticized by the liberal party but 10 years on in the face of another potential recession, the Morrison Government passed their tax cuts which essentially did the same thing. It is however noteworthy to highlight the differences, in the two situations though. Back in 09, the world was thrust into a financial crisis of significant magnitude whereas we appear to be currently facing a slow burnout. Secondly, the stimulus package from 09 also ensured that those who were most likely to spend the money immediately (i.e. those on welfare or aren't working) had received the payment, whereas the Morrison Tax Offset only comes into play for taxpayers on $37,000 and above. There is no wonder why the tax break didn't bring the intended effects to consumer spending.

With that in mind, I have to give credit where credit is due, and although I have definite disagreements with Wayne Swan on his morals and ethics pertaining to the subsequent leadership debacle(s), one cannot deny that he was a brilliant treasurer who navigated the country out of a precarious debt situation.

I can only hope that when the next crisis does come, I will be educated enough to navigate a safe path for myself and those around me. Until then, I will keep reading. (๑•́ ω •̀๑)

By 小福