There is a cost to the future economy of avoiding recessions - some economists view recessions as a kind of economic "spring cleaning" where inefficient entreprises are slimmed down or closed down and economic reorganisation takes place. The absence of any economic downturn will make Australia's economy more sclerotic in the longer term.

Little wonder that the author of this load of obfuscatory crap has entered politics - his training in the Dismal Science of economics and the arcane 'science' of The Law make him emminently suitable representative of the treacherous L-A-B-O-R Party!

The recent global boom and bust cycle has shaken policy makers to tweek some international financial regulations.

These have been baby steps in the right direction. Powerful financial institutions and the corporations that were saved by taxpayers in 2009 have succeeded in resisting substantive reform that could reduce the impact of the next economic cycle.

Their behaviour in activities regarded as 'high risk moral hazards' by main street on-lookers, but as legitimate and lucrative trading in financial services by the big players, are on-track to repeat past mistakes.

Those 'too big to fail' will undoubtedly have their hands out once again for anticipated tax payer bail out funds when the next super bust cycle hits the world's economies in unison.

However, next time round the bail out may not be forthcoming for a variety of reasons, not least of which is the extreme disdain by main street and the lack of capacity of central banks to responsibly finance massive rescue packages to reckless corporate high-flyers.

Regrettably there has been a dearth of co-ordinated international planning for the force 5 hurricane that is in the making. In this circumstance demand for our prized minerals will collapse and we will become collateral damage.

I would have though some open mindedness will show that the stimulas did work. You must also realise why as other countries pour stacks of cash into their economies without the success we had.
It all begins with the tighter baking regulations we have in this country, they saved us from having to bail out our banks which allowed us to stimulate the domestic economy through retail and building keeping the employment levels in check through the darkest days.
This was only allowable because we came from such an incredibly strong starting position that we do have the previous government to thank for. But without question the anchor man to the success was the mining industry and the Chinese economy. Many things fell into place for us to get out of it so lightly.
The questions now have changed. Can Labor atone for the administrative blunders that left all their good efforts during the GFC looking lame and disorganised. They are struggling to recover from the organisational blunders and the financial mistakes created by state administration but should have been noticed and dealt with by the relative ministers. Most importantly can they stay the course back to surplus and then maintain the direction so the debt can be paid off quickly (5-7 years) before China has an economic crisis that will seriously slow our economy

On what basis do people decide whether Australia did relatively well during the GFC *because of*, or *despite* stimulus policies?

A recession is a period of negative economic growth. So if stimulus policies made us better off than we would otherwise have been, that's the same thing as saying they made us richer.

If it's true, this is wonderful news - but why only do it during recessions? Why doesn't the government keep up these wonderful redistributions until none of us has to work any more?

Jefferson,
As i pointed out, using the experience of other developed countries we have been very fortunate due to a group of circumstances going our way. The cash the government injected to the general population and infrastructure would not have had the success it did without many other matters going well for the country. The cash propped up jobs short term it also helped maintain retail sector confidence. Another big factor that i didn't mention was that many employers took the option of putting staff on part time positions rather than letting them go. This also held back the unemployment tide it also ment that as things recovered or never got quite as bad as they said it was quick to reinstate these workers.
The government never made us richer, quite the opposite. It's a smoke and mirrors trick. You take your savings go to the bank and get a loan on future income then spend it, they filled a gap. It is a gamble of course as you are betting things will go well now and you can repay the debt without it hurting.