Well then...it looks like it's time for the Liberal party to make way for a Labor government so they can blame them for the global economic downturn.

"IR and tax reform are the two big reforms that could help Australia to maintain its "miracle economy" status through the virtually inevitable global economic downturn."

Did anyone else find this comment as scarey as I did?. In other words, those who can least afford it will now take the blow of an economic downturn while the rich will be too busy on their yachts, snorting cocaine off the butt-cracks of Moroccan boys to even notice it.

Unhelpful and otiose article I thought, by a writer whom, as a previous contributor has pointed out, is unwilling to reveal his, her or its identity.

Sooner or later there is always going to be another downturn.

There is no agreement amongst economists as to when, and there is no way of knowing.

Thornton's concluding remarks have little or nothing to do with it: "That is the big economic issue we face, and to maximise our chances of coping in good shape we need to become far more competitive than we are at present. The current IR reforms are, I believe, biting far harder than currently discussed and this will be helpful."

Australia's metropolitan housing price bubble, abysmal rate of domestic saving and ruinous international trade balance are of rather more significance. Iceland and New Zealand are suffering similar problems.

There again, the US metropolitan housing price bubble, abysmal rate of domestic saving, marginally less ruinous international trade balance and yawning federal government deficit may turn out to be more important.

To paraphrase what Rick Blaine (Humphrey Bogart) said in "Casablanca", "It doesn't take much to see that the problems of three tiny nations don't amount to a hill of beans in this crazy world. Someday, you'll understand that. Now, now... here's looking at you kid."

The real question is whether Reserve Bank Governor Ian Macfarlane will tomorrow allow that toast to be drunk.

Or will he perform the traditional central banker's job of taking away the punch bowl just as the party gets going - by raising interest rates again?

Yes domestic saving sucks. Yes supply side economics rules.
Go and look at M3 on the RBA website, and you can actually see where inflation comes from.
M3 has been blasting along at 10% year on year between 2001 and 2004, and has now gradually moderated (?) to 7%.
Meanwhile the ABS tells us that the CPI is only moving along at 2 - 3%. And GDP is only "growing" at 2.7% (the GDP figure is not inflation adjusted). So if the economy grew 2.7%, why did we need to increase money supply by 7%, and where has it gone ? Cheap money fuels poor investment decisions, creating imbalances in the economy (negative impact on savings). We and USA have similar inflation (judged by M3 - the real inflation). Perhaps RBA is trying to maintain exchange rate ?

KAEP, I am stimulated by your comments.

I agree, the whole thing is energy dependent - and our physical economy depends upon oil energy - the nearest thing we ever had to something for nothing. Quite irreplaceable in terms of the lifestyle we now lead.

Having lived in a monetary economy for my whole life, it is hard to see around, through and beyond it - like trying to imagine an existence outside of my body (metaphorically).

Money is just a way of organising the human world, but I think we have turned economics into some sort of mystical cult, because it no longer reflects the laws of natural abundance. Money creates dreams, but only useful energy (say, oil energy) can fulfil those dreams. No-one dares to talk about this publicly, because the money-dream will collapse if the sleeper wakes.

Even an alternative backup currency will not suffice to solve the problem. No, not gold nor silver.

I suspect that the whole problem stems from our natural human desire to have a store of "value" that is redeemable over time. Of course, there is no such thing in nature. In other words, money, gold, silver (as tradeable value) is simply a reflection of our collective insecurity - our primitive paranoia. Other than their practical applications, "precious" substances have no value whatsoever. Only our dreaming makes it so.

I sometimes reflect upon the Easter Islanders, who seem to have been so blinded by their cult, that they cut the legs out from under their children's future. In a like manner, we invented cling-wrap and plasma screens - but have we had one original idea - really?

If it were not so serious, it would be 'Hilarious'.

DOWNTURN ? you betcha, but it may happen in the USA quicker than we realize.
WHY/HOW ? simple. ILLEGAL IMMIGRATION. Sound like an 'axe' of mind about to be sharpened ? yep...spot on.

POLITICAL IMPACT. Consider this. 12 million illegals.
First, they are 'there' because of the addiction by capitalist pig dogs for 'cheap labor'. Suddenly the 'cheap labor' is biting them in their bums. CHOMP !
-We demand 'immigrant rights' (while waving Mexican flags)
-Today we march, TOMMORROW WE VOTE!

How much political impact will 12 million PRE-DISPOSED DEMOCRAT voters have on the USA political balance ? (if they are legalized)

How much impact would this have on their CHEAP LABOR ? Once they are legal, greedy pig dogs cannot hold over them the threat of deportation when they grumble about 'low wages'.

If Democrats were 'enshrined' on the political stage of USA, they might be weak on Iran, which could see Iran gaining Thermo Nuclear capability,(along with their 'colorful' theological leanings to the Islamic Marhdi emerging from an unmeasurable conflagration of destruction.)

World OIL is 'turned off', and economic disaster ensues for the West.

Some might say its a long string to stretch over a bow, but seeing a connection between illegal immigration, and economic disaster via political re-shaping is not entirely without credibility.

WHICH OF COURSE...effects us.

So, a downturn ? maybe, who's fault ? "greed's" fault.

Solution ? None from this world.

What most of us fail to comprehend, is that our current 'peace' is really a short parenthesis in a long essay of war.

Dave………Sometimes I wonder. Your conclusion to the impending mayhem is greed. Part of human nature I am sure. “We’ll all be doomed”. Yes. And also that is part of life. It all ends with death and destruction, just be glad. It f…n ends.