Kevin's stimulus package it seems will have a very short term effect and have a very long term impact on the tax payer.

Just do the sums.Many people will get $950.00 as a once off payment.There are only 10 million in the work force and 40% of working families don't pay tax because they get it back in benefits.Now since 40% don't pay tax that leaves us only with 60% who do,or 6 million people.Divide 6 million into 42 billion and the cost of $950.00 to 6 million tax payers is $7000.00 plus interest.[It could be as much as $14,000.00 with interest]

Is this a good deal for hard working tax payers?How else could this money be better spent?

Kevin is talking about a $200 billion deficit in a few yrs.For 10 million workers this is a debt of $20,000 per worker plus interest.
Should we trying to solve a debt problem with more debt? Would you drink more to solve your alcohol problem? Funny logic eh?

Just another observation.If Kevin was to give $1000.00 to every Australian ie 21 million,this would be $21 billion in a stimulus package,but no,it will only be paid to people who pay tax.So it should be approx $10 billion.Where has the other $31 billion gone and why has not the opposition picked up on this enormous discreptency? Perhaps this is why Julie Bishop was unceremoniously dropped.

The cash payout is only PART of the overall package, not the whole thing.

I think you'll also find that our national private debt is already very high. It was the former government that moved this debt from public to private and encouraged it to keep growing as part of the overall international economic strategy espoused by Alan Greenspan.

This mess didn't suddenly happen in the last 12 months - it's been coming for years but anyone who spoke out against it was shouted down or gagged.

Solving debt with more debt?

Where is the Bank bail-out money coming from in the US? From the Banks themselves, who create money by creating debt.

That's how the economic system has been working since the 1930's.
The fractional reserve banking system allows Banks to loan ten dollars for every dollar deposited (and that doesn't even have to be cash) but that's grown to thirty dollars.

How much would we pay without it?
If we did not follow America? England? the western world?

A pointer to the true nature of this 'package' has perhaps been given by of all OLO users (should I really say unwittingly?), one of the multifacetted personas of PALE&IF!

Just this morning, in this post (in line 5): http://forum.onlineopinion.com.au/thread.asp?discussion=2509#56898 , PALE&IF coined a new and important piece of economic terminology. That word was 'inflastructure'.

The dogged persistence of PALE&IF in posting whatever and wherever as opportunity has here and there threatened to arise has finally paid off with this contribution to the lexicon of nation-building. How presciently descriptive. Generations of our descendents will be forever grateful for this technical term as they continue to pay off the debt to the heirs of the same-old same-old state/corporate interests as were in large measure the authors of the present debacle.

'Sustainability' in action. 'Recycling' at its best. I think the pro-republic push might finally have got to know what sort of republic Australia would get if they could get their way: it would be a 'Weimar' republic, probably complete with debt-financed imported wheelbarrows for to carry everyone's money around!

"Down with the free market".

"Up with unimaginative unperceiving 'place holders'".

Let us all be truly thankful for the outworking of a century-plus of the complacently-trusted Australian electoral system for giving us all the totality of our public political spectrum.

'Inflastructure'. Something for every Australian, whether they use it or not!

'Inflastructure'. Putting PALE&IF on the ecomic (see line 8 of the above link) credibility map!

Hot keyboards, Arjay, what a topical topic! We should all be so grateful.

The handouts are just one part of the package as someone else pointed out.

Handouts only produce a short term stimulus but the spending on infrastructure will provide some longer term stability in those markets where the extra money is being spent. Most of this appears to be in the building and education sector - insulation/solar for homes and school buildings (labs, libraries etc) and maintenance. This is great news for schools.

Other areas that could do with a boost would be:

manufacturing/investment in renewables
community centres/counselling services
special needs learning
better rail services and public transport
hospital beds and extra medical services (particularly in rural areas)

I have always believed that when the muck hits the fan there is a first thing to do. Turn off the Fan - not turn it up!

After turning off the fan a decision can then be made as to what to do next.
Clean the fan.
Remove the fan.
Replace the fan.
Or even just turn it on again.

What has been achieved is a new credit card has been used to pay for the stimulus.

As for the children paying for the debt incurred. All pensioners and welfare reciepients will pay first as there will be a downward pressure on increases blamed by the stimulus debt. Much the same as the downward pressure placed on workers wages by increasing immigration numbers beyond a sensible level.

Good question on the ESP Belly, "How much would we pay without it?"

Can you pass that question up the line and get an answer? I can't find any costings for the "to spend or not to spend" question.

At least half the Australian population should know what the costs of "no ESP" would be and to be fair, all current and next generation tax payers are entitile to know.

Surely someone did some costings before spending $42bn?

The foreign exchange debt will become unmanageable when and if a
recovery starts. Oil consumption will rise again and the price of oil
with it. We now provide less than half what we use and the annual cost
of imported oil will bankrupt the country, especially if other
exported resources do not rise in price to the same extent.

At last July's price we would have been spending at rhe rate of
$33 billion a year. So you can add that to whatever the interest rate
turns out to be.
BTW, has anyone heard who is going to advance this $200 billion plus ?
I heard that there is a credit drought ?
Perhaps Kevin is going to pray for rain.

Bazz,we get the $200 billion the same way the central banks get it.We manufacture it from cyber space and get the RBA to loan it to the Govt.Since it is a loan that must be repaid,this in the long term will keep inflation in check.The difference being,we can pay a low interest rate and take long time to repay it.The RBA wins and so does the people of Australia.Tell the IMF,world bank and the others to get nicked.They have caused this debacle via the debt trap.

Pelican,

It seems to me also that handing out cash is merely a short term reprieve, solving nothing. However infrastructure spending takes a long time to fully make its way into the economy, often many years.

Whilst less than ideal, cash handouts are far more likely to have an immediate impact on the economy, which seems to be the goal.