Politics The economy is set up to screw young people

[Gethelred]

Except for Tassie the entire country is Labor, time to put the bogey man to bed.

Dude, the entire country's been Labor for 5 minutes, and the media are doing their best to make Peter Dutton palatable.

 

[Leeda]

Children are the life blood of our dichonmy

 

[evolved2]

The problem is the system is not designed for this to work for everyone. If everyone did as you say it would ruin the economy, inflation would skyrocket etc Capitalism is necessarily underpinned by a class system so while individuals may be able to rise up the ladder it is not designed for everyone to be "well off" - there will always be losers. Capitalism is running on the fumes of peoples beliefs that they will be the ones to pull themselves up by their bootstraps but more and more the younger generation are realising it is an exercise in futility.

It's like with the recent interest rate hikes over the last couple of years. Effectively what they are saying is that there has to be a certain level of tension with most peoples ability to pay the bills. Do too well with too much money in the bank? Sorry that causes inflation, we need to redirect that money back towards the banks. We can't have you feeling comfortable, that's not how the system is designed.

It's the same with unemployment. The unemployed will get told they are bludgers and treated like criminals for accessing the welfare safety net but the system needs a certain level of unemployment to work, otherwise wages will spiral. So it's inherent in the system for a certain number of people to be out of work.

Capitalism worked for a while while the middle class was sharing in the spoils for the most part but the upper classes got greedy and just want to pummel the middle class into the ground, treating us all like third world serfs. Now the vast majority of the planets wealth is being hoovered up by those at the very apex of the economy at the expense of the rest of us as well as the planet and any semblance of democracy. It's late stage capitalism and I don't see how it can continue without some severe interventions creating more of a social/democratic society.

I doubt capitalism is the problem for most. Many people with good incomes simply lack the understanding or don't do the right things with their money to get ahead while times are good. Predictable human behaviour keeps the system functioning in a very dysfunctional way, but people make their choices. I feel sympathy towards the poor and those with legitimate reasons why they can't get ahead such as mental illness, but many others have made their own bed.

Yes, the property market is difficult for a number of reasons - that's a real issue. The OP's chart reflects the relative financial position of each age demographic more than victimisation of youth in my opinion - older people have had more disposable income than youth since day dot.

With a cost of living crisis affecting all age groups to some degree, those with less expendable income will be affected more.

The other factor to be considered here is that Australia has been powering along economically for decades with little more than minor blips here and there. We didn't even enter recession during the 2008 financial crisis, and government splashing money around liberally during covid protected people to the point that some were better off being out of work while others had time to renovate their houses in Melbourne.

We've had it good for a long time. Maybe we're simply due for some bad times in the economic cycle.

 

[Seeds]

Well ofcourse. And not just in housing. Tax policy even more so. It's mad. And young people don't even complain about it.

 

[Demonic Ascent]

I doubt capitalism is the problem for most. Many people with good incomes simply lack the understanding or don't do the right things with their money to get ahead while times are good. Predictable human behaviour keeps the system functioning in a very dysfunctional way, but people make their choices. I feel sympathy towards the poor and those with legitimate reasons why they can't get ahead such as mental illness, but many others have made their own bed.

Yes, the property market is difficult for a number of reasons - that's a real issue. The OP's chart reflects the relative financial position of each age demographic more than victimisation of youth in my opinion - older people have had more disposable income than youth since day dot.

With a cost of living crisis affecting all age groups to some degree, those with less expendable income will be affected more.

The other factor to be considered here is that Australia has been powering along economically for decades with little more than minor blips here and there. We didn't even enter recession during the 2008 financial crisis, and government splashing money around liberally during covid protected people to the point that some were better off being out of work while others had time to renovate their houses in Melbourne.

We've had it good for a long time. Maybe we're simply due for some bad times in the economic cycle.

But why should there be bad times?

You say many people simply make poor economic decisions and you are right, eg no-one needs to spend thousands of dollars on a handbag or $100k on a car to get around the suburbs. But the point of my post was that, theoretically, if everyone was completely disciplined with their money in the manner you suggest the system would collapse because it is not designed or cannot withstand widespread wealth/prosperity.

I think it's reaching a failsafe point for lack of a better word, the trajectory cannot continue on its current path without some kind of shock intervention - whether that is done intellectually through a redesign via democratic systems (unlikely due to peoples inherent greed/stupidity) or violently via a crash of the economic system into depression and public revolt (far more likely based on historical precedent) is to be seen. Globalisation and the compounding increases in technology will only quicken this.

Look at globalisation, it is actually impossible for the entire world to be raised to first world living standards - there just aren't enough resources to cope with that demand. So the alternative is to reduce the living standards of the first world to bring them more in line with the majority of humanity.

Look at technology - many jobs will become redundant as AI becomes more intuitive and able to handle more complex ways of processing data. Somewhere along the line the thinking went from technology will make our lives easier to technology will make our lives redundant. Taken to its logical conclusion, if robots/machines can do for example 80% of the jobs out there does that mean 80% unemployment rates? Of course some jobs will still exist just redesigned, but it is likely you will only need one job for every 5/10/50/100 etc etc now especially as technology continues compounding. So where does that leave the mass of people? On the breadline? Or will we start to see a reimagining of society where work/a job is only a means to an end and not an end in itself?

 

[Gethelred]

Well ofcourse. And not just in housing. Tax policy even more so. It's mad. And young people don't even complain about it.

You have to understand something to understand why it's bad...

 

[Leeda]

You have to understand something to understand why it's bad...

You stand alone

 

[james haish]

You say many people simply make poor economic decisions and you are right, eg no-one needs to spend thousands of dollars on a handbag or $100k on a car to get around the suburbs. But the point of my post was that, theoretically, if everyone was completely disciplined with their money in the manner you suggest the system would collapse because it is not designed or cannot withstand widespread wealth/prosperity.

What you’re saying isn’t true. Societies in the not so distant past were much more frugal and didn’t collapse. There’s a parasitical component of our economy that actively destroys wealth by preying on careless people.

I’ll give an example. I know a couple who did nothing but complain about their rent, how hard it was to save a deposit for a house. I agreed with them in principle, but they were complete morons with money. One thing they did was “hire” a Dyson fan from one of those rental joints. The cost per month to hire this fan was more than the cheapest fan you could get at Kmart. Why did they hire a Dyson fan and not buy a cheap fan that did just as good a job but was a bit noisier? Because they wanted a Dyson fan. They did this for so many things it was ridiculous.

Eventually their parents gave them money to buy a house.

 

[Demonic Ascent]

What you’re saying isn’t true. Societies in the not so distant past were much more frugal and didn’t collapse. There’s a parasitical component of our economy that actively destroys wealth by preying on careless people.

I’ll give an example. I know a couple who did nothing but complain about their rent, how hard it was to save a deposit for a house. I agreed with them in principle, but they were complete morons with money. One thing they did was “hire” a Dyson fan from one of those rental joints. The cost per month to hire this fan was more than the cheapest fan you could get at Kmart. Why did they hire a Dyson fan and not buy a cheap fan that did just as good a job but was a bit noisier? Because they wanted a Dyson fan. They did this for so many things it was ridiculous.

Eventually their parents gave them money to buy a house.

On an individual basis you are right. On a holistic basis it doesn't work. How would the economy work if everyone had exactly the same levels of wealth, exactly the same money in the bank, exactly the same value in assets etc? If every renter/potential home buyer simply saved better and had let's say $150-200k in the bank for a home deposit what effect would that have on the housing market?

Edit - potentially it could work if the wealthy at the apex of the economy, the multi-billionaires etc, had their wealth redistributed but even then I think the current system would collapse in on itself through inflation etc

 

[Leeda]

Punctuation hyeah god...nun

What you’re saying isn’t true. Societies in the not so distant past were much more frugal and didn’t collapse. There’s a parasitical component of our economy that actively destroys wealth by preying on careless people.

I’ll give an example. I know a couple who did nothing but complain about their rent, how hard it was to save a deposit for a house. I agreed with them in principle, but they were complete morons with money. One thing they did was “hire” a Dyson fan from one of those rental joints. The cost per month to hire this fan was more than the cheapest fan you could get at Kmart. Why did they hire a Dyson fan and not buy a cheap fan that did just as good a job but was a bit noisier? Because they wanted a Dyson fan. They did this for so many things it was ridiculous.

Eventually their parents gave them money to buy a house.

Dude, the entire country's been Labor for 5 minutes, and the media are doing their best to make Peter Dutton palatable.

Moore..

 

[kickazz]

The easiest way to financial freedom is living within your means and setting aside part of your income to buy appreciating and income producing assets. That to me is the golden goose, and I'll vote against any political party that looks to attack it -

I think this is a more than reasonable take on things - where Australia has got it wrong from a taxation perspective is that with these assets, or capital in general, we don't make proper distinction between wealth creation and rent-seeking. The former is good and should be encouraged, the latter - not so much.

 

[Kram]

The other factor to be considered here is that Australia has been powering along economically for decades with little more than minor blips here and there. We didn't even enter recession during the 2008 financial crisis, and government splashing money around liberally during covid protected people to the point that some were better off being out of work while others had time to renovate their houses in Melbourne.

We've had it good for a long time. Maybe we're simply due for some bad times in the economic cycle.

This.

Even people like us entering middle age only experienced the last real hard times the early 90s recession as little kids.

 

[kickazz]

This.

Even people like us entering middle age only experienced the last real hard times the early 90s recession as little kids.

Yeah, are we better off with the economy having regular, small dips? Just enough to keep us all honest, stop us from borrowing beyond means and all that sort of stuff? Is that better than kicking the can down the road year after year until eventually there is one big POP‽

Problem is, no 3-year term government is ever going to want even a small dip on their watch. Keating owned it the nineties and even won an election after it - I just cannot see that happen in today's narrow, myopic approach to politics.

 

[Leeda]

This.

Even people like us entering middle age only experienced the last real hard times the early 90s recession as little kids.

It is a disgrace...you aught to know better

 

[james haish]

On an individual basis you are right. On a holistic basis it doesn't work. How would the economy work if everyone had exactly the same levels of wealth, exactly the same money in the bank, exactly the same value in assets etc? If every renter/potential home buyer simply saved better and had let's say $150-200k in the bank for a home deposit what effect would that have on the housing market?

Edit - potentially it could work if the wealthy at the apex of the economy, the multi-billionaires etc, had their wealth redistributed but even then I think the current system would collapse in on itself through inflation etc

Ask yourself this, would it be better if people put their money in the high interest savings account or spent a small amount of money gambling on the footy? If everyone did the former the gambling industry would be much smaller, maybe even collapse. But would people collectively be richer or poorer as a result? I think richer

 

[Leeda]

Ask yourself this, would it be better if people put their money in the high interest savings account or spent a small amount of money gambling on the footy? If everyone did the former the gambling industry would be much smaller, maybe even collapse. But would people collectively be richer or poorer as a result? I think richer

The standard of living is quite a lot worse. Than we just mp at sha...excuse..

 

[ShanDog]

Ask yourself this, would it be better if people put their money in the high interest savings account or spent a small amount of money gambling on the footy? If everyone did the former the gambling industry would be much smaller, maybe even collapse. But would people collectively be richer or poorer as a result? I think richer

We've had it so well for so long that going without the relative opulence we're accustomed to feels like we're missing out, or perhaps even for some, like they are living in relative poverty. The basic human instinct to save for the future is largely missing in most people.

 

[Kram]

At least there's still plenty of work around, but if that dries up oh boy.

 

[sdfc]

Yeah, are we better off with the economy having regular, small dips? Just enough to keep us all honest, stop us from borrowing beyond means and all that sort of stuff? Is that better than kicking the can down the road year after year until eventually there is one big POP‽

Problem is, no 3-year term government is ever going to want even a small dip on their watch. Keating owned it the nineties and even won an election after it - I just cannot see that happen in today's narrow, myopic approach to politics.

There's too much household debt to have a garden variety recession. A sharp rise in unemployment would quickly morph into a financial crisis.

 

[Demonic Ascent]

Ask yourself this, would it be better if people put their money in the high interest savings account or spent a small amount of money gambling on the footy? If everyone did the former the gambling industry would be much smaller, maybe even collapse. But would people collectively be richer or poorer as a result? I think richer

I'm not really sure what point you're making here.

 

[james haish]

I'm not really sure what point you're making here.

Enterprises that allow people to engage in vice or flatter people’s vanity aren’t essential to the functioning of an economy.

 

[Demonic Ascent]

Enterprises that allow people to engage in vice or flatter people’s vanity aren’t essential to the functioning of an economy.

Well yeah I got that part, just not sure how it relates to the post you quoted.

 

[Seeds]

The problem is the system is not designed for this to work for everyone. If everyone did as you say it would ruin the economy, inflation would skyrocket etc Capitalism is necessarily underpinned by a class system so while individuals may be able to rise up the ladder it is not designed for everyone to be "well off" - there will always be losers. Capitalism is running on the fumes of peoples beliefs that they will be the ones to pull themselves up by their bootstraps but more and more the younger generation are realising it is an exercise in futility.

It's like with the recent interest rate hikes over the last couple of years. Effectively what they are saying is that there has to be a certain level of tension with most peoples ability to pay the bills. Do too well with too much money in the bank? Sorry that causes inflation, we need to redirect that money back towards the banks. We can't have you feeling comfortable, that's not how the system is designed.

It's the same with unemployment. The unemployed will get told they are bludgers and treated like criminals for accessing the welfare safety net but the system needs a certain level of unemployment to work, otherwise wages will spiral. So it's inherent in the system for a certain number of people to be out of work.

Capitalism worked for a while while the middle class was sharing in the spoils for the most part but the upper classes got greedy and just want to pummel the middle class into the ground, treating us all like third world serfs. Now the vast majority of the planets wealth is being hoovered up by those at the very apex of the economy at the expense of the rest of us as well as the planet and any semblance of democracy. It's late stage capitalism and I don't see how it can continue without some severe interventions creating more of a social/democratic society.

We dont live in a pure capitalist society. We live in a welfare capitalist society and the only problem with it is the ways we re-distribute. Governments extract largely enough but just take from the wrong places and give too much to the wrong places. The government takes too much wealth from workers (wage income being the sole source of wealth for most young people) and not nearly enough non wage wealth (i.e we dont tax assets anywhere near enough). This is the main problem with our system. That and we dont invest enough in public education and health.

 

[Dockerau]

Dude, the entire country's been Labor for 5 minutes, and the media are doing their best to make Peter Dutton palatable.

only takes 5 minutes with the ALP, it was a clown show under Rudd and Gillard. this lot will easily top that

 

[peetoo]

Australians told to monetise the family home to fund retirement

The number of Australians tapping the government’s reverse mortgage-style product to help fund their retirements rose almost 40 per cent in the past year as calls increase for retirees to monetise the A$1.3 trillion (S$1.16 trillion) they have tied up in property. Read more at The Business Times.

www.businesstimes.com.sg

I’m close to retirement. If I live 10-15 years longer -it’s often more and more than that - if the $2.5 million current main residence property might conservatively be $6 million then 20% of that $1.2 million available equity easily beats downsizing now and attempting to keep up with investments.
And as I ‘only’ had 10% super for 20 years the super pot isn’t what it could be. This generational media war always forgets many boomers super is really not what is adequate. Boomers will have to manage the super-property-life expectancy going forward