The first obvious difference is the size of the packages - the Australian effort is around 3.5% of Australia's GDP, while the US package is almost twice the size in terms of GDP, coming in at 5.7% of US GDP. On the one hand this is surprising given Australia was starting from a Federal budget in surplus while the US Federal deficit is already US$10.7 thousand billion (!). On the other hand, the Australian economy is in much better shape than the US (although we will suffer more from the impact of the global recession on our exports) and still has some fiscal stimulus available. Coupled with the problems the US is facing regarding future social security and medicare funding, I think the size of the US Federal deficit will be a drag on long-term growth (due to the need for higher taxes). Even if the US stimulus package is effective in boosting growth in 2009-10, it may just create worse problems down the track.
In some regards it seems that the global economic crisis was due to western consumers bringing forward too much consumption using personal debt, with low interest rates amplifying a feedback loop of inflated asset prices being used to obtain further borrowing at historically low interest rates. Once the private global credit limit had been reached and consumption dropped in order to repay debt and increase savings rates around the world, governments began trying to boost spending by increasing public debt. At some stage public debt will exceed the borrowing capacity of sovereign states (for example Iceland has already gone 'broke', and it seems as if Russia is also getting close to the point of defaulting on debt repayments), and when both private and public borrowing is constrained, the global economy is likely to suffer many years of minimal growth as debt is slowly unwound. It may not happen for quite a while though - the US dollar has remained relatively strong for the past couple of decades despite a huge and growing debt problem.
The second difference I think is very significant is the "quality" of the two packages. Despite considerable debate about how best to stimulate the economy (public spending vs. tax cuts for example), there appears to be a consensus that such a package should satisfy the "three T's" as much as possible - that it should be timely, targeted and temporary. The US package has been reported as delivering around 54% "3T", while only 12 to 20 cents in the dollar of the US package will be timely, temporary and targeted. The graphs below show when the spending is expected to feed into each economy:
It appears that around 75% of the Australian stimulus will be implemented by June 2010, whereas just over half of the US stimulus will be implemented before the end of 2010. Stimulus spending in 2011 is quite likely to fuel inflation and exacerbate the next boom-bust cycle, rather than fix the current crisis.
Overall, I'd give the Australian package a B+ (points off for political ideology and horse trading that has shaped the spending decisions) and the US package a C-, with quantity being substituted for quality in an effort to make the grade.
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