Make a Difference

Day: May 9, 2009

Stimulus Plans As A Proportion Of GDP

This graphic from GlobeandMail shows the amount of  ‘stimulus’ spending in selected G20 countries in dollars and as a proportion of GDP. I have linked to GlobeandMail, but article content is subscription or pay per view.

Stimulus Spending as a Proportion of GDP

Stimulus Spending as a Proportion of GDP

Australia’s spending is proportionally higher than the US (though not by much), which means the amount of debt incurred for each citizen is higher. Which you would expect to mean a longer recovery.

But in spite of this absurd level of ‘stimulus’ spending, and directionless economic policy by the current Federal government, Australasian Investment Review believes that Australia is better equipped to cope with the global recession than most other advanced nations.

Surely the previous government’s careful economic management and years of surplus budgets wouldn’t have anything to do with that?

Chuck Norris Bites The Frost

And I bet he bites global warming as well. And communism. And terrorists.

Check out these Chuck Norris facts:

There is no ‘ctrl’ button on Chuck Norris’s computer. Chuck Norris is always in control.
Chuck Norris is the reason why Waldo is hiding.
Chuck Norris is so fast, he can run around the world and punch himself in the back of the head.
Chuck Norris can slam a revolving door.

But as well as being the ultra toughest guy in the universe ever, Chuck Norris also has a regular column at Town Hall. And guess what? He can write as well as he can punch stuff.

On Foreign Aid

Know-it-all Sir Bob Geldof is the former front man of the Boomtown Rats, a one hit wonder band from the seventies, and therefore qualifies (in his eyes) as an expert on foreign policy and development. Well, Leonardo De Crapio thinks he’s an expert on the science of global warming, so why not?

Two years ago Sir Bob called Australia ‘one of the meanest countries on the planet’ saying our level of foreign aid was amongst the lowest in the world, as a proportion of GDP.

That would be a moral issue worthy of consideration if there was any evidence that foreign aid, other than emergency aid, did the slightest bit of genuine good. If it could be shown, say, that countries which received development aid actually developed more than those that didn’t.

But as Fredrik Erixon, chief economist with Timbro, a Swedish think tank and book publisher, has shown, development aid to developing nations does not work. The more aid a country receives, the more likely it is to be locked into a cycle of increasing poverty. The graph below (taken from the BBC article linked above) shows that when aid received is high, economic growth is at its lowest. 

Aid to Africa and Growth Inversely Proportional

Aid to Africa and Growth Inversely Proportional

Kenyan economist James Shikawati explains why this is so in an interview with Der Spiegel. In essence, providing free food and clothes undermines any local industry, and encourages corruption and a passive expectation of rescue, which then leads to increasing resentment.

SPEIGEL: The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

SPIEGEL: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa’s problems. If the West were to cancel these payments, normal Africans wouldn’t even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

What works to bring nations out of poverty, as South Korea and Taiwan have demonstrated, is open trade, democratic government, and reward for effort and invention.

For related insights see Hal G.P. Colebatch’s article ‘Giving It Away’ in this month’s Quadrant magazine.

Experts: We Have No Idea If This Could Happen

And it has never happened before. But hey, you know, anything’s possible. So just be scared, OK?

A ‘top flu expert’ is warning of the dangers of a mutant swine/bird flu – one that is as infectious as swine flu (that is, about as infectious as any other flu) and as deadly as bird flu.

Bird flu is pretty deadly – mortality rates of up to 60% in the elderly or those in poor health. But only those already in poor health or with compromised immune systems seem susceptible. And there has never been a recorded case of human to human transmission of bird flu.

But who knows, swine flu and bird flu could get together and end up being a super flu with the worst characteristics of both. It is possible. Just. Viruses change and develop all the time.

But is it so likely that we should be worried about it and spend lots of money on it?  Definitely not. Especially not when the death toll from TB and Malaria are so high, and we could quite easily do something about those right now.

After all, leprosy and TB could get together, or bubonic plague and tooth decay. But we aren’t panicking about them. Yet.

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