The fault lines of the Rudd stimulus package(s)

Globalisation has both benefits and detractions especially when economies morph from diversification to import reliance.

The global crisis will have a quantitative beneficial effect on greenhouse gas emissions and overall pollution, and provide a unique opportunity to monitor global warming and global dimming.

Green industries will provide some opportunity, but when considering the job skills and the sheer numbers involved in the strategic industries, one must be realistic, but not dismissive.

The bottom line

Indications suggest that this global recession will not be short and likely to continue into 2011.

Can focus on consumer spending strategies be more realistic and take into account the potential need for future financial support?

That knee jerk pork barrel $10.4 billion "initiative" would still be available to make a sizeable contribution to reducing the looming $240 billion deficit. That will be one big debt and has the potential to rapidly increase if the stimulus fails to meet Rudd's target.

While Turnbull trumpets that future generations will have to pay for the deficit, those in their 30s and 40s right now, and saving for retirement in 20 to 30 years, should pay very close attention.

Back to where it all started

Beyond the economic theorists' horizon, the Gramm-Leach-Bliley Act of 1999 opened the door to the 2008 global crisis. It was however, the Hank Paulson led "2004 Decision" that opened the lid of Pandora's Box and eliminated the "Net Asset Rule".

These events coincided with an emerging China desperately seeking massive foreign investment and markets for its rapidly growing manufacturing capacity, plus the new economic model of globalisation that created the foundation for the September 2008 global crisis.

China's record economic growth was due not to natural demand growth and sound economic planning, but to an era of reckless lending to support global consumer spending and stock market speculation.

The steel produced from the iron ore exported to China to produce export consumer goods was a small percentage to that used in infrastructure, industrial development, and construction.

Australia needs to look closer at China's hidden debt.