Moon, for those of us that experienced "the recession we had to have", I am sure we all remember what it felt like. I was in business for myself back then too and it hurt like hell having to sell off assets just to stay afloat. I was subbying and often missed being paid because my employer hadn't been paid. I was paying 18% interest on my housing loan and paying similar on my business loans.
Business confidence hit rock bottom in the late 80's, employees were laid off as demand slowed. Unemployment grew quickly and people lost their homes and their businesses almost overnight. Remembering the facts tell us that the majority of people are only 90 days from bankrupt.
"The recession we had to have" was all Keating could say at the time trying to excuse his inept management of the economy, and to make out Australia had to shrink as it had grown too quickly for too long.
Of course what added to our woes in the late 80's was the fact that Keating had also recently introduced the Fringe Benefits Tax that threw an awful lot of people out of work as demand for many services slowed. Restaurants and food outlets closed in droves as Diners just disappeared.
Fortunately back then the RBA had rates in the high teens and there was plenty of room to reduce interest rates to try and stimulate consumer spending.
Today it is very different, there is a massive and growing Federal debt siphoning off billions in interest payments, the RBA has no where to go as rates are at rock bottom now and Banks are not going to reduce their rates now, only increase them. Housing construction is falling as are prices putting additional pressure on consumers.
It is going to be a very hard landing...many will not know what has hit them I can see that a mile away just through some of the naive comments written here.
A recession is something that effects everybody though often in different ways, lol...except the Public Servants of course being paid by the taxpayer and 100% secure in their jobs under a Labor Government.
Feel sad for those mature age workers that have already lost their job, they may as well look forward to an early permanent retirement...
