Public Debt by Country

http://www.gfmag.com/tools/global-d...394-public-debt-by-country.html#axzz1NBSGoIrK

Some interesting graphs.

Australia comes in at one of the lowest.

 

I like the scrolley graph

 

That graph is crap. The US and UK are much much higher than that. Australia's risk is not the public debt it is the private debt that will most likely get taken on by the tax payer when the next crisis hits. You can bet your last ounce the level of mortgages in Australia that are on "freezes" or similar right now to disguise the defaults is skyrocketing, they don't want these true figures publicised while house prices begin the correction. They can't hold on much longer though.

 

That's why the Gillard government are so stupid for carrying on about getting the budget back into surplus in 15 months instead of staying in a relatively small amount of debt and spending some money on helping the economy recover.

 

Don't listen what they say, but take a note what they do.
Labour increased our debt ceiling 400%. The last 50 billon increase came with the budget

 

What worries me is not the Australian government borrowing money but the Big 4 banks borrowing short and lending long. No comments from 2 of them when they had to borrow $4.6billion from the USA Federal Reserve. Are they going to tell their shareholders when they have to pay it back or will they get a free bailout from USA taxpayers.

The Australian sheeple are no better. How much do they owe on credit cards and loans.

Bankers make money moving money around and when we all have our noses in the trough, why do we only get up government and not banks. Who caused the problems in Ireland and Greece?.

Don't let us fall into the trap like other countries and have the taxpayers bail out the bankers.

Regards Errol43

 

When are we going to learn that Keynes was a moron and should have had the same fate as Hitler but before he had a chance to influence people. I hope the above comment was tounge in cheek.

 

surely you can borrow your way to prosperity

 

Not really, a government spending money on infrastructure during a recession is perfectly acceptable and makes sense in the long run if you believe in Keynesian economics. It creates jobs, increases the GDP and reduces unemployment. The problem arises when government spending 'crowds out' private investment and creates inefficiencies or when the government is borrowing at a crazy sum which they have no ability to repay at all (eg. Greece).

Yeah I'm not too worried about the government as of now, they aren't even in heavy debt or borrowing extensively yet. I would be watching them closely over the next few years though. The banks are definitely a more pressing concern, they are financing themselves via foreign currencies relying on the low interest rates and the strong AUD. This is all going to be problematic when the AUD weakens (not if, but when) or countries overseas raise their interest rates and the banks scramble for ways to repay their overseas debts.

The sheeple here are very bad with many people paying interest on their credit cards and stacking personal loans everywhere. This lifestyle is what brought down the American economy, living on credit beyond their means and refinancing from their overpriced houses to further fuel their binge spending. All of this is propping up the banks for now, but we will see what happens and it ain't going to be pretty.

Greece is inherently corrupt anyway and it's no surprise they're crashing and burning now. It's a good thing people are taking notice of Greece and trying to change their ways but they're not really a good case study for Australia. A better case study would be the Eastern Europe countries like Slovakia and so on (source: http://www.telegraph.co.uk/finance/...-as-Ukraine-Hungary-and-Serbia-call-IMF.html). They lived on credit, bought fancy cars backed by their overpriced assets (houses) and now they're living on the brink of collapse. Not much news and media reports on them which isn't surprising since some random country you've never heard of won't get as many page views as Greece.

Hopefully we won't go down the road of UK, Ireland, Greece etc

 

No, not tongue in cheek, but maybe a little mis-informed ;-)

What I meant was that it seems to me that the government's obsession with putting the budget in surplus quickly during the current economic climate shows that they are a ship without a rudder and a party with no economic management skill or direction. They really don't seem to have a coherent plan for the economy, or any understanding of what is going on around them. Their entire playbook for dealing with economic issues seems to be either to tax things more, or to buy set top boxes and ceiling batts.

 

The Gillard government is trying to put the budget back in surplus just because she wants it in surplus. It isn't for anything economically motivated she is merely doing it for political reasons. Instead of spending money bolstering our education, infrastructure and hospitals she is trying to cut spending to meet a political goal. Basically she's doing the right thing (?) for all the wrong reasons and this is probably what Jonesy was trying to say. We can't say for certain whether cutting back on spending is a good thing but with the floods in QLD and bushfires elsewhere it really poses the question of whether or not she is doing the right thing by cutting back spending.

 

I'm against big government myself and yes there has been a lot of failures by the government to spend money efficiently.

However there is a place and time for government spending during recession, especially when unemployment starts to hit 10%. When people stop spending, when companies freeze hiring, it makes sense for the government to employ some people to keep their skills up to date (prevent decay of labor skills), motivate consumer spending among many others. Equating government spending money = failure is no better than the pro big government types who strongly believe that more government regulations must lead to a better economy.

 

All good in theory but we all know that the governments around the world don't voluntarily reduce taxes. They're evil like that.

I also never said to make government bigger, there are many ways to spend money without making government bigger such as via contracts among many other ways.

Anyway the point I was trying to make is that there is a time and place for government spending, especially during recessions. When you are in a recession, banks don't lend money (credit crunch), people consume less, consumer sentiment is low and many other things as well. It will be hard for small enterprises to start up during recessions as they won't be able to easily obtain credit required, it will be hard to expand since usually during recessions, companies take a hit. The velocity of money drops like a sack of stones and the effect is massive. Having a government stir up the money circulation helps recovery.

You seem to be misreading what I'm implying, I don't like government intervention into free markets whenever possible but sometimes there is a case for such intervention and that's what I'm saying.

 

I could be wrong but that sounds very much like Reaganomics?

 

I guess that's true with the bureacracy and what not.

But what I'm trying to say is that the efficiency is not what matters in a recession. It is the stimulation of the velocity of money.

For every dollar that the incompetent bludgers gain via salary, they will spend some proportion of that money in consumption (such as buying food or drinks from privately run pubs, fast food chains, family restaurants etc) whereas the alternative is that nobody hires the bludger and he/she doesn't have any money to spend to fuel these private enterprises which in turn reduces the income from private enterprises.

It's all one big cycle and very much interlinked, there is a bigger picture than simply watching the government spend money and failing.

The project might fail but they might succeed at distributing money into the economy and pushing for better consumer sentiment.