HEY SCOTTY, COUNT YOUR CHICKENS
... and then stick your head in the sand
Four-time Walkley Award winning political commentator and Churchill Fellow, has returned to the fray over concern that the integrity of news dissemination is continually being threatened by a partisan media.
I’m not an economist but neither I nor Morrison need to be, not even as Treasurers. I and my nine year-old daughter see things in simple terms, like this: Almost every nation on Earth owes another nation (or nations) a lot of money... some more than others.
Those nations without debt are very few, mainly small, and energy self-sufficient. So let’s remember that they didn’t borrow while interest rates were close to zero... that seems almost irresponsible.
So, if you were holding a party for 100 people and each person owed another person $20, that debt problem could be resolved quite easily by simply allowing the status quo to remain ... and that is exactly what Australia, as one of your partygoers, has decided it wants. I mean, after all, none of the other partygoers is demanding their $20 back, so why not just get pissed, chase sheilas and enjoy the wild party.
And that’s all okay as long as some broke partygoer doesn’t want to shoot out to buy more alcohol or drugs.
They gave GFC culprits, Fannie Mae and Freddie Mac, a clean bill of health
Sober rating agencies are in deck chairs watching to ensure things don’t get out of balance by over-borrowing. If they do get out of whack then a little less than a AAA credit rating is due, and a little more interest payment is overdue as a penalty for financial irresponsibility.
The trouble is that borrowing and lending amounts vary across the entire party. Australia, while it now owes almost $US500 billion, is itself owed more than $US60 billion. (No-one ever discusses this.) But all’s still not lost because the more alcohol and party drugs everyone consumes, the less everyone seems to care about who owes who what.
A predicament only arises at noon the following day when everyone has sobered up on Berocca and madly counting just how much they have spent.
Despite increasing interest on debt, nations like Australia and Greece have decided to view things differently. Not that Australia is in the hole to the extent that Greece is, but we need to evaluate the debt using a nation’s Gross Domestic Product (or GDP) as a yardstick.
Merkel lends support... but not forever.
Greece has an horrific GDP to debt ratio of 160 per cent in both nett and gross amounts, while Australia has a ratio of nett debt at around 35 per cent and a gross figure at 17 per cent of GDP. Not too bad you might say considering the US has both nett and gross debt hovering around 100 per cent.
It's one big party for Greece and Brussels even has to pay for the plates
Hmmm, but the US has a middle economy the envy of every other nation with claimed SMEs (small and medium sized enterprises) of 90 million. I don’t believe that figure and suggest it’s closer to 20 or maybe 30 million at most, in a population of 235 million. But that is still a huge weapon for recovery with an unemployment figure having settled below five per cent.
US State and Federal taxes will reap the trillions necessary for any recovery within say, a decade.
Greece is a write-off, as it is a victim of the farcical EU that allowed it to continue to borrow while increasing its entitlement payouts and not bothering to seriously collect taxes.
Greece is just another social experiment nightmare, and emblematic of why the ill-conceived EU cannot eventually survive.
So to Australia. It also has been sucking on too many feel-good party drugs, because without China we immediately devolve to a banana republic.
Unlike the US under Trump, we have a grossly over-regulated and under-performing middle economy. In terms of recovery we are in a worse position than the US whose debt stands at an incomprehensible $21 trillion.
Unfortunately we have opted for the ostrich approach to serious debt.
Honest it's not big enough to worry anyone.
The Rudd/Gillard/Rudd administration used the GFC excuse to spend like drunken sailors in a Surry Hills whore house.
Howard/Costello handed Rudd a surplus that magically morphed into a massive deficit that has kept doubling since under the Conservatives.
Abbott concentrated on declaring that there was, “debt and deficit as far as the eye could see” and then suddenly, when it all began to look a bit hard, he and Treasurer Hockey claimed it was “manageable”. Of course it was not manageable. Well, not without slashing spending.
Turnbull realised that he could not be re-elected by cutting spending so he and Treasurer Morrison did a deal with Shorten, who was desperate for Labor not to continue to be blamed for the debt, whereby all agreed the path to solvency would reach its terminus in 2021, on the basis that Australia would have a yearly growth rate of at least five per cent.
Five per cent is a ridiculous figure but it kept the horses and the ABC quiet for a while with no bitching about who was culpable.
Now that the stupid deal is unravelling because of universal incredulity, a new concept for debt had to be concocted... they settled on this one: “good debt and bad debt”. WTF?
Tonight again, debt and deficit will not be addressed. Resolution of that would need savage cuts leaving Turnbull lagging even further in the polls. I don’t go to the budget lockup any longer so this time lock them all up and throw away the bloody key and then switch over to CNN for less of a bullshit blizzard,
... and that’s sayin’ somethin’.