Given that the labor lovers on here see no problem with our level of debt, At what point do they feel that we'd have too much debt.

Do we go to levels such as Greece and Spain to keep our economy afloat.

I'd be interested knowing how much becomes too much.

Now they'l come out and say that our debt is 5% of GDP which equates to a 100K salary earner only owing $5000, Ok that seems ok.

But the 100K salary earner is repaying the debt the bank wont allow him to just let it grow like the governemnt allows its debt to grow.


And given we are borrowing billions more than we earn, what happens when we can't borrow any more?? what happens then, do we then become like Greece and Spain????

Should we go back to Howard era record household and private debt as well as record taxes?
If we do its easy to get rid of govt debt

So are you saying that the labor governmnet has taken over ppl household debt???

Is that why our debt is so high, casue if it is I and many others I know missed out on the gov taking our debt off us, cause noone from the gov came and saw anyone I know and said how much do you owe, OK here is a cheque go pay it off we'll look after it for you.

Thats what your saying isn't it???

woof woof wrote on Sep 25^th, 2012 at 5:19pm:

Is that why our debt is so high, casue if it is I and many others I know missed out on the gov taking our debt off us, cause noone from the gov came and saw anyone I know and said how much do you owe, OK here is a cheque go pay it off we'll look after it for you. Thats what your saying isn't it???

Howard just transferred debt from govt to households..we are finally getting rid of that debt and saving again so we dont need Howards method of transferring govt debt to households ever again
Also remember Howard was the highest taxing govt in this countries history which goes a long way to getting rid of govt debt but does nothing for household savings.

adelcrow wrote on Sep 25^th, 2012 at 5:09pm:

Should we go back to Howard era record household and private debt as well as record taxes? If we do its easy to get rid of govt debt

if it was a poor idea then... what does that make it now.. when we have record mineral sales..

or maybe you buy this two wrongs make a right idea...mmmmm

as for me.. its also about what THEY SPEND IT ON..


as it is we have millions of waste..I find that appalling I really do.the govt has more advisers and consultants than ever before and still cant get it right.


why does that always seem to be okay with a lefty as long as its Labor/green?

cods wrote on Sep 25^th, 2012 at 5:35pm:

adelcrow wrote on Sep 25th, 2012 at 5:09pm: Should we go back to Howard era record household and private debt as well as record taxes? If we do its easy to get rid of govt debt if it was a poor idea then... what does that make it now.. when we have record mineral sales.. or maybe you buy this two wrongs make a right idea...mmmmm as for me.. its also about what THEY SPEND IT ON.. as it is we have millions of waste..I find that appalling I really do.the govt has more advisers and consultants than ever before and still cant get it right. why does that always seem to be okay with a lefty as long as its Labor/green?

I agree..the federal and state govts can easily shed 100,000 public service jobs between them.
It wont save any money but it will mean billions for private companies taking up the work

adelcrow wrote on Sep 25^th, 2012 at 5:22pm:

woof woof wrote on Sep 25th, 2012 at 5:19pm: Is that why our debt is so high, casue if it is I and many others I know missed out on the gov taking our debt off us, cause noone from the gov came and saw anyone I know and said how much do you owe, OK here is a cheque go pay it off we'll look after it for you. Thats what your saying isn't it??? Howard just transferred debt from govt to households..we are finally getting rid of that debt and saving again so we dont need Howards method of transferring govt debt to households ever again Also remember Howard was the highest taxing govt in this countries history which goes a long way to getting rid of govt debt but does nothing for household savings.

can you explain that to me.. and with a link if you can as I dont understand how any govt can do that...

you have said over and over Howard was the highest taxing govt for one thing you are the only person that ever says that..all I remember was Tax cuts and bonus' to welfare recipients.

he was the one that also gave out baby bonus' not that I approved of that..but it still wasnt a tax was it??..he was also paying our servicemen thousands for being in Iraq and then Afghanistan..must include East Timor in that...

I mean it all adds up doesnt it?

and lets not forget the KEATING DEBT he inherited..all had to be paid back.. with interest.

you dont give any one their dues do you? just like swan and gillard..

How did he transfer federal debt to households.
I didn't take on board any federal debt?

Is this another one of your myths you try to pedal?

Even $1 is too much debt.

If the government can't run the place on the billions (trillions?) it takes in taxes every year, perhaps they should cut back on the scope of their operations. 

But it never seems to be questioned whether regulations to govern every minutiae of our existence are as "essential" as providing roads, infrastructure and defence - you know, what government was supposed to do?

"The bureaucracy is expanding to meet the needs of the expanding bureaucracy."
-Oscar Wilde

When the govt stops spending money on services the slack is taken up by households eg: cuts to police always means a rise in business for private security contractors and who pays for that?

cuts to schools means a rise in business for private tutors..who pays for that?

adelcrow wrote on Sep 25^th, 2012 at 5:46pm:

cods wrote on Sep 25th, 2012 at 5:35pm: adelcrow wrote on Sep 25th, 2012 at 5:09pm: Should we go back to Howard era record household and private debt as well as record taxes? If we do its easy to get rid of govt debt if it was a poor idea then... what does that make it now.. when we have record mineral sales.. or maybe you buy this two wrongs make a right idea...mmmmm as for me.. its also about what THEY SPEND IT ON.. as it is we have millions of waste..I find that appalling I really do.the govt has more advisers and consultants than ever before and still cant get it right. why does that always seem to be okay with a lefty as long as its Labor/green? I agree..the federal and state govts can easily shed 100,000 public service jobs between them. It wont save any money but it will mean billions for private companies taking up the work

here we go... you sound more like woody green win than ever must be a green thing.. wriggle as much as you can never really answer a question.. and make sure you never admit to anything..

dont do as I do do as I say mantra..


can you explain how it is with the PS they use at least two people for every job...and we would still need two people in the private sector ??? wont happen

I am wondering how the future fund is going?? has this govt boosted it as they are meant to do?... isnt it meant to take care of .P.S. at the top end of course.

adelcrow wrote on Sep 25^th, 2012 at 5:50pm:

When the govt stops spending money on services the slack is taken up by households eg: cuts to police always means a rise in business for private security contractors and who pays for that?

I expect that sort of contrived BS from an avowed communist. 

So you think the government should keep on spending even when it has to borrow that money.

So we come back to my original question, how much debt is too much, and what happens to us when the credit is cut off???

The business Im in used to be covered by water rates in SA, Vic and NSW.
Now householders and businesses pay separately and they still pay rising water rates.
Its quite simple really..govts transferring their responsibilities means higher costs for business and households

adelcrow wrote on Sep 25^th, 2012 at 5:51pm:

cuts to schools means a rise in business for private tutors..who pays for that?

my family do... one or all of them have always had tutoring for their children..have done for years... tell me whats the difference.>

they are not getting quality now...

we all know it is easier to get a teaching degree than it once was... and of course now we are paying the piper..

btw my family all pay these tutors.. usually teachers of some kind.

adelcrow wrote on Sep 25^th, 2012 at 5:54pm:

The business Im in used to be covered by water rates in SA, Vic and NSW. Now householders and businesses pay separately and they still pay rising water rates. Its quite simple really..govts transferring their responsibilities means higher costs for business and households

I see thanks for that... however it wasnt a Howard thing only was it???..

look at the ripping off of the Power business in NSW alone.. they the NSW labor govt creamed off all their profits year in year out..and then passed the rise on to the consumer..

water would be no different we are sitting ducks where else do you go??..

at least if I want to buy a cheap t/shirt I can..but when it comes to utilities forget it.

cods wrote on Sep 25^th, 2012 at 5:54pm:

adelcrow wrote on Sep 25th, 2012 at 5:51pm: cuts to schools means a rise in business for private tutors..who pays for that? my family do... one or all of them have always had tutoring for their children..have done for years... tell me whats the difference.> they are not getting quality now... we all know it is easier to get a teaching degree than it once was... and of course now we are paying the piper.. btw my family all pay these tutors.. usually teachers of some kind.

There ya go ..if schools were properly funded it would save you money

adelcrow wrote on Sep 25^th, 2012 at 5:54pm:

The business Im in used to be covered by water rates in SA, Vic and NSW. Now householders and businesses pay separately and they still pay rising water rates. Its quite simple really..govts transferring their responsibilities means higher costs for business and households

Why, I don't believe our government has ever transferred its responsibilities but sure has usurped them.
It's responsiblities being roads, infrastructure and defence - nothing more.  Welfare and governing peoples lives and social interactions are not governments responsibility - yet they greedily clutch at them in an attempt to foster dependence on it, thereby consolidating their power. 

cods wrote on Sep 25^th, 2012 at 5:57pm:

adelcrow wrote on Sep 25th, 2012 at 5:54pm: The business Im in used to be covered by water rates in SA, Vic and NSW. Now householders and businesses pay separately and they still pay rising water rates. Its quite simple really..govts transferring their responsibilities means higher costs for business and households I see thanks for that... however it wasnt a Howard thing only was it???.. look at the ripping off of the Power business in NSW alone.. they the NSW labor govt creamed off all their profits year in year out..and then passed the rise on to the consumer.. water would be no different we are sitting ducks where else do you go??.. at least if I want to buy a cheap t/shirt I can..but when it comes to utilities forget it.

My business was born out of the SA Liberal govt privatisation spree so I have no personal complaints..Im simply pointing out people pay either way

So what happens when our credit card is maxed out and the PS salaries and centrelink payments can't be made.

What happens then??

How much debt do you think becomes too much?

woof woof wrote on Sep 25^th, 2012 at 6:01pm:

So what happens when our credit card is maxed out and the PS salaries and centrelink payments can't be made. What happens then?? How much debt do you think becomes too much?

I just said we could easily lose 100,000 public servants across the country..it wouldn't save any money...it would just transfer the costs to households but if you want that all power to you

woof woof wrote on Sep 25^th, 2012 at 4:54pm:

Given that the labor lovers on here see no problem with our level of debt, At what point do they feel that we'd have too much debt. Do we go to levels such as Greece and Spain to keep our economy afloat. I'd be interested knowing how much becomes too much. Now they'l come out and say that our debt is 5% of GDP which equates to a 100K salary earner only owing $5000, Ok that seems ok. But the 100K salary earner is repaying the debt the bank wont allow him to just let it grow like the governemnt allows its debt to grow. And given we are borrowing billions more than we earn, what happens when we can't borrow any more?? what happens then, do we then become like Greece and Spain????

TONY ABBOTT LOVES THE POWER OF LEVERAGE!

JUST ASK HIS WIFE AND FAMILY.....................................................  ;) ;) ;)

woof woof wrote on Sep 25^th, 2012 at 5:53pm:

So you think the government should keep on spending even when it has to borrow that money. So we come back to my original question, how much debt is too much, and what happens to us when the credit is cut off???

if it has to , yes  .... governments job is to keep the economy kicking over at a steady rate .. sometimes they need to slow it down, other times they need to stimulate it ... GFC meant they had to stimulate it ... did you borrow money to buy your house? 

the answer to your question is  ..  as much as they can afford to pay back ...

John Smith wrote on Sep 25^th, 2012 at 9:28pm:

woof woof wrote on Sep 25th, 2012 at 5:53pm: So you think the government should keep on spending even when it has to borrow that money. So we come back to my original question, how much debt is too much, and what happens to us when the credit is cut off??? if it has to , yes  .... governments job is to keep the economy kicking over at a steady rate .. sometimes they need to slow it down, other times they need to stimulate it ... GFC meant they had to stimulate it ... did you borrow money to buy your house?  the answer to your question is  ..  as much as they can afford to pay back ...

Governments never really have to run a surplus!

woof woof wrote on Sep 25^th, 2012 at 4:54pm:

Given that the labor lovers on here see no problem with our level of debt, At what point do they feel that we'd have too much debt. Do we go to levels such as Greece and Spain to keep our economy afloat. I'd be interested knowing how much becomes too much. Now they'l come out and say that our debt is 5% of GDP which equates to a 100K salary earner only owing $5000, Ok that seems ok. But the 100K salary earner is repaying the debt the bank wont allow him to just let it grow like the government allows its debt to grow. And given we are borrowing billions more than we earn, what happens when we can't borrow any more?? what happens then, do we then become like Greece and Spain????

The proper & usually acceptable answer is, that depends!

It depends on the Global & Local Economic cycle and at what point in the cycle we find ourselves.

For example, in the decline phase of the Local & Global Economy, it would be usual (in line with standard Economic practices) to increase Debt, in order to stimulate the Economy, which is what has been happening.

Whilst, at the other end of the cycle, when the Economy is in an upswing, Debt should be paid down, thus reducing the Debt to GDP ratio, to lower & more acceptable levels, which is what happened under the Liberals during 1995-2007.

To provide some background, the following is a chart of US Debt to GDP % between 1900-2012. As can be seen, the early part of the 1900's saw a ratio of around 10% as usual. After that the usual range is between 30-50%, with the WW2 period Peaking at 120% and the current rise between 2001-2012 is nudging 100% now. However, those recent figures are certainly fudged & muddied by the involvement of the Federal Reserve Bank and there are strong expectations that the real US Debt to GDP ratio is already well over 100% & it will continue to escalate for quite some time. In short, they will emulate "the Don", they will get a ton & go on with it!
http://www.usgovernmentspending.com/spending_chart_1900_2012USp_11s1li011mcn_H0f_US_National_Debt_As_Percent_Of_GDP


Following is another chart, which provides a comparison with a few other countries, notably the USA, UK, Japan & Italy.
http://upload.wikimedia.org/wikipedia/commons/thumb/6/64/Dept.svg/600px-Dept.svg.png

Japan is a basket case, at well over 200% Debt to GDP.
Italy is at 140%, accord to the chart, but it is now higher.
The UK is at 80%, accord to the chart, but it is also now higher.

Now, I've shown all this to highlight that Debt is part of the Global and not only is it an accepted part, it is actually an integral part, particularly in the modern era.

So, how much is too much Debt & how much is OK?

Well, as I said, that depends on what point we are at in the Economic cycle. That said, most reasonably run countries will aim at 30% in good times, but if the Debt to GDP ratio starts heading North of 80-90%, then they know they are in for some serious problems or at least they should know.

As can be seen in the following, Australia has had a maximum rate of 31.7% in 1995, which is at the lower end of what most countries would be happy with. It got as low as 9.7% in 2008 and is now back up to 22.9% now, as the effects of the GFC has enter into the OZ Economy.
http://www.tradingeconomics.com/australia/government-debt-to-gdp

So, both Liberal & Labor have certainly done better than their counterparts in most other countries, BUT they all should have done better!

I hope this gives some helpful guidance, on the rightful position of Debt in the Economy.

Btw, those usual Economic remedies are now "Null & Void", given some major events now under way -
1) Demographic Change - Baby Boomer Retirements
2) Energy - Demand outstripping Supply.
3) Debt - Levels already at historic highs & continuing to climb
4) Climate Change - Raising Debt, lowering Food Supply & increasing Prices and lowering levels of fresh water, for irrigation & drinking.    

Nearly forgot, the following, may provide some further confirmation where Australia sits, in comparison to other countries in the Debt race.
http://www.indexmundi.com/g/r.aspx?c=as&v=143

cods wrote on Sep 25^th, 2012 at 5:47pm:

adelcrow wrote on Sep 25th, 2012 at 5:22pm: woof woof wrote on Sep 25th, 2012 at 5:19pm: Is that why our debt is so high, casue if it is I and many others I know missed out on the gov taking our debt off us, cause noone from the gov came and saw anyone I know and said how much do you owe, OK here is a cheque go pay it off we'll look after it for you. Thats what your saying isn't it??? Howard just transferred debt from govt to households..we are finally getting rid of that debt and saving again so we dont need Howards method of transferring govt debt to households ever again Also remember Howard was the highest taxing govt in this countries history which goes a long way to getting rid of govt debt but does nothing for household savings. can you explain that to me.. and with a link if you can as I dont understand how any govt can do that... you have said over and over Howard was the highest taxing govt for one thing you are the only person that ever says that..all I remember was Tax cuts and bonus' to welfare recipients. he was the one that also gave out baby bonus' not that I approved of that..but it still wasnt a tax was it??..he was also paying our servicemen thousands for being in Iraq and then Afghanistan..must include East Timor in that... I mean it all adds up doesnt it? and lets not forget the KEATING DEBT he inherited..all had to be paid back.. with interest. you dont give any one their dues do you? just like swan and gillard..

some links you say?


Quote:

http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/5506.0Main+Features12005-06?OpenDocument

The truth is, tax receipts are of course going to be higher when GDP increases - all that all of this really shows is that between 2001-2006 there was a disproportionate amount of tax breaks as opposed to receipts; in other words the government was simply doign what it does best and putting forward "tax cuts" as election commitments to buy your vote.

As for paying servicemen, I'm not sure what you're suggesting there because servicemen and women and all public services people receive payment from a government body.  Howard paid people and so we should be thankful for that? What the?

... wrote on Sep 25^th, 2012 at 5:59pm:

adelcrow wrote on Sep 25th, 2012 at 5:54pm: The business Im in used to be covered by water rates in SA, Vic and NSW. Now householders and businesses pay separately and they still pay rising water rates. Its quite simple really..govts transferring their responsibilities means higher costs for business and households Why, I don't believe our government has ever transferred its responsibilities but sure has usurped them. It's responsiblities being roads, infrastructure and defence - nothing more.  Welfare and governing peoples lives and social interactions are not governments responsibility - yet they greedily clutch at them in an attempt to foster dependence on it, thereby consolidating their power.

so the federal government is responsible for national roads and defence. State government is resposnible for ... state roads. And local government is responsible for pot holes.

Got it.

woof woof wrote on Sep 25^th, 2012 at 5:53pm:

So you think the government should keep on spending even when it has to borrow that money. So we come back to my original question, how much debt is too much A whole HELL of a lot more than ours., and what happens to us when the credit is cut off??? NOT going to happen. Our economy is good, and so is our credit-rating. Don't listen to Dismal-Jimmies like Armpit et al. They're full of it.

Kat wrote on Sep 26^th, 2012 at 12:44am:

woof woof wrote on Sep 25th, 2012 at 5:53pm: So you think the government should keep on spending even when it has to borrow that money. So we come back to my original question, how much debt is too much A whole HELL of a lot more than ours., and what happens to us when the credit is cut off??? NOT going to happen. Our economy is good, and so is our credit-rating. Don't listen to Dismal-Jimmies like Armpit et al. They're full of it.

Actually, it's a smacking shame that some of these right-wing SOBs that keep
talking the economy down can't be charged with sedition or something...

Because it's certainly not in the COUNTRY'S best interests....so WHOSE????

AND WHY....????!!

Deleted by Kat.

Double-post.

perceptions_now wrote on Sep 25^th, 2012 at 10:03pm:

Nearly forgot, the following, may provide some further confirmation where Australia sits, in comparison to other countries in the Debt race.

Japan is equivalent to Zimbabwe?  ;D yeah right, it just shows once again - this doesn't prove anything, all depends on who is in charge

Torpedo wrote on Apr 10^th, 2013 at 12:17pm:

perceptions_now wrote on Sep 25th, 2012 at 10:03pm: Nearly forgot, the following, may provide some further confirmation where Australia sits, in comparison to other countries in the Debt race. Japan is equivalent to Zimbabwe?  ;D yeah right, it just shows once again - this doesn't prove anything, all depends on who is in charge

Well, Japan has certainly got a very high Debt to GDP ratio, 2nd worst, next to Zimbabwe, supposedly.

That said, that's about where the comparison stops! Japan's Economy is obviously much. much larger, than Zimbabwe & the Global side effects from a collapsing Japan are like chalk & cheese, compared to a collapsing Zimbabwe.


The following article, may be of interest?
============================
Japan Vs. Newton (And Certain To Lose)

Conventional thinking and reporting has it that Japan is conducting a larger version of the same monetary experiment they've been running for about 15 years. The implication here is that we can safely analyze what Japan is up to through the same monetary lens as always, but with a slightly wider aperture.

By now, we are all familiar with the details. Japan has initiated a program of monetary expansion that goes by the shorthand of 2-2-2. In two years, the Bank of Japan (BoJ) will fully double the monetary base as it seeks a minimum of 2% inflation. In the aftermath of this announcement, the yen weakened by a whopping 8% against the dollar, the Nikkei stock average vaulted up by roughly 10%, and the $10 trillion Japanese government bond market had to be frozen twice because of intense volatility.

In truth, what Japan is running is as much a massive social experiment as it is a monetary experiment. It has such enormous implications to everyone, but especially the Japanese people, that we should all be paying very close attention.

As I am sure you have figured out by now, simply having more money in the system will not automatically result in more money chasing goods. In fact, without a good reason to borrow and then spend that money, those new funds may well just sit in the banking system, chasing nothing related to real goods and services in the real economy. Instead, that money will simply chase financial assets such as stocks and bonds.

The BoJ knows this, and yet their plan revolves around the idea that they can create inflation by simply doubling the monetary base. Does this mean they are confident that there is pent-up consumer demand that was stymied by a lack of cheap funds from the banking system? The very short answer is 'no.' The BoJ knows perfectly well that more base money will do nothing to stimulate additional inflation via consumer demand, and they know this because Japan has had rock-bottom borrowing costs for a very long time.

Conclusion
The BoJ is not just running the largest monetary experiment in their history, but also the largest social engineering experiment. Trust is an essential component in every economy and for every currency. The BoJ has just upped the ante by explicitly and specifically targeting trust in the yen. Perhaps they know what they are doing, and we certainly hope so, but I happen to think it is playing with fire. There really aren't any guidebooks for it to follow, and even if there were, it is doubtful that the economists in charge would have been required to study them during their academic training and political careers.

If the notion of your pilots flying blind bothers you, then you are probably not very happy or confident with the BoJ's actions here. If I were a Japanese citizen, I would immediately convert my yen holdings to something, anything, else. Swiss francs, gold, dollars – anything (!) would be preferable to me here. Once your central bank declares war on its own currency, this is just the prudent thing to do.

For everyone else, Japan is now the largest economic Petri dish on the planet and is well worth studying for what happens next. The early results, with a manic pulse in the Nikkei coincident with arrhythmic gyrations in the Japanese government bond market, suggest that something has been shaken loose in Japan. Trust, perhaps?

Link -
http://seekingalpha.com/article/1328681-japan-vs-newton-and-certain-to-lose?source=email_macro_view&ifp=0
===============================
The fact is that irrespective of who is now running Japan, their Economy is set to shrink, over the coming decades.

No matter what "fun & games" their Politicians &/or Central Bank comes up with, the Japanese Population is set to Decline over coming Decades.

Decline big time it will & those Declines are set in concrete AND following directly as a result of that dip in Population, Japanese Consumption is also set to Decline, as will the REAL GDP.

Eventually, the Monetary props holding up the Japanese Economy will run out & their REAL Economy will be exposed, the picture will shock & the shock waves that follow will disturb the Global Economy far, far more than Zimbabwe could, even in Hollywood's wildest imagination!

Possibly, but that only will impact Zimbabwe to the point of complete chaos, extermination. Rest of the world won't benefit either, including china. Actually, china is going down just as bad. Australian resources won't save them.