Australian Politics Forum - How much debt is too much debt??

adelcrow Gold Member Offline Australian Politics Posts: 20133 everywhere Gender:	Re: How much debt is too much debt?? Reply #15 - 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
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cods

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Re: How much debt is too much debt??
Reply #16 - Sep 25^th, 2012 at 5:54pm

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.

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cods

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Re: How much debt is too much debt??
Reply #17 - Sep 25^th, 2012 at 5:57pm

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.

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adelcrow

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Re: How much debt is too much debt??
Reply #18 - Sep 25^th, 2012 at 5:58pm

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

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.

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

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Re: How much debt is too much debt??
Reply #19 - Sep 25^th, 2012 at 5:59pm

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.

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In the fullness of time...

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adelcrow

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Re: How much debt is too much debt??
Reply #20 - Sep 25^th, 2012 at 6:00pm

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

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.

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

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woof woof Gold Member Offline Australian Politics Posts: 1518 Gender:	Re: How much debt is too much debt?? Reply #21 - 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?
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Re: How much debt is too much debt??
Reply #22 - Sep 25^th, 2012 at 6:03pm

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

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Re: How much debt is too much debt??
Reply #23 - Sep 25^th, 2012 at 8:20pm

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????

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John Smith

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Re: How much debt is too much debt??
Reply #24 - Sep 25^th, 2012 at 9:28pm

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 ...

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BatteriesNotIncluded

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Re: How much debt is too much debt??
Reply #25 - Sep 25^th, 2012 at 9:36pm

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

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 ...

Governments never really have to run a surplus!

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*Sure....they're anti competitive as any subsidised job is. It wouldn't be there without the tax payer. Very damned difficult for a brainwashed collectivist to understand that I know.... (swaggy) *

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perceptions_now

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Re: How much debt is too much debt??
Reply #26 - Sep 25^th, 2012 at 10:03pm

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...

Following is another chart, which provides a comparison with a few other countries, notably the USA, UK, Japan & Italy.

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

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« Last Edit: Sep 25^th, 2012 at 10:09pm by perceptions_now »

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sir prince duke alevine

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Re: How much debt is too much debt??
Reply #27 - Sep 25^th, 2012 at 10:14pm

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

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

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.

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?

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sir prince duke alevine

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Re: How much debt is too much debt??
Reply #28 - Sep 25^th, 2012 at 10:16pm

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

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.

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.

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Re: How much debt is too much debt??
Reply #29 - Sep 26^th, 2012 at 12:44am

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.

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