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Discussion: Reduce the shocking National Debt of 600 Billion
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snnsx |
Reduce the shocking National Debt of 600 Billion
Mar 28 2008, 11:39 AM EDT
Australia is one of the most indebted countries in the world.If nothing is done, we will soon owe a Trillion Dollars. It van be easily seen by the decreasing proportion of Australia that is owned by the people who live here, that has and the increasing proportion that has been handed to others who don't. Every time you see poverty, hardship and inequality in this country, the National Debt is always lurking there in the background, making it worse. All the bad economic symptoms that people are describing in this forum have as a contributor the fact that Australia is being bled dry by the large economic forces in the world, be it multinationals (including "Aussie" companies) sending profits offshore, larger countries whom we depend on manipulating our politicians and economy (UK, USA, Japan, and now China), the absolutely appalling level of organised crime and corruption (everyone knows but no-one talks about it), or simply by the greed and ignorance (some would say stupidity) of ordinary people who overvalue foreign goods. We elect governments to help protect us from such things. All this must change very soon, or it is a one-way trip to national destitution. And for the bold, vibrant Australia we know and love being cast onto the scrap-heap of history. All government initiatives MUST be based on making Australia and Australians stronger. That seems obvious. Yet it has not been happening. We all know that. And the fact is, over the last three decades, Australia has been getting progressively weaker. All the other economic problems listed here PALE in comparison to this issue, WHY is no-one taking it seriously. Have you all given up? Or are we going to do something about it? 18 out of 35 found this valuable. Do you?
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Posted Anonymously |
1. RE: Reduce the shocking National Debt of 600 Billion
Mar 30 2008, 3:18 AM EDT
Firstly, I disagree that a national debt is a problem or that it is the cause of poverty or hardship. Secondly, you offer no solution.To my first point, though. Why is national debt a problem? What would you say if individuals in Victoria owed people (or banks or companies) in NSW 100 million dollars? Would that be a problem? So what? People owe a 'large' amount of money to people overseas.. Is this worse than the first situation because it's a different country rather than state? If so, why? Is it worse because you find it degrading to owe a foreigner money? How is that a financial issue, rather than a racist one? The reason we owe money overseas is that we import goods from overseas. The goods are purchased from overseas because of the choices of individuals throughout Australia. There is no coercion. After all, in a free economy, no exchange takes place unless both parties benefit. Is it wrong to buy something from overseas if they produce a better product at a lower price? If so, isn't that just a nationalist argument? This brings me back to why people borrow from overseas. Consumers borrow because they want to increase current period income at the expense of income in the next period. Consumers do this voluntarily to maximise satisfaction through time. Business borrow money to invest in projects, to produce goods (new goods), make improvements etc. They only borrow if the net present value is positive- they make money after paying back the interest. Why is it a problem that these 'consenting adults' borrow from overseas? If it is a problem, why do they sitll do it? Do you think you know better than these "ignorant" people and wish to impose controls on their financial activities? Why do so many people think that those in a free economy are too dumb to make up their own minds and need to be controlled in some way. Like I said above, you offer no solution to this 'problem', just rhetoric. 5 out of 13 found this valuable. Do you? |
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snnsx |
2. RE: Reduce the shocking National Debt of 600 Billion
Mar 30 2008, 8:04 AM EDT
I am pleased to have started at least a conversation about this issue.First, this is a problem on the macro scale. People who talk about tax, benefits, etc etc are all looking at the small picture. This is the big picture, so you need to think at that scale. That is, look at the forest, not the trees. A very large debt like that of Australia is a sign of long-term decline. period. Please read my post again. I have described the beginnings of a solution, which could be fleshed out more if this was more than a humble discussion group with limited space. Any other people who care to comment about this, or does everyone have their head in the sand? 2 out of 4 found this valuable. Do you? |
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Posted Anonymously |
3. RE: Reduce the shocking National Debt of 600 Billion
Mar 30 2008, 9:39 AM EDT
In my post I tried to build a sound argument explaining why I don't think the national debt is a problem. My argument may have been stronger If I could have rebutted your points. But since you didn't explain why you thought it was a problem, I assumed it was for nationalist reasons. Since you didn't clarify anything in your second post, I'm going to assume that I was correct.Perhaps you should both our posts again and than explain why you think national debt is a problem. Or explain the flaws in my logic. I argued above that I don't believe there is a problem. I believe the national debt is a problem if and only if the Net Debt Service is increasing. That is, we are having to borrow to pay back what we already owe, so there is an explosive time path. I'm absolutely certain this is not the case in Australia, just thought I'd make the point for completeness. 2 out of 7 found this valuable. Do you? |
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snnsx |
4. RE: Reduce the shocking National Debt of 600 Billion
Mar 30 2008, 10:41 AM EDT
If Victorians owed 100 billion (yes, Billion, not Million) to NSW, that would be redistributedby the central government. Countries do that for each other. The comparison is meaningless. And, yes, the debt is going up very fast. It has quadrupled in just a few years. It is much higher than comparable countries, else they are falling (Canada is 800bn and falling, NZ is holding at 150bn, The Phillipines is considered almost bankrupt at 120bn, for example). This is not just about individuals and companies borrowing money. It is about the total indebtedness of Australia as a country. That relates to all the issues I raised, and more. Anything that makes Australians less well off as a group. And it is a very long list. Multinationals laundering their profits through offshore tax havens. Organised crime and political corruption which contributes nothing to the general welfare of the nation (it is worse in Australia than other comparable countries I have lived in or know about). Debt only becomes a problem when you can't repay. Either we trade our way out of it in time, or we don't.. When things get difficult in the world economy, as they are likely to very soon, those in debt go under. If you really want to fully understand the problem, do your own research! I also take extreme umbrage to the suggestion from someone who is Anonymous that I am somehow racist, or that I am arguing from a nationalist viewpoint. I have worked overseas for many years, and some of my best friends are Emiratis / Germans / Americans / Swiss / Finns / French / Chinese / Brazilians / Somalis, you name it. What about you? It is the business of those who look after the economy of a nation to do just that, to look after our interests as a group. The world is a competitive, dog-eat-dog place. 8 out of 10 found this valuable. Do you? |
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snnsx |
5. RE: Reduce the shocking National Debt of 600 Billion
Mar 30 2008, 10:52 AM EDT
Also, some Solutions : - more transparency in the dealings of Multinationals - a proper campaign against organised crime and political corruption (particularly in NSW) - a consumer campaign such as the "Buy Australian, and your money comes back to you" campaign of the 60s - who remembers that? How could that message be phrased today? - above all, a recognition that there is a problem, and a commitment to work towards a solution from our elected representatives. It is not my intention to solve this myself in a few paragraphs, I would prefer if some others contributed......... A footnote: Australia is peculiarly vulnerable to world economic crises. In the 1890s, 1930s and the late 1980s Australia was hit relatively much harder than other countries, despite its apparent strength from primary industries, (such as wool, iron ore, etc). People have very short memories. Ask your granny if living through the 30s was fun. It wasn't. It won't be soon again, unless we are very wary. 9 out of 9 found this valuable. Do you? |
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Posted Anonymously |
6. RE: Reduce the shocking National Debt of 600 Billion
Mar 31 2008, 7:50 AM EDT
The world is competitive, but Australians buying goods from overseas does us no harm. There is nothing wrong with buying goods from overseas or with borrowing money from overseas, this does not make us less well off. That these activities are costly to Australia is a common but harmful mistake. A small minority of people borrow money when they can't afford to and that is a shame, but it is not a national problem or a sign of weakness. A solution to that problem could be training ordinary people infinance and tighter regulation of the commissions on lending.I agree that debt is only a problem when it can no longer be repaid. That's what I was getting at in my discussion of the net debt service. Australia's net debt service is stable and there is no danger of that changing. In the 1980s Australia experienced a fairly deep recession as the result of monetary policy in USA. The Chairman of the Fed Reserve in American increased interest rates to nearly 20% to reduce inflation. This was known as the "Volcker disinflation", after the chairman Paul Volcker. The AUD was still fixed to the USD under a crawling peg regime. To prevent capital outflow and a depreciation of the dollar (uncovered interest parity), Australian interest rates increased to levels roughly similar to those in the US. I don't think Australia is particularly vulnerable to external shocks. See the Asian Financial Crisis in 1997 and the US recession in 2000 and downturn (recession..?) this year, throughout which Australia continued to grow strongly. I didn't suggest that your racist. Yes I do have friends that were not born in Australia but I haven't made a list unfortunately. I still believe your views are based on an 'us vs them' mentality which I do not believe is helpful. By the way, your identity is as anonymous as mine, snnsx. 0 out of 6 found this valuable. Do you? |
trgh |
7. RE: Reduce the shocking National Debt of 600 Billion
Apr 17 2008, 10:25 PM EDT
Is the debt a problem?Since over half of our income tax goes towards the interest payments on our overseas debt, then YES it is a problem. Without this debt, income tax could be cut in half. For further info (especially on the CAUSE of the problem) read the thread on the Issue and Regulation of Money. Anon, "Nationalism" seems to be for you, a dirty word. Yet who in their right mind would abandon "looking after your own" purely because someone else can't look after theirs? Surely, if you put things in true perspective at home, then you may be in a better position to assist others. In contradistinction, the Collectivism we plunge towards with "unilateral free trade" strips Australia of our independence, our creative initiative, and our responsibilities. Call me a Nationalist if you like, but I don't hold back when I proclaim "Long Live Australia !!!" Good post snnsx. 9 out of 10 found this valuable. Do you? |
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Posted Anonymously |
8. RE: Reduce the shocking National Debt of 600 Billion
Oct 5 2008, 6:14 AM EDT
yes you are right.The new world order doesnt seem to be losing steam. 0 out of 3 found this valuable. Do you? |
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Posted Anonymously |
9. RE: Reduce the shocking National Debt of 600 Billion
Oct 8 2008, 6:08 PM EDT
"Is the debt a problem?Hi trgh, I am looking into and trying to obtain figures as to just how much of out exorbitant tax goes into paying interest on foreign debt, debt which IMO a govt. has no moral or legal right to enter into in the first place. You mentioned the figure of 'over 50%', could you please post where that figure comes from? Also if you have links to out national debt problem on a state by state basis that would be appreciated as well. CHeers 0 out of 1 found this valuable. Do you? |
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trgh |
10. RE: Reduce the shocking National Debt of 600 Billion
Oct 9 2008, 6:56 AM EDT
Hi Anonymous.If you create an account then at least I can tell which "anonymous" it is. Anyone at the moment, can pretend to be YOU!!! You don't have to divulge who you are - just pick an obscure name, and a password. The figures you will have to give me time to get, but in the meantime, Bear this in mind ... "Not only has the govt. no right to enter into debt, (claiming their ability to tax the people as collateral), but they have no need to either! The Australian Constitution provides our government with the authority to create and issue as much money (debt free & interest free) as it determines may be neccessary for the running of the economy. 4 out of 4 found this valuable. Do you? |
Mugwort |
11. RE: Reduce the shocking National Debt of 600 Billion
Oct 9 2008, 5:59 PM EDT
Okies, thanks for the reply,Have created an account as requested, yes there are too many 'anonymous's here. ;-) Also, if you have the links, it would be good to know exactly how much the govt. nicks in taxes (ALL taxes, including those ones that were supposed to be abolished once the GST came in), including stamp duties, traffic infringements and all other ways by which our so-called elected officials contrive to separate us from our 'wealth for toil'. ;-) I guess what I have in mind is to figure out how much the govt. pinches and where it all goes cos afaict they pinch a whole lot, borrow even more and STILL the country is a financial and societal mess. If most of that money is simply going to foreign banks in interest for illegally borrowed funds then we need to do something about it. Cheers 0 out of 1 found this valuable. Do you? |
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Mugwort |
12. RE: Reduce the shocking National Debt of 600 Billion
Oct 9 2008, 6:49 PM EDT
P.S. also if anyone can make sense of this for me I would appreciate it.http://www.budget.gov.au/2007-08/overview/html/overview_37.htm This is the government budget for 07/08 but the figures dont even seem close to me. For e.g. they claim to receive only $119.5 million from income tax and in fact all of the sub criteria are in the millions, this seems very unrealistic to me. Yet the opening statement reads :The charts below summarise Australian Government revenues and expenses for 2007‑08 on an accrual basis. Total revenue for 2007-08 is expected to be $247 billion, an increase of 4.8 per cent on estimated revenue in 2006-07. Total expenses for 2007-08 are expected to be $236 billion, an increase of 6.3 per cent on estimated expenses in 2006‑07." Does 'accrual basis' mean some time frame other than annual? Or this this simply govt. fud and we'll never know the real figures? Thanks Do you find this valuable? |
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trgh |
13. RE: Reduce the shocking National Debt of 600 Billion
Oct 9 2008, 7:13 PM EDT
Hi Mugwort.That $119.5 million ... that's not a full stop but a comma ... $119,560 million, or $119.5 Billion This budget report doesn't say anything about servicing the overseas debt (it seems that perhaps it doesn't exist !@^$%&!) More coming (you do ask hard questions!) Terence 1 out of 1 found this valuable. Do you? |
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Mugwort |
14. RE: Reduce the shocking National Debt of 600 Billion
Oct 10 2008, 12:46 AM EDT
lol.Maybe, but IMO they shouldn't be too hard. There must be an easy to understand document somewhere that lists govt. debt both federally and state by state and the terms, conditions and interest rates of them? Unless *gasp* the govt is being devious and doesn't want us to know the actual depth of the poo-poo we (and our great grand kids) are in? ;-) 0 out of 1 found this valuable. Do you? |
muddyboots |
15. RE: Reduce the shocking National Debt of 600 Billion
Oct 14 2008, 2:35 AM EDT
Anyone who doesn't think having a sizable national debt is an issue, maybe have a read of this - it's pretty interesting stuff:http://whatreallyhappened.com/WRHARTICLES/ARTICLE2/doodoo.html?q=ARTICLE2/doodoo.html I think govt should have to openly and honestly disclose the level of national debt, but instead they are able to bury it, shuffle it about and rename bits of it, and just magically print/create/invent more money to deal with it (which of course will lead to inflation, but hey - that is a LEGAL way of ripping off hard-working Aussies...basically its like yet another form of tax). This whole concept of living on credit and palming it off on future generations is DOOMED. It is going to come down hard some day, and I feel terrible for whichever generation gets lumbered with it. Better it happens sooner and we rebuild the entire system and stop thinking you can keep living off some future wealth. Let's face it, we are plundering this poor planet for all it is worth already - isn't it time we realised we have to learn to live within our means, and that includes the natural as well as monetary resources at our disposal. 1 out of 1 found this valuable. Do you? |
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trgh |
16. RE: Reduce the shocking National Debt of 600 Billion
Oct 14 2008, 8:07 AM EDT
"My first responsibility as Prime Minister is to take whatever action is necessary to maintain the stability of Australia's financial system and I will continue to exercise that responsibility,"Our Prime Minister is either lying or he is naive? Perhaps he listens to Lindsay Tanner, of whom we could ask the same question! Oh, but wait a minute ... they are all doing the same thing: U.S., Britain, etc. Even the economic analysts consider anything and everything - except the abolition of the charging of interest. These financial criminals will get their "pound of flesh" even if the governments have to pay for it (via the taxation of the people). Look at the extent to which the whole world will go - to serve the unchallenged exploiters of the world. 0 out of 1 found this valuable. Do you? |
Sympneology |
17. RE: Reduce the shocking National Debt of 600 Billion
Oct 17 2008, 4:16 AM EDT
"I am looking into and trying to obtain figures as to just how much of out exorbitant tax goes into paying interest on foreign debt, debt which IMO a govt. has no moral or legal right to enter into in the first place. You mentioned the figure of 'over 50%', could you please post where that figure comes from? Also if you have links to out national debt problem on a state by state basis that would be appreciated as well.There seems to be some confusion about what is meant by "National Debt". There are two parts to national debt: a) the debt owed by the national and state governments to overseas bondholders for financing government expenditure not covered by taxation revenue, and b) the debt owed by private citizens and corporations for imports and investments. The Howard government succeeded in turning (a) from a deficit into a surplus (some of which Rudd is proposing to use to get us out of the mess) basically by transferring the debt from (a) to (b), i.e. he privatised the national debt. The government has no way of reducing (b) because it is under the control of private corporations like the Commonwealth Bank and Macquarie Bank, and overseas owned corporations. It would be interesting to know why the Fraser government instructed the Australian Bureau of Statistics to cease collecting data on overseas investment. 7 out of 7 found this valuable. Do you? |
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Mugwort |
18. RE: Reduce the shocking National Debt of 600 Billion
Oct 18 2008, 1:14 AM EDT
HI sympneology,Yes I was aware of that distinction. Personal debt, while still a stone around the neck of the borrower is the responsibility of the person entering into the agreement. Debt incurred by governments because they can't do their job properly within their allotted means is mostly what I want to know about. And let's look at it logically, if they can't do the job with all of the taxes they sponge from us, how much LESS will they be able to the job with a rising level of expense AND interest to pay as well? IMO they're a pack of incompetent criminals who should be kicked out of office and a real government elected from competent people chosen without the farce of the '2-party preferred' system. 0 out of 2 found this valuable. Do you? |
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Sympneology |
19. RE: Reduce the shocking National Debt of 600 Billion
Oct 19 2008, 2:13 AM EDT
"Between them the Keating and Howard governments turned the PUBLIC national debt into a national credit, a lot of which was invested in the Future Fund for use in emergencies (such as the current crisis) and to cover pensions for retiring baby boomers. This was the correct way to proceed during times when the country was experiencing a minerals boom. During a recession, when unemployment results in lower tax revenue and higher social security expenditure, the correct procedure is for the government to borrow money from overseas to be repaid when the good times return. This enables it to undertake infrastructure projects to increase employment, thus boosting retail spending and expanding the tax base. It is called pump-priming. Unfortunately, the economic rationalists got into the act and urged the privatisation of vital public assets like the Commonwealth Bank, Telstra, rail freight, airports, CSL, hospitals, prisons, etc. Road building was parcelled out to corporations who operate in the interests of shareholders, not road users. This has enabled the government to cancel the public debt and thus have the revenue available to buy votes with tax cuts. All very well except that with the taxes we save we have to pay to use the services the government used to provide free. TANSTAAFL! 8 out of 9 found this valuable. Do you? |
