Aussie Election Results

[Pat Mustard]

shoosh you!  (they don't know)

I fear we're going the way of Europe - huge unsustainable public debt. There's no reason in times of relative prosperity like now that we should have a deficit - and the fact that the ALP came within $10B of the Coalition's forecast for 2019 is really concerning. It proves they aren't going anywhere near far enough in their "cuts". The other fallacy that gets thrown about is that Labor is for "health and education". Health, Education, and Defence combined make up the overwhelming bulk of 'discretionary spending'. Foreign Aid, Research, Government Grants for example pale in comparison. The Greens would like to see much more money devoted to Foreign Aid, Research and Grants. Which we obviously can't afford without cutting Health, Education, and Defence. I think we need to look at Health and Education for cuts, as well as, and especially, Defence. If not then we're going to be in deficit forever, like European countries, and like USA, and our grandchildren, and their grandchildren will need to sacrifice their standard of living to repay it. China will be living off the proceeds of the world's debt for generations. They already have the buying power to deprive Australians of necessities - which has already happened, for example with Baby Formula. Imagine when that happens to Aussie meats...

What makes national debt problematic is not the size of it (well until you get to Zimbabwe levels) but how its denominated (the US has an advantage here over Ireland because US debt is in dollars) and what its being used for.

If the debt is in your national currency it will always be payable, just increase the money supply (yes I know that carries its own problems). And if you use the debt wisely, on programmes that grow the tax base (even indirectly like building a public health system then you can carry more debt because its being used to increase paying capacity.

Unfortunately public debt these days is used too often to prop up failures in the private market. Hence why countries like the UK and Japan are having trouble living with much lower debts than they lived with comfortably in the 1960s.