Quote:
Originally Posted by casstony
You forgot the North/South pipeline Andrew  .
No political party has a good balance of socially and finacially responsibile policies, such that we alternate between shooting the plebs and running up debt. How many of us saved money in the boom to cushion the coming bust - the governments sure didn't - they should be rolling in cash right now. |
That's probably correct. Furthermore, we have been living beyond our means for some time and it was inevitable that we would have to pay. It appears that we have, or are, reaching that point. The great GFC isn't in the past, we are still in it and we still have a way to go, maybe decades probably before we truly see the end of it.
Governments, like households, cannot keep racking up debt because, at some point it has to be paid back, or the interest alone exceeds our ability to pay it back. Many countries around the globe, including the US are reaching the point where the cost of servicing the loan is greater than GDP. Take Greece for instance, which currently stands at approximately 165%. If you owed 165% more than you earned, what then? And they are far from being orphans, as there are many countries facing that very dilemma.
Its scary really as global demand is reaching the point where we will not be able to meet that demand, let alone pay for it. Take China and motor vehicles, for instance; just imagine if China's standard of living continues to increase and the 1.3 billion population reaches the same level of motor vehicle ownership as western countries, where will all the fuel come from? As it is, China's demand for oil is pushing fuel prices ever higher, thus fuelling inflation (no pun intended).
It really is a house of cards, at some point it has to collapse. Growth cannot continue indefinitely! At some point the piper has to be paid, and there is no escaping that. Usually it is us poor plebs, if you are unfortunate to be one, who suffer the most.
Unfortunately, governments mostly only look to the past and how they can stay in power for the next three or four years. So, sorry to say, don't look for the solution there.
We are fortunate to live in Australia, with a debt to GDP ratio of approximately 22.9%, one of the lowest in the world, as compared to the US at 99.4% and the UK at 65.7%.
Unfortunately, there are going to be some changes and I just hope we can all survive them relatively intact and Australia probably will, which is why there are changes being implemented now. It is what is making us very attractive to people overseas.