Quote:
Originally Posted by Retrograde
No we're not (and here's some reasons why):
1) Our debt to GDP ratio (the correct measure) has been higher in the past.
2) The USA hasn't had as low a debt to GDP ratio as us since....... 1918!
(yes the 2nd world war, the space race, being a 20th century global superpower: all achieved with a higher debt to GDP ratio than we have at present) The USA's current problems are far more recent in origin.
3) Gross debt is not a true measure of debt - it's like adding up all your credit card spending and ignoring repayments & in reality to do with the size of the government bond market. It has just become the Coalition's measurement of choice since scary debt numbers became their no.1 political tool. Net debt is the true measure: we should all learn the difference.
4) What's printed in the Daily Tonygraph (aka the Tele) is not news - it's propaganda.
5) Spending in this budget is actually up over the last 3 Labor (post GFC) budgets. It's not fixing anything but actually making things worse.
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response to your points
1. yes it has been higher in the past but we have had plans to lower them or good reason for it to remain high (eg. war, depression, recession) which we presently do not have. Presently at just below trend growth we should be running budget neutral if your comparing us to the past.
2. Comparing us to the USA is a fallacy firstly we don't run the world police force if that didn't exist there is a case to be made that their national debt would be spread across the world in higher international defence budget spends.
The issue isn't to do with our debt level really its to do with our bond market obligations (interest rates on said Debt) for Australia the long range average rate on this is 4% compared to 1-2% for the USA and 1% for the Germans. On this simple measure their Debt ratio can be double to triple our level for the same annual cost (interest bill). Therefore, looking at our 20% net debt is essentially the same as the USA's 60% net debt (they have an 80% gross debt) obligations from an interest payment perspective.
3. net government debt stands at about 20% of GDP -
http://www.abc.net.au/news/2014-03-1...ending/5310736
mentions the net debt in a graph.
4. Didn't see the article ... probably is propaganda all commercial news is in some way or form.
5. true spending in this budget is higher than last year (indeed all previous budgets) in dollar terms. What has been done is reduced the rate of increase in spending year on year.
eg. instead of the average increase in spending for the last 3 labor budgets which where about 3.7% this one is (i think) only about 1.76% which is slightly below forecast (i stress forecast) increase in revenue (about 2.2%).
So nothing is technically being cut in an overall sense (i am talking budget spending increase or decrease) just the growth is being slowed. This is why the government is saying it isn't cutting education or health spending (it isn't) but the states are saying they are cutting 80 billion (it is money across the forward estimates that won't be sent because of a reduction in the annual increase.) so for example health funding instead of being 126 Billion in 10 years time will be 92 billion compared to the 73 billion being paid to the states today. (note these health numbers are made up figures to demonstrate a point, may not represent actual health spending
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