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Debt And Deficit For Dummies…

Lately I’ve been thinking about all sorts of things and I find that just thinking about things is sometimes enough to make you feel like you should be in charge and you’d give those politicians a jolly good talking to. Of course, that doesn’t mean they’d listen. They tend to listen more to people who don’t think about things, like Alan Jones.

Anyway, while I was thinking about how Covid had reduced the number of people travelling to the CBD, leading to a bit of a crisis, I suddenly had an epiphany which is not as rude as it sounds. For years, we’ve had the problem of too much traffic during peak hour and overcrowded public transport going to the city and nobody’s been able to solve it. Maybe if, instead of seeing this working from home leas and to less people going into the city as the problem, we looked at the problem of businesses in the city facing economic ruin because of the lack of people as a new problem, we’d be able to solve the new problem without seeing the solution as just going back to the old problem which nobody ever managed to solve, no matter how many new freeways they built nor how many times they tried to fix public transport.

We may not have an answer to the new problem, but it’s worth trying to solve that one before asserting blindly that the solution is to replace it with the old one.

And so, having decided to write to the various state governments to suggest that my epiphany makes me worth hiring as a consultant, I turned my attention to the whole debt and deficit thing. You must remember the debt crisis we had when the country’s debt was about a third what it now and about a quarter what it’s projected to be. The Liberals were elected to solve this, not make excuses. I distinctly remember Tony Abbott saying that they’d be a “no excuses” government, and one of his promises in his Contract With Australia was “3. END THE WASTE AND DEBT”!

Yes, I know it’s unfair to hold the Liberals accountable for the promises they made so many Prime Ministers ago, but I do think that people are sort of expecting something more than a shrug of the shoulders to the prediction of ten more years of deficits, “Ah, Covid, what can you do? Vaccines are so hard to come by and we can’t afford a quarantine station because we have an election to buy.”

Ok, I’m not an expert because I don’t have an economics degree but that merely means that I’m the best person to write the “… for Dummies” economic handbook.

Sometimes it’s only by being completely ignorant of any knowledge that enables one to see the situation clearly… just look at One Nation!

Anyway, I thought I’d do some thinking about this whole debt and deficit thing and try to solve it in the same way that I’ve solved just about every problem known to man… Like the Federal Government, I’m not so sure about solving the problems known to women but I figure the fact that I mention them here should go a long way and I intend to Budget some women’s things like a present for my son because his mother is a woman. He’s too old for childcare so I don’t know how else to support women.

It was only when I realised the whole thing about debt compared to budgets that I realised that – even with my limited One Nation understanding of economics – the current narrative is so absurd that we need to go back to the household analogy and credit cards to make any sense of it. Of course, people who’ve read my past stuff would know that I totally reject the “We can’t keep putting things on the credit card!” analogy when it refers to governments because there’s an enormous difference between borrowing money at a couple of percent and your average credit card interest bill. But even though it’s a little hypocritical I’m going to use that as a metaphor, even though I’m running a real risk that I”ll be approached to become a speechwriter for a Liberal politician.

Household analogy: Storm hits! Tree falls down and knocks hole in roof which leads to lots of rain getting in causing damage. While this is covered by insurance. We didn’t QUARANTINE the damage into one room and the resulting flood isn’t. While the house is being repaired, family book into the Hilton and spend a large amount of money. These things can’t be helped and their balanced budget it wrecked for that year.

Now, stick with this. Does it make sense for the family to argue that they can’t deliver a balanced budget for ten years because well, this was such a bad year.

I mean, next year, all going well, there’ll be no trees, no replacement of damage in the other rooms, no stay at the Hilton. To argue that just because the budget didn’t balance this year means that they can’t be expected to do it any time soon.

This is not paying off the debt. This is making sure that you don’t spend more than you earn in any given year. Living within your means, which used to be the mantra of the Liberals.

Until #Scottyfrommarketing took over and reminded them that there was almost no limit to the money they could move from the government to almost anyone once they took off the brakes. Good for the economy if you define the economy as anyone who donates Liberal.

I believe that someone was sacked for that when they worked for a government department.

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8 comments

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  1. David Stakes

    We also need to be prepared for a world that is less stable and more contested. This is why we are investing $270 billion over 10 years in our defence capability.Let that yearly spend sink in for a while.

  2. Rossleigh

    I hope letting the yearly spend sink in doesn’t include the submarines…

  3. New England Cocky

    Rossleigh, you have raised too many indictments of the Scummo Liarbral Nazional$ COALition misgovernment, so let me answer only one of them; your epiphany of traffic congestion.

    I remember as a school kid that Australia had a land area about 3,000,000 sq miles with 90% of the population, mainly immigrants of Anglo-Celtic or European tradition, but increasingly SE Asian, concentrated on the Eastern Seaboard. Seems such a waste of the ”land of sweeping plains”.

    What if a hypothetical future government took the bull by the horns and re-located many state and Federal government instrumentalities to country urban centres, growing those local populations by say 100 government jobs?

    Now economists tell us that every government job re-located to a country urban centre produces a further about 3.5 fresh private sector jobs PLUS a local economic boom as money flows into and around the urban country centre.

    If each government job supported say, Mum, Dad + two kids, that would be about (100 x 4=) 400 persons re-located to clean air and open spaces free from traffic congestion and hydrocarbon air pollution.

    Then allow the private sector to contribute at the same family rates giving a further (3.5 x 100 x 4 =) 1400 persons re-located to a healthy environment and a reduced stress environment.

    There would be almost unlimited local work available providing the housing, schooling, medical facilities, policing and public infrastructure projects; while reducing pressure on the city residential housing markets and reducing the need to dig up Inner City suburbs for Tollways for the profits of foreign owned international bankers.

    So solving the problem of CBD coffee shops declining revenues due to workers utilising the many frustrations of a third world class joke of an Internet is straight forward – simply move the coffee cafes to go with the workers to country urban centres.

  4. Terence Mills

    This from a speech given by Josh Frydenberg when debt and deficit were a fraction of what they are now :

    The debt and deficit disaster of the Labor Government—the Rudd-Gillard-Rudd experiment. They saddled the Australian people with 667 billion worth of debt—25,000 for every man, woman and child; an interest bill of 1 billion a month and climbing to 3 billion a month.

    Matter of Public Importance – Labor’s Six Years of Failure

  5. Kaye Lee

    Terence, and that $667 billion was projected for 10 years time with the Coalition’s policies of no carbon price and no mining superprofits tax. It was a total con.

    “The net debt of the General Government sector is $174,557 million at 30 September 2013.”

    “As at 31 March 2021, net debt is $587.5 billion”

    They have quadrupled the debt and are on their way to much worse than that.

  6. JudithW

    So Terence, how much does that equate to for every man woman and child? $100,000?
    Do I feel $100,000 wealthier since LNP got into power? Has someone taken my $100,000?

    And another thing – the ABC headlines call this a budget with few losers – only pensioners, the unemployed and the under employed. Clearly the invisible class now…

  7. Terence Mills

    JudithW

    We are talking about debt for every man woman and child – Kaye Lee is better at maths than I am – I just concentrate on hypocrisy and there’s a lot of that around at the moment.

    Many in the Canberra press gallery and all of the Newscorp and Sky commentators have fallen into line with government spin much like Stockholm syndrome, a psychological condition that occurs when a relationship gets too close and the parties identify and develop a strong, loyal attachment to each other and are unable to be objective or impartial.

    As far as I can see – and I may be wrong – there is next to nothing in the budget to tackle climate change and advance our move to renewables and electric vehicles yet we see money going to fossil fuels pretending that gas is a transitional fuel and quite astoundingly the wind farm and battery project up my way (far North Qld), that had received NAIF funding, was knocked back by a minister who said that it was not dispatchable energy.

    I expect to see an election in November……

  8. Williambtm

    Well, I’ll stick my head above the parapet and declare that the current Federal government is illegitimately holding the office of our leadership government as they do not govern for the best interests of the Australian people. Furthermore, this government has demonstrated that they care not about the principle tenets printed into our Commonwealth Constitution. The multi-Billion dollar Murray Darling Basin Authority has since been found to be worth little more than a crock of schitt, another scheme that has the fingerprints of John Howard spoiling the integrity of “the non-constitutional abridgment” of the Australian people’s access to the waters of our rivers creeks including all watercourses…by that treacherous rodent, yep, the former L/NP PM. https://www.abc.net.au/news/2020-09-03/the-mystery-of-the-murray-darlings-vanishing-flows/12612166 Another reason to revoke the dishonesty embedded deep into the Liberal national coalition political party is their dereliction of duty to the best interests of our nation. One will find the words written above are all quite simply correct, furthermore, we have no need for a feckless Governor-General that has become as useless as putty in the hands of the incompetent pretenders that make up this suspiciously dishonest government.

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