On Thu, September 3, 2015 10:17 am, Peter Ross wrote:
Playing a devils advocate;-) Having decades of unbalanced cash flow is not healthy either. If I have to borrow _more_ money every year, I will come into trouble, sooner or later.
The traditional Keynesian approach for governments was spend when the private sector is doing poorly, and save money when the private sector is doing well. In part this was replaced by neo-Keynesian "tax and spend" approaches which, rather sensibly, suggested that the public sector could remain in debt as long as its expenditure was on various infrastructure that, through enhancing positive externalities and mitigating negative externalities, increased aggregate wealth. The biggest problem with this is of course ensuring that governments make the *right* investment decisions.
Anyway, Australia is not Greece(yet). But it forgot to use its good run to improve the balance, and invest in its future.
Whilst our total debt is quite high, most of this is (or rather was) private debt. The public debt was a relatively small percentage of the total debt. I must confess that I have checked this recently - I have the horrible suspicion that this situation has changed somewhat under the current Federal government. -- Lev Lafayette, BA (Hons), GradCertTerAdEd (Murdoch), GradCertPM, MBA (Tech Mngmnt) (Chifley) mobile: 0432 255 208 RFC 1855 Netiquette Guidelines http://www.ietf.org/rfc/rfc1855.txt