Karnal wrote on Jan 3^rd, 2013 at 3:18pm:



Karnal,
what's your point?
because some people are fools & live of credit cards - does that make it right?

I think you need to do some meditation.

Bobby. wrote on Jan 3^rd, 2013 at 3:16pm:


I must have missed something there Bobby, since when did OZ start taking loans, just to pay its interest?

It sounds simple, but sacking thousands of people and cutting social spending is not the best way to manage an economy. It often costs you more in the long run.

They could probably claw back a few billion from industry subsidies - I can't see what propping up Ford's going to achieve. And they should have torn up the contracts for those Collins Class subs years ago, but I guess someone owed someone in Washington a favour.

That's business. It's called politics. Sorry, politics is called business. Or vice versa. You scratch my back, etc, etc, etc.

Before we had federated nation states, we had little villages with chiefs and guards and people ploughing fields and bringing in the harvest and getting together to build houses, cook feasts and look after the kids. No one whinged about the cost of managing the economy back then. There wasn't one - there were thousands of little economic units powered by wood and potatoes and elbow grease.

Now we have a thing called the welfare state. We have an army and a public service and farmers and cooks and child care. So now we whinge.

Freewill, you see?

freediver wrote on Jan 3^rd, 2013 at 5:00pm:


Dear FD,
would you say the same for someone who's mortgage increases in size every year?

Rumour has it that Julia & Wayne are borrowing between $20 & 100 million every day to be able
to pay all the public servants & social security.

They even chase after lowly factory workers with savings for PAYG tax -
the Govt. can't wait till the end of the financial year for the extra tax money.
Also: large companies will have to pay their tax every month instead of once per year.
The Govt. is trying every trick to get more money because they are technically bankrupt
& have to borrow on the international market to make ends meet.

The strange thing is that we still have a AAA credit rating - go figure?

Bobby. wrote on Jan 3^rd, 2013 at 3:30pm:


Well, you got me there, BUT that would still be the same, whether we borrowed $1 Trillion, $1 Billion or just $1.

But, IF you want to really simplify things, it still comes back to affordability, which means it is ok to borrow, to have Debt, PROVIDING it is kept within our capacity to repay.

We, in OZ, are still at the lower end of the Debt to GDP ratio, being under 20%, so providing we keep around there or under, BUT definitely no higher than 35%, THEN we will still be keeping a responsible reign on our Debt situation.

However, there are many other countries, who are already closing in on or exceeding the 100% Debt to GDP ratio & clearly those countries have BIG problems!

Unfortunately, for us & many others, some of those countries are the largest Economies in the world & the wash up from their problems, will cause problems for everyone else. 

freediver wrote on Jan 3^rd, 2013 at 9:57am:


actually, they are no such thing. an individual would cute costs first before borrowing. A business would borro money to invest in something productive and ina shortfall, cuts costs, a govt however INCREASES costs and then says ok, lets borrow to pay for it.

not even remotely the same thing.

Quote:


All those - larger than 20% countries - were once below 20%.

freediver wrote on Jan 3^rd, 2013 at 5:00pm:


actually bobby has a fairly potent argument. You can hardly argue that we are not borroing to at least in part cover interest if we are borrowing at all. Im a small business owner and I recently extended our financing. part of that cash flow analysis involved interest payments on existing debt.