longweekend58 wrote on Aug 16^th, 2013 at 8:45am:


1) You're still stuck in SPIN MODE Longy & you still haven't addressed the REAL & SUBSTANTIVE issues behind the Global & Local Economic collapse!
2) YOU are still pretending that Surpluses are the norm, when they are very clearly the exception, both in OZ & Globally. You refer to the Liberal history of Surpluses, which the Libs did have during the Howard era from 1995-2007. However, you disregard the facts that the 1995-2007 period co-incided with the greatest Global Economic boom of any era, as it was also the Peak Baby Boomer years AND you disregard history which says that Debt & Deficits are part of the usual role of government & have been in most countries (as can be seen at the following website), for most of the modern era!
http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
3) The fundamental problem/s facing Australia is NOT SIMPLE, as you suggest & not just bad forecasting, as you suggest, although clearly forecasting is & has been a problem for quite some time, for both Labor & Liberal thus creating a gross under-estimation of the problems we now face!
4) Your solution, as usual, is simply retsoring the OZ Economy to what it was.
THAT WILL NOT HAPPEN! IN FACT, IT CAN NOT HAPPEN, because a number of major Economic drivers have changed direction (over time - 50-60 years) and all political party's & Treasury have done what you are doing, ignoring the problems, in hope they will magically disappear.
BUT, THEY WILL NOT, THEY CAN NOT & WE ARE NOW FACED WITH A LONG TERM SYSTEMIC SLOWDOWN, WHICH IS NOW UNAVOIDABLE!

The best we can try for now, is to avoid the worst outcomes, by everyone taking their fair share of pain & by getting stuck into some of the areas I have previously referred to, those being -
a) A concentration on Productivity & I would start with reducing government by one entire level, that being Local Councils & a complete review of Government, including ALL Taxes & All Expenditures!
b) However, this will require great care on specifics, NOT AN ACROSS THE BOARD AUSTERITY DRIVE, WHICH WOULD SIMPLY DRIVE THE ECONOMY FURTHER SOUTH!
c) The thing that neither YOU NOR MAQQA seem capable of comprenhending is ALL ACTIONS & INACTIONS HAVE CONSEQUENCES and your simple SPIN WILL NOT SOLVE ANYTHING!

THE REAL LOCAL & GLOBAL ECONOMIC DRIVERS ARE NOW -
1) DEMOGRAPHICS
2) ENERGY (LACK OF SUPPLY TO KEEP UP WITH DEMAND & RISING PRICES)
3) CLIMATE CHANGE

THE ABOVE ARE BASIC ECONOMIC CAUSES, EVERYTHING ELSE ARE EFFECTS, WHICH FLOW FROM THOSE CAUSES!

You, Maqqa & others, MAY OR MAY NOT AGREE, but THEY ARE NOW THE REALITIES OF GLOBAL ECONOMICS & THEY ARE NOT GOING ANYWHERE, NOT FOR QUITE SOME TIME!!!

I suggest YOU get used to this new REALITY & stop dreaming of what used to be, Mr Longy Van Winkle! 
 

cods wrote on Aug 16^th, 2013 at 11:53am:


When you say "our problem" Cods, it seems you are saying "the Liberal party" didn't have a hand in where we now find ourselves?
However, as I have said previously, whilst the Liberal party did bring down OZ Debt during the Howard years, they did so, with the assistance of the biggest Global Boom of the modern era & frankly whilst they did a better job than many Politicians overseas, they should have & could have, done much better, as should the Labor party over the last 50-60 years!

Unfortunately Cods, IT (the GFC) IS NOT DONE & DUSTED, the GFC still has a long way to run.
Oh & I am not, putting down the messenger, nor am I name calling except for a select few who deserve what they get, because they hand it out first and even then, I am quite restrained!

Boring & childish? Yes, quite a bit of the Political banter is that!
No, I will not go to work for Rudd, Abbott nor any Political party, as they are now a large part of the problem, they are clearly nothing to do with any solutions!

Btw, I hope you got a little info on your Debt enquiry, from the following site I posted in my earlier reply to Longy -
http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

longweekend58 wrote on Aug 16^th, 2013 at 12:42pm:


Aw, I'm sorry Longy, I over-estimated  your capacity?

Your not just truly

4R's

inhibited, you are BIG TIME 4R'S INHIBITED!

The total sum of your -

R

eading
w

R

iting
a

R

ithmetic
& comp

R

ehension
is ZERO!

Oh & btw, you still haven't answered any of the REAL & SUBSTANTIVE Economic issues, BUT that's not unusual, because you have NFI what is actually happening!

Debt crisis? Truth is, there isn't one    

Date
    August 17, 2013
    The Age.

The expression making a mountain out of a molehill could have been invented for the debate about government debt in Australia.      

    So the basic fact is this: 

We hear debt is out of control and future generations will be burdened with paying it off. Rubbish.      

When the secretaries of Treasury and the Department of Finance sign off on the independent Pre-Election Economic and Fiscal Outlook (PEFO) as reflecting their officers' best professional judgment on the budget, one thing they do is model projections for the next 10 years. The results are in startling contrast to debt alarmism.


Pages 60 and 61 of the PEFO released this week illustrate two scenarios in the absence of policy changes. One accepts the 2013-14 budget assumptions by limiting real growth in payments to 2 per cent a year (which history suggests is a heroic assumption) and capping tax revenue at 23.7 per cent of gross domestic product (lower than all but one year of the period 2000-07). The other no-policy-change scenario allows rises in spending with demand and in taxes with growth in profits and incomes.

What happens?

In the first scenario, the underlying cash surplus grows rapidly beyond the forward estimates. ''Net debt is projected to return to zero in 2023-24.'' In the second scenario - in which ''spending grows in line with the demand for existing functions and if the taxation system is unchanged'' - payments growth rises to an average of 3.5 per cent a year and the tax take hits 25.5 per cent of GDP (exceeding the records of 2004-06). The result? ''Net debt would be slightly above zero in 2023-24.''

Such projections cannot be exact, but are more reliable than much of the public commentary on debt. One chart doing the rounds shows the proportion of debt accumulated by Australia from 2011 to 2014 as greater than for all OECD nations but Spain and Slovenia. Writing in The Australian Financial Review, former Howard government minister Alexander Downer cited this as proof the Rudd government has lost control of debt.

What does the table really show? And how does Australia's debt truly compare?

The first question to ask about any percentage change is this: what was the starting point? The chart purporting to show the ''facts'' on debt is a classic example of why this matters.

Every other country on the chart has a debt that, relative to the size of their economies, is much bigger than Australia's. The apparently rapid growth in Australian debt is a result of its low starting point.

As a simple illustration, which would you prefer: a 100 per cent increase in a $1 debt, or a 10 per cent increase in a $100 debt? The first will cost you $1, the second $10. No contest.

Or consider two debtors. The figures are drawn from the OECD Outlook No. 93, published in June. One, let's call her Ms Australia, has gross debts equal to 33.8 per cent of national income by 2014, the other, Mr Greece, owes 189.2 per cent. But Mr Greece started in 2011 with a debt of 178.9 per cent and Australia began with 27.1 per cent.

Voila! You have a chart that makes Australia's debt growth look much worse. But, again, which debt would you prefer to have?

Government income is tied to the size and growth of the economy, usually expressed as gross domestic product. And when we convert the debt growth shown in the chart to GDP terms, the picture looks very different. The 2011-14 debt growth is as follows: Slovenia 23.9 per cent of GDP, Spain 26.4 per cent, the UK 12.6 per cent, Greece 10.3 per cent, total OECD 9.6 per cent and the United States 8.1 per cent. Australia's increase is 6.7 per cent.

By 2014, every other country on the chart has a debt-to-GDP ratio between 1.25 and 5.6 times as big as Australia's. The chart's ''best'' performers, Germany and Switzerland, are cutting debt but, relative to GDP, still owe significantly more than Australia does. Commonwealth debt is equal to about 10 months' revenue - most mortgage holders can only dream of such a burden.

The chart seems to have its origins in an article in The Australian Financial Review by economist and former Reserve Bank board member Warwick McKibbin. He presents data for all OECD nations and also notes Australia's gross government debt is the third-smallest, after Luxembourg and Estonia, and much lower than the rest. ''The problem is not that Australia currently has a debt problem,'' he acknowledges, but ''it has a problem with the nature of spending and taxation''.

McKibbin's legitimate concern is that if current imbalances are not corrected and debt-based funding is not invested productively, we could develop a debt problem.

So the basic fact, which is well documented, is this: Australian government debt is low and is not out of control.

The picture looks even better when one realises the OECD figures are for general government debt. Other tiers of government owe about 40 per cent of our debt, so the Commonwealth's share equals 20 per cent of GDP.

But wait, there's more. The OECD figures are for gross debt. As any borrower and any lender should know, debt is assessed against

Is Debt Out Of Control In Australia?

Simple question? Actually NO!

The reality of THE CURRENT SITUATION is that NO DEBT IS NOT OUT OF CONTROL!

However, given the basic Local & Global Economic Drivers, IT QUITE POSSIBLY COULD BE, GOING FORWARD!

That said, the fact is that in the Real world, Economics has a time & a place for both Deficits & Surpluses.

Normally, in modern Economics, it is a complicated world and it is certainly not as simple as "you must always run at a Budget Surplus", BUT "nor can you always run at a Deficit".

Pretending that Surpluses are the norm, when they are very clearly the exception, both in OZ & Globally, is misleading. The Liberal history of Surpluses, which the Libs did have during the Howard era from 1995-2007, disregards the fact that the 1995-2007 period co-incided with the greatest Global Economic boom of any era, as it was also the Peak Baby Boomer years AND it disregards history which says that both Debt & Deficits are part of the usual role of government & have been in most countries (as can be seen at the following website), for most of the modern era!
http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

cods wrote on Aug 17^th, 2013 at 4:21pm:


Cods,
Let me make a statement & pose a question, so YOU can think about an answer to your own question.

We, both Australia & Globally, have just had a substantial "BUMP", as you put it, to the Global Economy, which has been working its way down from the weaker Economies (including Europe & the USA), who were the first to be hit, to the stronger Economies, such as China, OZ & a few others.

My question is, WHAT DO YOU THINK WOULD HAVE BEEN THE EFFECTS ON AUSTRALIA, IF STIMULUS MEASURES HAD NOT BEEN TAKEN (admittedly, some could have been implemented better, with time & hindsight) & OUR ECONOMY HAD BEEN LEFT TO MEANDER ON ITS OWN OR WORSE STILL, IF A GOVERNMENT HAD IMPLEMENTED AUSTERITY MEASURES?


And, to avoid the likelihood of some obvious comments, from some, I have already indicated that Debt can not simply be allowed to escalate, out of control.

I have also indicated that specific measures will be required to increase Productivity, that the Tax, Expenditure & the whole of government systems, will need a complete review, with some tax increases (including business) & some "entitlements" will have to  be reduced &/or done away with completely!

Oh & btw, that BUMP in the Economy, commonly referred to as the GFC, is far from finished, it has a long way to run yet & it will become a much deeper Local & Global slump, before it is finally ready to finish!

longweekend58 wrote on Aug 17^th, 2013 at 8:00pm:


The "truth" Longy?
You & your SPIN wouldn't know the truth, IF IT BIT YOU ON YOUR ASS!
I don't deal in spin, I deal only in Reality & Reality is not reside in your "head space"!


Try answering one straight forward question -
MUST &/or CAN, every year be a SURPLUS YEAR?

Maqqa wrote on Aug 17^th, 2013 at 2:56pm:


Maqqa, Maqqa, Maqqa,
What you fail to say, in your SPIN, is that most governments, both here & overseas, including most past Australian Liberal governments regularly run up Deficits & Debts, as part of the standard government modus operandi.

The Howard Liberal government being one of the exceptions, albeit that they ran up Surpluses during the greatest Global Economic BOOM in modern history and whilst they did so, they should have done better, given those boom years!
But, to give credit where due, as I have done previously, the Lib performance during those Peak Baby Boomer years, was better than 99% of what most overseas Politicians achieved!

In addition, the current Labor crowd also took office as the worst Global GFC in at least 80 years was commencing and as such AUS-terity had to stop & Stimulus measures had to start, otherwise the outcomes between 2007-2013 would have been substantial worse!
That is not to say that Labor did a great job, as they certainly made some errors!