http://www.tradingeconomics.com/aust…/households-debt-to-gdp (look at long-term comparison -- unprecedentedly high)
http://www.tradingeconomics.com/australia/balance-of-trade (look at long-term comparison -- essentially unprecedentedly high right now, and significantly higher than it was during the mining boom, when it was, for a few short periods, almost unprecedentedly low)
http://www.tradingeconomics.com/australia/balance-of-trade (look at long-term comparison -- essentially unprecedentedly high right now, and significantly higher than it was during the mining boom, when it was, for a few short periods, almost unprecedentedly low)
Both these deficits mean that the government basically can't run a surplus. Like, it just can't. If it really tried to massively slash funding and massively bump up taxes, that would guarantee a recession pretty much straight away. It is not hard to understand why: when the government takes money out of the economy (which is what it means to reduce a deficit), the only thing that can compensate is, of course, extra private sector activity. But private debt is too high, interest rates are already really low, and when you've got a big trade deficit as well, there's just *no way* the private sector can save us. What we all really need, of course, is a debt jubilee -- also known as "QE for the people". But, sadly, I don't think that's really on Morrison's agenda.
And don't say, "But Howard ran a surplus". When Howard ran his famous surpluses, the trade deficit was very significantly lower and house-hold debt was very significantly lower, which meant that the latter had significant 'room to move'. This room to move fueled the continuing inflation of asset bubbles, and this property boom was a major driver of the economy, along with the beginning of the mining boom (which really dropped the trade deficit).
These are the facts. They are important, and we should take notice of them.
And don't say, "But Howard ran a surplus". When Howard ran his famous surpluses, the trade deficit was very significantly lower and house-hold debt was very significantly lower, which meant that the latter had significant 'room to move'. This room to move fueled the continuing inflation of asset bubbles, and this property boom was a major driver of the economy, along with the beginning of the mining boom (which really dropped the trade deficit).
These are the facts. They are important, and we should take notice of them.
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