Comments on: Park the Debt Truck!

By: Blame Greece's Debt Crisis on the Euro

Blame Greece's Debt Crisis on the Euro — Thu, 18 Feb 2010 07:19:22 +0000

[...] opposition, Malcolm Turnbull, began attacking the government’s stimulus package, I argued in “Park the Debt Truck” that there was very little reason to be worried about Australia’s public [...]

By: Jobs business

Jobs business — Sat, 08 Aug 2009 13:15:46 +0000

The graphs of the debt look interesting. The government debt has come down and the household income has gone up. But how about the GDP ratio vs per capita income. Has that also gone up.

By: Deleveraging and Property Prices | A Stubborn Mule's Perspective

Deleveraging and Property Prices | A Stubborn Mule's Perspective — Wed, 22 Jul 2009 07:38:22 +0000

[...] household debt, most of which has been in the form of mortgage debt. The next chart is taken from Park the Debt Truck!, a post which looks at trends in Government and household debt in Australia. The highlighted [...]

By: stubbornmule

stubbornmule — Mon, 20 Jul 2009 01:31:54 +0000

Paddy: this earlier post has some international comparisons of Government debt, but I agree that some comparisons of private debt would be enlightening too. As for the "right level" of debt, that is a harder question as you say. I'd see Government debt as simply an outcome of the economic cycle, so there is no right level. Governments can spend too much in a given period if they go over and above levels to compensate for inadequate private sector demand, but if the economy stays weaker for longer, debt will rise further, but it will eventually fall again once conditions improve. As for private debt, there must be an upper bound (unlike Governments there is a hard income constraint). It's hard to say what the right level is, but I'd say it has gone too far of late.

By: Paddy

Paddy — Mon, 20 Jul 2009 00:14:37 +0000

The long time-series is great for persective. But there are two other things that would also aid understanding. First, what is out debt (net national/private/public) in relation to comparable nations, and second, what level should debt be? The former is well within the mules paddock – data hound that you are. The second is a terribly hard question, but your thoughts would be welcome.

By: stubbornmule

stubbornmule — Sat, 18 Jul 2009 06:57:50 +0000

I have added a link to a Paul Krugman opinion piece where he argues that government deficits saved the world.

By: stubbornmule

stubbornmule — Fri, 17 Jul 2009 07:38:30 +0000

@had enough: I may be happy for the Government to attempt to boost a flagging economy, but that doesn’t mean I’m ready to throw myself on the bosom of Kevin for all my wants and needs.

By: had enough

had enough — Fri, 17 Jul 2009 07:31:58 +0000

you say, dont be afraid of government debt. government can never run out of money, simply just print more.thats FANTASTIC.,we should all give up slaving for the goverment,..banks ,..and all the other parasites,and let the m look after us for a change. geeeeee im stupid

By: stubbornmule

stubbornmule — Fri, 17 Jul 2009 03:11:32 +0000

APJ: you're not wrong about the lack of understanding out there! It reminds me of a piece in the AFR last year about Costello's lack of understanding of RBA market operations. For those without a subscription, here is a snapshot of the article.

By: APJ

APJ — Fri, 17 Jul 2009 02:30:31 +0000

The Libs like the shock and awe debt truck tactic because it caters to the muppets out there who, unfortunately, believe every headilne they ever see. They’ll believe “debt truck” with the same vigour they absorb the “Human bat child found in cave” – type of stories. You can call the average Aussie many things, but one of them is not a rigorous scrutineer of the facts. Costello was tremendous at this, because he is a great understander of base instincts, and taps into the vein of the average ounter whoe 2nd job it seems is to be professionally outraged at just about anything. Never a man for the big picture, or a great thinker about how the financial system actually works, he would latch onto “Labor’s debt” repeatedly when trying to nuke the government bond market. Thank God he didn’t succeed given recent developments, and the strategy of buying bonds at intergenerational lows in yield (2003) and selling equity that had tanked (Telstra) was never that bright an idea. In squandering a terms of trade-induced budget surplus bonanza on tax cuts and not infrastructure (and dragging in the “politically captured” jackoffs in State politics), he has consigned finances to a much poorer state in the longer term, and contributed to the personal debt problem you note above. As a Treasuer, he was the SIV of the political sphere – an approach that works in good times, but which fuels imbalances and gets reamed when things turn down. If only we could ave a Treasuer interested in what the portfolio should deliver – stabiliy – and not uninformed pettiness. Unfortunately, we still don’t have one….