The three sectors (public/private/external) need to balance to zero. It is impossible to have a government sector that is a net saver have the economy running a CAD, and have the private sector as a net saver. This isn't theory it's accounting fact. You sum the government surplus and the CAD together and you get the net negative savings amount of the private sector. So all that happened was the debt was transferred from the public to private sector. The end result being an overindebted household sector. If you want to, have a look at how unindebted households are in countries like Italy and Greece, in that instance the government paid for the CAD not the private sector. The result is more or less the same, it's just who has the debt at the end of the party.
I get a bit fed up with hearing the overidebted household sector is a Government problem. People want to be treated as adults when they take on a loan, yet want to be treated as a victim when they overpay for the house or investment property.
It wasn't that long ago that the avrerage family car was worth one third the cost of the family house.
Now we have the situation where the house is worth ten to fifteen times the famiy car. Yet they are still the two major expenses.
The only difference is the house became a pyramid scheme, which always ends in the same manner.
Now everyone is looking for someone to blame for personal greed and as per usual the gov is an easy target. Rather than take responsibility.
Also wasn't it Costello that said the government is running a surplus and needs to reduce the personal tax levels.
How the public reaportions that increase in disposable income is to a degree their resposibility. Isn't it?
I get a bit fed up with hearing the overidebted household sector is a Government problem. People want to be treated as adults when they take on a loan, yet want to be treated as a victim when they overpay for the house or investment property.
It wasn't that long ago that the avrerage family car was worth one third the cost of the family house.
Now we have the situation where the house is worth ten to fifteen times the famiy car. Yet they are still the two major expenses.
The only difference is the house became a pyramid scheme, which always ends in the same manner.
Now everyone is looking for someone to blame for personal greed and as per usual the gov is an easy target. Rather than take responsibility.
How does that change my point which you called the "biggest crock you had heard in a long time"?
Unless you have evidence to the contrary, it seems that the government running a surplus and doing nothing to address the decades old problem of Australia's CAD left the household sector massively indebted.
John Howard has always behaved with decorum.
Well then to your reasoning the current government must be achieving miracles, they aren't running surpluses, the CAD will increase due to increased taxes and unemployment is increasing as companies shut down.
The CAD's relationship with the household sector has nothing to do with buying overpriced property and everything to do with having to use debt to pay for Australia's imports.
CAD as far as I am aware is imports in relation to exports. If you are producing sod all and buying everything you have a problem. Then pay stupid prices for a house all becomes household debt. Still the net result is personal debt or company debt don't try and mix the two.
Australian imports still contain company expenses, which in mining and resources are huge.
Who said anything about justification?I would too, go research if you doubt.
gg is a respected authority in here and has to justify nothing.
O.K lets go back to your original statement that the gov from 1997 - 2007 caused the CAD problems resulting in household debt problems.
sptrawler said:Maybe in your answer you can explain how blowing out gov debt as is currently happening and increasing personal and broad based tax is an improvement?
Also could throw in how does making net exporters become net importers help. eg solar panel manufacturer?
I didn't say they caused the CAD problems, they have been around since the 70's. I pointed out the relationship between the Pitchford thesis and the current level of household debt. Do you disagree that the relationship exists?
This is completely non sequitir. I'm not quite sure if you're somehow trying to paint me as an apologist for the current government, something I am certainly not.
Well then why make the pointed reference to the 1997 to 2007 years if the problem is intergenerational and not government specific. Other than for antagonistic reasons?
I'll give you a hint, they started with a labor debt of $90billion of useless debt.
The farcical performance of our current (non)government is pretty much what I would have expected from any leftwing prosocialism/anticapitalism government.
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