Nov 16, 2012

Confecting cataclysms to score political points

The same myths keep getting peddled by critics of the Australian economy desperate to find something to bag the government for, write Crikey's Glenn Dyer and Bernard Keane.

“Cataclysmic”. We all know what it means, don’t we? Don’t we?

According to yet another breathless front-page report in The Australian Financial Review yesterday, Australia is on the same path as Spain according to ratings agency Standard and Poor’s. How so? Is our unemployment at 25%? Are we unable to raise capital in international markets except at an exorbitant price? Is our social fabric starting to tear under the demands of austerity?

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One thought on “Confecting cataclysms to score political points

  1. Dogs breakfast

    No doubt about it, Australia is in a terrible position.

    Except in comparison to every other country on planet earth.

    There seems to me to be one, maybe two glaring weaknesses that may or may not do us in. One is the huge cost of housing in capital cities and the fact that everyone is mortgaged to the hilt, and the corollary that the banks would be left with a lot of worthless mortgages in the case of a serious downturn, and therefore the banks would be bailed out of their stupid positions by the taxpayer – as per so many countries.

    The second is that we never seem to have a current account surplus. I pray that the largely private sector debt has been well used and is sustainably being paid off. One day I would hope that the country actually makes an international dollar or two.

    The plus side is that somewhere, I don’t know exactly where, we have trillions of dollars in superannuation squirrelled away.

    Blimey, one looks like a solution to the other, doesn’t it. Must be one of those ‘simple answers to a complex problem that is elegant, neat, and wrong’.

    Either way, if Australia is struggling with a AAA rating then it is high time that the debt rating system was abandoned as a bad joke.

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