Australia’s economic outlook will not improve until the Government “shifts direction” and recognises the current financial crisis was caused by far too much money being loaned irresponsibly.
“The problem is you’ve got to cancel that debt either by abolishing it formally or by trying to refloat the economy and cause inflation and reduce the debt burden, but we’re still at least a year or two away before that realisation will sink in,” he said. – Dr Steve Keen (Australia facing debt-driven depression, ABC News)
Berno: Countries around the world are aggressively trying to “refloat” their economies by both fiscal and monetary policies. These measures include reserves banks interests rate cuts, banks re-capitalisation, special loans scheme to smaller businesses and handouts to boost domestic spending.
I am worried that we are spending too much resource to fight the first symptoms of the global depression. How much debt/ deficit can a country sustain? Federal interest rate is now at 0-0.25%. Debt got us into the current mess, how would more debt get us out of it?
Many in the government are emphasising that we are in unchartered territories. Should the situations worsen, would we be depleted of resources and programs to fight it?
Related links: Rudd’s $42 billion ‘nation building’ plan’ (Sydney Morning Herald)