The actual inconvenient truth: The economy is a lie

21

Harry Hardrada

Australians all let us rejoice, for we will never be mortgage free!
We sold our soil and children for toil
Our homes sold to Mr Xi!

Since the GFC and the mining boom, Australia has trotted along reasonably well right? Sure house prices in Sydney and Melbourne totter precariously and may bring down the financial system. But that’s okay, nothing but a normal retreat after an exuberant rise, right? The fundamentals are solid, right? It’s been 10 years since the last major downturn, hopefully our elites have prepared for the next downturn?

Sadly, no. Federal Debt is at an all time high, and once again the RBA left rates on hold at the crisis rate, despite the fact it has been 10 years since the crisis started. The below chart shows not only the build up in Federal debt, but the fact that the government has lied to the population for 10 years, always insisting that there was a plan to stop the debt rising and achieve a balanced budget. Each of the little lines represent that fiscal year’s federal budget’s projected net debt trajectory. The solid green is what has actually happened.

As you can see, they have consistently been optimistically wrong. But is this optimisim naivety or deliberate malice by our government?

“The good times can go on forever! Don’t have replacement fertility or save money! Just keep borrowing and spending! Watch the Block every week night!”

The level of economic “prosperity” we are currently enjoying is all being underwritten by borrowing from future Australian people via state coercion. Democratic governments run by charlatans have no incentive to force any tough love or medicine on the nation. Our political class saw what happened when Campbell Newman sought to place Queensland on a sound budget trajectory. (He lost his parliamentary salary that’s what…)

White elephants like the NDIS or NBN are the equivalent of building a bonfire of the chairs you’ve been moving around on the Titanic.

The current settings also ensure that the government and RBA have no levers to pull in the event of another economic black swan event. The counter measures are already deployed to sustain this “normal”, and even in this “normal” environment federal debt is still rising rapidly.

My estimate indicates that the income tax payers in this country would have to tip in an extra 40% of their current annual income tax liabilities in order for the country to break even year on year, and Australia is already a high income tax country relative to countries like New Zealand and the United States.

This cannot go on forever.

Unfortunately for the Australian people it appears the government, public sector, unions and big business have all agreed that it is time for the Australian people’s living standards to take it in the neck in order to underwrite the evergrowing debt pile.

This is why the Federal government runs immigration at such high levels despite its electoral unpopularity. This is why we can’t fund infrastructure. This is why student debt was brought in. This is why all new property developments are selling the minimum area allowed of 360 square metre lots, or are townhouses. This is why government services have ever growing waiting lists. This is why the millennials are disenchanted. This is why the boomers don’t understand what the fuck is going on.

The political class sold the lie to the boomers that “falling interest rates = prosperity”. They then followed up this lie with a staggered asset threshold system for age pension eligibility, to incentivize oldies to spend their retirement capital on consumption in order to boost current economic activity, at the cost of intergenerational wealth.

The government forced the boomers to eat the economic seed corn.

Consider this article a warning!

Pay down your debt and prepare yourself for the end of the Australian economic utopia.

Photo by Andrea Schaffer

  • Daniel Watts

    You forgot to mention public service leeches with their year on year on year pay increases and superannuation perks. They are now far better off than the private sector slaves who actually have to perform and compete for a dollar.

    Bring on the taxpayer credit limit default.

    • Ron Mortimer

      Once upon a time, there was a trade off for public service jobs, security versus salary. Now they get both.

    • Jai_Normosone

      Maybe it’s different in different states and, while I partially agree with you on some of what you say, I can – and do – earn more money in the private sector than I have in government roles. I just stay as long as I can tolerate the utter laziness, ineptitude & internet surfing for job security because even the most useless turd to draw breath cannot be sacked from government.
      In fact, the only way they can effectively get you out is if kiddie porn is involved. Even the more-corrupt unions won’t support that cause.

  • thegentlemantroll

    We will never forget this. One day the boomers and Xers responsible for this will be in wheelchairs and we might finally be able to hold them to account. Rudd, Swan, Gillard, Turnbull, Bishop, Morrison, Shorten, they were the ones who did this. The most selfish people of all time.

    The only minister I’m letting off the hook from the last ten years is Joe Hockey. He really tried to sound the alarm when he was treasurer, but the globalist-socialist-corporatist cabal made sure to put him far far away where he couldn’t do any harm

    • thegentlemantroll

      And I’d also like to extend culpability to the so-called “conservative” journalists who cheered on this crap, namely Nikki Savva and Miranda Devine, who both maintain pretensions that they are on our side.

    • You need to start the accounting holding earlier, either to Hawke and Keating or at the very least to Howard and Costello.

  • Ron Mortimer

    The biggest racket in Australia is the real estate racket. All totally manipulated via immigration, state government land release policies and the reserve bank. Without those factors, real estate in Oz would be worth a fraction of what it is now, but the banks wouldn’t like that, would they?

    • Mattys Modern Life

      Damn right, like all bubbles this one was created by the State.

      Don’t let them blame “the market” when it crashes.

  • entropy

    Boomers have demonstrated they will keep riding the gravy train as long as they have the voting bloc to do so, while selling the country to immigrants to give the temporary illusion of sustainability.

    The most godless, hedonistic generation in history. Lest we forget.

    • Mattys Modern Life

      Watch them as they take up their pensions then cry blue murder when the system they created crashes and burns around them.

      No pensions for you boomer babies, you should have thought of that before you decided to steal people’s money to fund your own lifestyle/retirement.

      • thegentlemantroll

        Generalisations can’t go too far, but at the same time we’ve been on the receiving end of a lot of boomer flack in the media for being lazy indulgent avocado munchers. It’s good to return serve and my only regret is that the equally culpable genXers get to fly under the radar.

    • Maryanne

      Whoa there. Most boomers are aghast at what the ridiculous high rate of immigration is doing to our country, turning the once garden city of Sydney into a congested Asian shithole. The blame for this is successive gutless governments caving in to big business’ demands.

      The latter love high immigration rate because it gives an impression of prosperity, and they don’t have to “waste” any money on training workers. Back when Australian ran a national economy, the once great public utilities – water, gas, electricity country council, railway workshops – annually took in thousands of school leavers as apprentices.

      • entropy

        *Pretend to be aghast while doing nothing with their disproportionate voting block but protecting their own assets and privileges while ensuring other generations pay for the debt they accrued through higher taxes, artificially low interest rates, later retirement, superannuation, healthcare loading and immigration. The utilities you lament were sold off under your watch, your children won’t own their own homes, and you spend their inheritance overseas on holidays then expect them to pay for the pensions you never budgeted for.

        You will be remembered.

  • Mattys Modern Life

    Write more please!

    Fantastic article one of the best here in a while, totally right.

    I’ve been saying this for years debt cannot keep rising because it’s a mathematical impossibility, it needs to be paid back eventually.

    The Left/Establishment use the “governments are different to households” argument to justify it which is the right sentiment applied horribly.

    Governments ARE different to households, the difference being that government budgets are like the household budget for the nation so when it eventually crashes we all suffer tremendously.

    I’m going to keep saying this until it sinks in (for decades if need be): the State is not the answer!

    • thegentlemantroll

      Probably more likely is at some point Australia will default on the debt. When that happens our savings and currency will be worthless toilet paper

    • MatrixTransform

      Amen.

      Listening to all the gibber from Anti-Fascista youth and his big sister’s communist streak is like reading Animal Farm where the farmed are quibbling about how the meat off their backs should be divided.

      One must ask themselves the question do I own assets?

      If Yes, congratulations yr a Debt Farmer.
      If No, well then (sorry to say) but your’e the Farm.

      Orwell was a prophet

    • When governments go into debt they can lose independence.

      No government should ever have been allowed to borrow.

      When the revolution comes, those responsible for the debt should be meinkrafted.

  • 9x19parabellum

    Hope the crash comes soon and whipes out PC liberalism.

    Mark my words boomers, we will remember how you sold our futures and rode the Asian boom gravy train and over regulated to prevent us from prospering. Enjoy your nursing homes alone, cunts!

  • clemilf

    … and debt free, buy Bullion Bros! Use the currency act 1965 creatively!

  • MatrixTransform

    Boomers?
    Bullshit!

    Im a boomer (late cusp) and my parents were boomers (early cusp)
    Everybody I know in the extended family hardly have an asset between them.
    most parents aunts uncles etc…dont even own their homes.
    still carry business losses.
    Last people to own anything outright were grand parents long dead and their kids (my parents etc) picked over the bones

    You dumb-fuck gen whatever’s and millennials love to tell yourselves pretty little lies like ZOMG the boomers done screwed us all and ate the future

    Yr so fucking stupid.

    Who owns the assets? not you?

    Hmm, not me either.

    Stop buying iPhones every 2 years so that you can take pictures of cafe brunch whilst on yr Europe gap years between useless fucking degrees.

    UR so cool, Mr and Ms here’s me in Spain Running with the Bullshit.

    morons, you seem to think the universe is here to work for YOU … ha!

    LOL … yr just Free Range Debt Farms…its the exact opposite of what you believe

    Now shut up and do some work so you can get in line for the latest $1800 Samsung.

    what a pack of retards