How to handle debt the Australian way!

[Johnsy]

It's a slow day in a dusty little Australian town. The sun is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.
On this particular day a rich tourist from US is driving through town, stops at the local motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
The motel proprietor gives him keys to a few rooms and as soon as the man walks upstairs, the owner grabs the $100 bill and runs next door to pay his debt to the butcher.
• The butcher takes the $100 and runs down the street to repay his debt to the pig farmer.
• The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.
• The guy at the Farmer's Co-op takes the $100 and runs to pay his drinks bill at the local pub.
• The publican slips the money along to the local pr-stitute drinking at the bar , who has also been facing hard times and has had to offer him "services" on credit.
• The hooker rushes to the motel and pays off her room bill to the motel owner with the $100 .
• The motel proprietor then places the $100 back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything.
However, the whole town is now out of debt and looking to the future with a lot more optimism.

And that, ladies and gentlemen, is how the Australian Government is conducting business today...

 

[Hedgehog]

I can only say Magic, sound's like that really works in it's own funny way

 

[Johnsy]

Yes, it would be funny only our labour government thinks that is the way to run an economy. They came into power with a massive surplus. And two years later we are in more dept, then the country's been in since federation.

 

[2054172]

don't blame the labour govn't , blame the world bankers and how they try and run the world.

 

[Johnsy]

don't blame the labour govn't , blame the world bankers and how they try and run the world.

Australia didn't have to spend so much money to avoid the financial crisis. It hardly touch us down here. And not only did they spend too much money, they spent it the wrong way. The Labour Government have a surplus of $22 Billion, we are now in debt for $200 Billion, and they didn't have to bail out any banks or businesses. We didn't even have a recession here. Here is what was said by Ross Greenwood of Money News.

"THIS MAY VERY WELL BE INDISPUTABLE!
NO MATTER WHAT YOUR POLITICAL LEANINGS.
Right now the Federal Government is at pains to tell everyone - including us the mug-punters and the International Monetary Fund that it will not exceed its own, self-imposed, borrowing limits. How much? $200 billion.
And here's a worry. If you work in a bank's money market operation, or if you are a politician, the millions turn into billions and it rolls off the tip of the tongue a bit too easily. But every dollar that is borrowed, some time, has to be repaid. By you, by me and by the rest of the country.
Just after 5 o'clock tonight I did a bit of maths.
But it's so staggering its worth repeating now. First though, here's what Prime Minister Rudd has been saying about - what he calls - these temporary borrowings.
Remember these words: Temporary Deficit. But the total Government debt could end up around $200 billion. So here's a very basic calculation ... I used a home loan calculator to work it out ... it's that simple. $200 billion is $200,000 million.
The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of 20 years.
Now here's where it gets scary ... really scary. The repayments on $200 billion come to more than one and a quarter billion dollars - every month - for 20 years. It works out we - as taxpayers - will be repaying $154 billion in interest and principal every year ... $733 for every man woman and child - every year. The total interest bill over the 20 years is - get this - $108 billion.
Remember, this is a Government that just 18 months ago had NO debt. NO debt. In fact it had enough money to create the Future Fund to pay the future liabilities of public servants' superannuation ... and it had enough to stick $20 billion into the Building Australia Fund last year.
A note that was sent to me which explains that the six leading members of the Government from Mr. Rudd down, have a collective work experience of 181 years, but only 13 in the private sector.
If you take out of those 13 years the 11 years were spent as trade union lawyers, of the 181 years only two years were spent in the private sector.
So the people who will rack up a net Federal debt of a minimum of $188 billion, the highest in our history, have virtually no experience in business.
So out of those 181 years:
- no years spent running their own business
- no years spent starting their own business
- no years spent as a director of a family business or a company
- no years as a director of a public company
- no years in a senior position in a public company
- no years in a senior position in a private company
- no years working in corporate finance
- no years in corporate or business restructuring
- no years working in or with a bank
- no years of experience in the capital markets
- no years in a stock-broking firm
- no years in negotiating debt facilities with banks
- no years running a small business
- no years at the World Bank or IMF or OECD
- no years in Treasury or Finance.
But these people have plunged Australia into unprecedented debt, and now threaten to torpedo employee share schemes which they plainly don't understand. Well, in a way you can't blame them. It's clear the electorate did not do their homework, because the Government is there by right."

That was from one of our most respected money men.