The other day I watched Martin North and John Adams on their YouTube video called “In the interest of the people”, in which they gave some insight into the scale of the debt catastrophe the country faces after chucking money willy-nilly at “eradicating the virus”.
Large amounts always seem a bit unreal to me, imagining a Trillion dollars of debt is a bit mind boggling so I thought I would do a rough, simplistic analysis of repayment times and total cost. Just remember that I am an engineer and not too good at nuance, so the economic purists of Catallaxy, (of which there are many), might smile a bit at my naivety but the object is to try and see how big the paddock is.
I looked at 4 options for repayment of the debt and used the insanely optimistic assumption that interest rates would stay at around 2% forever. (PS, I know they won’t).
Here is my summary:
John Adams made the point that the recent budget made no mention of any scheme to repay this money. The focus was on generating enough cash flow to service the debt, so in essence Australia is in the situation of having an “interest only loan”, the sort that the government and regulators frowned upon a year or so ago.
This mornings “Australian” carried a front page story where the head of Treasury said “government spending will need to be reined in” and that “budget repair would be considered at an appropriate time”. I would suggest that the appropriate time to look at how we might ever get out of this mess is now.
If we re-paid a modest $10 Billion off the principal every year then the total would be repaid in 100 years, (2121), and the total cost, (in today’s money), around $2.01 Trillion. Mind you, when interest rates rise all bets are off.
The clowns who let this happen do not deserve to govern. They do not have the financial acumen to return a profit from a pub chook raffle and have sold future generations down the river with their incompetence. The scary thing is those waiting in the wings for Act 2 are worse.
Maybe it is time to make some hard decisions. First up, we might do better without the states. One mob of fools is one too many but we have another 8 mobs each pursuing their own brands of idiocy. It’s a noncuple cluster f*ck. Next we need to stop the quest for “nett zero emissions” and recognise that our coal reserves are a national asset, that thermal power stations are the best technology, that renewables are a confidence trick that enriches the carpetbaggers and ruins the grid reliability.
We might look at the submarines, (again), and perhaps recognise that if anyone wants to invade us the only thing we can do is KYAG. Perhaps the Swiss model of governance might suit us better than the abomination we have now with two groups of incompetent no-hopers vying for our vote.
We should also have a think about whether our “democracy” is serving us well. The theory is that governments govern with the consent of the people but history shows that we can get stuffed until it is election time. Maybe we need to recognise that the political process has been hijacked by 2 organisations who think that it is their right to “govern us”.
I find it infuriating that future generations will carry this debt burden. In the “Covid crisis” in Australia we had around 30,000 “confirmed cases”, (diagnosed with a test that could get a result from a bit of dog poo), and just under 1,000 people died. Let’s consider that all this debt can be justified as “saving people from the virus”. If that were so, and we considered that the 29,000 cases that lived were saved by the debt then each life cost the country $69,310,345.00.
And they still want to tell us what to do.