Most politicians seem capable of only learning lessons the hard way. A likely double dip recession, further credit rating down grade and yet another game of chicken over the debt ceiling seem inevitable given the hard line, ideological positions taken up by the major parties.

Perhaps there is a glimmer of hope that within the next few years, Tea Party advocates and liberals may eventually find a common enemy for massive cuts: the system of broken federalism where 3 states are already in debt default and others teetering on default. The solution could be USA reinventing itself as the United State of America with just the Congress legislating for all Americans, the President maintaining the nationan's check and balance but with all state legislatures and the US senate wound up. Government service and infrastructure delivery deligated to City Governments to national quality and performance standards.

A streamlined government could be just the ticket to enable some desperately needed long term strategic planning by the USA whilst massively cutting over a trillion dollars annually from their bloated and dysfunctional federal system of government. It's an approach that could do wonders for Australia's productivity as well.

Antiseptic I know it was satire and stated so a couple of comments later.It would has lost its' impact had that been made obivious.I see no reason to change my views.Benanke is destroying the US economy by counterfeiting the peoples' money.You cannot solve a debt problem by creating more of it.They need a Glass Stegal Act to triage the derivatives.Cut the spending and end the Fed.

It would be really interesting to see someone do the numbers on what America's position would be like if run "the Australian way". Whilst our debt levels are disgraceful given the position that we were in and the lack of need in hindsight for the spending spree, we are still in great financial shape compared to most countries in the world. Some of that has to do with the resources sector, but not all of it. It would be a mammoth task but it would be an interesting exercise to see if a country the size of the US would be more effective run the way we run a country.

Country Gal,
You are correct. Australia is very much in debt.

With a population of 300 million, the US has external debt of $14.3 trillion.

With a population of 22.6 million, Australia has external debt of $1.169 trillion.

Per capita, the external debt of Australia is higher than in the US.

As % of GDP, the external debt of Australia and the US is equal at 95%.

Not a great record for Australia, and we are very lucky to have so much coal and iron ore.

The US economist Henry George in 1879 proposed the replacement of income tax with a tax on land values. This has been tried in many parts of the world with somewhat beneficial results, including in Australia. The effect of this tax is to cause the speculation in land values to cease. This brings more land into use which in turn causes its competitive cost to reduce. This then reduces the cost of producing goods and causes more of them to sell and this encourages more activity and less unemployment. Today without LVT a few greedy land monopolists are the reason for the lack of full employment and the slump in businesses. They do nothing but benifit from the tax payers invested money (by government) in the surroundings.
TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!