Aiden,
Public debt is important, particularly in relation to trade, interest rates, etc, etc as others have pointed out to you.

Currently private debt is of far greater concern, it is running at about 120% of GDP and rising fast. Too many people have too much debt, some with repayments exceeding 150% of their annual incomes, this rapidly results in disaster, and one reason so many people are in a debt trap spiral which they cannot resolve, short of selling their assets and having to start again from scratch. In fact, per capita, Australian households have the highest levels of private debt in the world.

Additionally, Australia's economy is turning toward a deflationary death spiral, with the "knowledge and innovation economy" espoused by the coalition government, in my opinion, going to delivery little if any boost to the real economy, just more hot air and dreamt up economic voodoo.

You need to realise that since about 1913 the value of our currency has dropped by about 97%, however the remaining 3% fall to come is still a 100% fall from where we stand today.

Interest rates are headed toward zero (0) and a government hell bent on grabbing our Super by any means and a long term fiscal disaster for all, no matter which party is in power. Hold on tight the ride is about to get very bumpy.

Aiden,

Lets say I find a new continent and inhabit it and I want money on my continent.
So I have to borrow it. My new currency is called 'Aiden's'.

So I go to the central bank and they print for me 1 million 'Aidens'.
I've got to give them bonds from my new government on my new continent.
Say the bonds pay 2 percent.

So I've got 1 million 'Aiden's' in the government account.
I also have interest liabilities of 20,000 Aidens p/a.

I CAN NEVER PAY BACK THE DEBT CAN I?

How can I pay back the 1 million and 20,000 'Aiden's'
IF THERE ARE ONLY 1 MILLION AIDENS IN EXISTENCE??

Tell me has anyone EVER paid back the debt?

Now lets look at our economy,
No manufacturing jobs, more welfare, higher food and energy costs and less discretionery income to buy things.
How is the private sector ever going to improve?

And how the hell are we going to pay back a trillion dollars?
Because thats where its headed?

You seem to think that somehow shifting digits to different columns will save us.

But I'll tell you something else.
Not everyone cares about our debt.
Many in fact are sick and tired of hearing about it.
I've heard about the countries debt like a violin my whole entire life.
A cracked bloody record that never stops.

If debt is 'Business as usual' people switch off, people don't care.
If you're so keen to borrow, you can start paying my share of the interest as well.
I'd rather the government just give it to me straight and say we're broke.

Aidan, you still don't get the point. You keep on mentioning government debt, whereas the major proportion of Australia's debt is private debt, mostly carried by our banks. The main vehicle is 6 month US Dollar certificates of deposit, which are auctioned regularly by the banks as they roll the debt over. Do you remember a mortgage entity called RAMS? They ended up bleating that no-one would bid on their certificates, and that they had a large amount maturing in the New Year. I believe they ended up being purchased by Westpac for $1.

Due to our sainted Johnny Howard, who left office with no government debt, our government debt is still not too high, despite the strenuous efforts of Gillard and Rudd. Not having any government debt is reckoned as the main reason we escaped the 2008 crash so lightly.

What interests overseas investors is our total debt, and the likelihood of them being repaid. They are not going to buy $A debt if they think the $A will collapse.

We therefore need to live within our means by cutting the living standard of ordinary people.

Far be it from me to correct a political expert I actually respect, Don, but this still reads strangely to my eyes- and I cut and pasted your final words:

. ..After all, as more than one politician pointed out, there are other countries worse off than ourselves. We can’t we be like Greece…

Yes?

Well Malcolm appears to have a slim majority anyway. See how he goes with the Hansons of this world. Hope she doesn't get confused with Hanson-Young! What a pair they will be on the cross, cross benches!

Waverley,

Oh my goodness! A typo, and I didn't see it several times. I meant to write 'Why can't we be like Greece...'

Thank you. I'll correct the error on my website, but I can't do it here.

Aiden -

"The debt problem is imaginary. Instead you should look at the deficit, which has real effects which vary enormously according to where we are in the economic cycle."

Our debt problem is imaginary? Really!

Just where are we in that fictitious economic cycle - with debt approaching $trillion?

50% of Australians currently don't pay tax, with figure growing.

Keep a close watch over the next four years then come back to us with more implausible theories on fiscal policy.