Aidin,

if an agreement emerges between major countries in the future to write off debt as a solution, which may indeed happen, this undermines the capitalist system by telling borrowers they need not pay, and investors to be even more wary who you lend to.

Without the normal boom and bust cycles, where is the discipline to tell individuals, companies and nations to live within your means.

And the longer it goes, the worse off will be the ill effects which will come from a major depression which will leave many people struggling.

Another effect is that the current trend clearly rewards the well off most through home ownership and shares, which will further undermine confidence in the system and maybe even promote rogue ideas and sentiment.

Now people with savings are penalised by having their real value undermined by zero interest rates against inflation.

I am not a genius, but a good start by our political leaders would be to admit that we face major economic problems

Chris Lewis,
Such an agreement would not undermine the capitalist system at all - firstly because most countries already have bankruptcy laws, and secondly because debtors have always been free to negotiate with their creditors.

If you think you need boom and bust cycles to get people, businesses and governments to live within their means, then maybe you should reconsider the case for living within their means. But first you should be clear what that actually means - if you think it means avoiding borrowing, think again!

Even this year, with huge shutdowns, Australia avoided a major depression. They're actually quite easy to avoid, and also easy to get out of.

High share prices are a good thing; they enable businesses to cheaply fund their investments. High house prices are more of a problem. Land value taxation is the best solution, though this would have to be phased in over many ears to avoid unduly disadvantaging existing homeowners.

Do we really want to encourage people to hoard money?

of course Australia avoids large recessions, twice now by spending billions and billions of money through debt. increases debt burden on future generations.

You reckon that is an achievement, anyone can do that if they have the purse string through govt.

Whoopee do.

and they do so now through zero or negative interest rates.

as for me, i do live within my means. not interested in the share market.

and I live comfortably.

one more consequence of the huge explosion of debt in last twenty years.

Who is that has benefited most in national terms from debt in a world of increasing economic interdependence, it is China under the CCP.

Chris Lewis,
>of course Australia avoids large recessions, twice now by spending billions and billions of money through debt.
And we have the ability to do it an infinite number of times.

>increases debt burden on future generations.
No it doesn't. Future generations have no obligation to eliminate the government's debt.

>You reckon that is an achievement, anyone can do that if they have the purse string through govt.
But not everyone did.

>one more consequence of the huge explosion of debt in last twenty years.
>Who is that has benefited most in national terms from debt in a world of
>increasing economic interdependence, it is China under the CCP.
Right... because while those running other countries were spreading lies like "we have a debt and deficit disaster" and "future generations will pay if the government doesn't balance its budget now" those running China were doing the sensible thing and investing in making their country more productive.

Aidan,

I am glad you see no problems ahead.

It is great that some people need not stress about the future.

I think it is a world of make believe that you talk about, but I hope my pessimism is proven wrong.