I suspect that the reason why Rudd is so popular, is that he is appealing to both ends of the economic spectrum - whether they are economic libertarians or social libertarians, Rudd is positioning himself as more than Howard in either direction.

He can't be both of course - either he's more economically conservative or he isn't.
Cont'd -

Though, I tend to think that it's possible we'll end up with better government regardless of which direction.

If it turns out he's in favour of social libertarianism, then perhaps we'll see more emphasis placed on infrastructure and services. If he's a genuine economic libertarian, perhaps he'll give us less pork barrelling and a genuine small government, as well as small 'l' liberal social policies.

In any case, Rudd is letting the punters see what they want to see. It will be interesting to see what he actually is - though despite his rhetoric, Howard hasn't embraced the better aspects of either economic ideology, and thus isn't really a viable proposition at this point.

Dear AJFA
I am familiar with that argument but that just describes one way by which the debt is distributed within the country.

The country's debt is incurred when a bank tries to exchange Australian currency to purchase imports and no foreign bank has sufficient AUDs because we have not exported enough. The Australian bank is then forced to borrow the remaining foreign currency and is stuck with the associated Australian dollars. Now the Australian bank needs people to borrow from the bank and take on the interest burden this causes two problems:

1. Our interest rates must remain high that is higher than that of the US; and

2. There is a glut of credit which has resulted in people bidding up the price of real estate to ridiculous and unfordable levels and people are also able to purchase more imports closing a vicious circle and adding to our "prosperity".

This credit glut has resulted in the US sub-prime loan crisis (the US runs unrealistic Current accounts also) Australian for "sub-prime" is "no doc".

These are similar to the conditions that existed in the "roaring twenties" but at that time the major creditor was the US. We all know what happened when the "roaring" ended.

This debt has increased continually for the last 32 years before that (1975) there was a balance, one quarter we made repayments another we borrowed. This debt is now way too big.

When the Chinese slaves are emancipated and the overseas lenders realise that they have Buckley's of ever seeing their money (as they almost did in August) we will have the depression we had to have.

The next government will cop the blame.

AJFA cute! but rubbish your side of politics used the foreign debt to flog ALP federal governments!
Now you distribute the blame to every one, the thread was propaganda but it has become Howard like.
Not me mate! blame him! you are welcome to my election night party but bring your own drinks, and hanky's.

Dear Brightspark,

Firstly, banks are in the business of borrowing and lending money, not purchasing goods and services.

Secondly, foreign debt has always flucuated, although I'm certain that it is higher than ever before in dollar terms. The question is to what % of GDP does it lie at? I'm sure its fairly high at the moment, but not nearly as high as France's national debt, which is quite different to foreign debt (public vs private debt).

Foreign debt levels tend to flucuate with the business cycle. I note that all the borrowing has pushed up interest rates, but the Reserve Bank is also partly responsible for that. Essentially, increasing interest rates will result in less borrowing, because it becomes less afforable, and hence will reduce foreign debt levels in the medium term.

Australia has always been a net borrowing country. Thankfully, however, we do have the super fund to partly offset this. Many credit this as a major cause of our economic success over the last 12 years.

Oh I almost forgot.

Belly, name at what time and where and I'll consider it.

Sorry I withdraw the invitation! we would not get on.
But are you aware that super you talk of has much to thank the ALP for?
That Hawk and Keiting had to fight your side to get rises in super?
That in stopping higher payments of super conservatives may have hurt this country's retirees?
Super under the ALP plan was a step in saving this country billions of dollars, in self founding retirement.
And you attempts to hide the importance of our balance of trade deficit are not convincing.
IN FACT Labors claims when in office had been exactly the same as yours , your side and Australia, even me then did not except it was an answer then or now.