SM where do you find that govt' borrowings affect bank borrowing.

579,

Other than Basic economics, the last one to make that connection was Wayne Swan. As this was the basis of the thread, where were you?

Whine Swan spent 4 years racking up debt and claiming that it had no effect on interest rates. Now he is claiming that it is vital to get to surplus to reduce the pressure on interest rates. He is either lying now, or was lying then.

Swan wants a surplus to encourage the reserve bank to cut rates, but that will not guarantee the mortgage banks will cut their rates.
The banks borrow money from overseas at higher rates now after the GFC,
These rates have nothing to do with national debt.
There is a bigger chance banks will again raise mortgage rates for new loans.
Your previous post blamed wasteful spending for the banks borrowing rates. Can you explain that.

579,

In small words for the economically challanged:

The government is borrowing $100m per day, $17m of which is interest on existing debt, competing for capital with the private banks. Then while the country's debt is low compared to other nations, it is still increasing, and there is no sign that Labor is able to control it.

The overseas lenders with limited resources are thus able to charge far more for money going to Australia.

Your explanations have as much credibility, as abbott and the fat boy.
Your story keeps changing, so this doesn't have anything to do with treasury, you are saying.
Wouldn't you think the banks would go somewhere else if there was any credibility in what you say.
Our banks are govt; guaranteed.
There is no link between national debt, and bank borrowings. The banks are paying more for finance now, since of the GFC, overseas borrowing has become limited, and so charge more.

No credibility! this is first year economics.

Also bit rich coming from you 579 you are clearly economically illiterate. I would take a wild guess that you have no university education at all.

That Wayne Swan is drawing the link with government borrowing and interest rates in spite of denying it earlier, means that the lesson must have been drummed into his skull. When the government competes with industry for manpower, land, loans, etc, it always pushes the price up.