Pericles said;
Maybe it is time we grew out of this pointless panic, and took a
realistic view of what debt is, and how it is managed.

Your viewpoint was correct in the past economies, but everything has changed.
In the era of expensive and restricted energy which has become such
a large percentage of a countries GDP, the old rules no longer apply.
Credit is becoming more difficult and it will be interesting to watch
infrastructure funding experience.
The NSW government is intending to raise partnership funding for the M4
extention, so that should be interesting.

Another example of total failure of Government policy then, WmTrevor.

>>David used fiscal policy to that end, offering tax exemptions to all those Scots who were prepared to 'live in a more cultivated fashion, dress more elegantly and eat with more refinement’<<

In that context, the haggis must be the ultimate symbol of revolt against royal edicts, flouting the test on all three counts.

Och weel.

And I was being quite serious, Bazz, and very modern.

>>Your viewpoint was correct in the past economies, but everything has changed<<

Past economies did not, except in wartime, routinely run up the kind of debt we are seeing as commonplace today. The difference is that we live predominantly in a virtual economy, courtesy of the permanent split away from "hard" currencies such as gold, cowrie shells and beads. No-one these days would consider selling Manhatten, for example, for any number of Venetian Trade Beads. We have moved on.

The breakthrough was so simple that no-one actually noticed it. Freed from the need to count the gold bars in the vault, the banking community started to not only describe their loan portfolio as assets, but actually treat them as such. The measurement of their worth came to be expressed as a percentage of their value (ROA), not as that value itself. Having a billion dollars of performing loans was goodness; having ten billion of impaired loans was - and is - somewhat frowned upon.

The phrase "too big to fail" applies in this case. Not in its pejorative sense, which is so often bandied around by people who like to find culprits that they can wave their puny fists at, but in the sense of "we each have the other by the balls; now, we're not going to hurt each other, are we."

Which, interestingly enough, is where the US/China game is being played at the moment.

>>China is lending US dollars wherever they can so as to unload their very big US$ holdings.<<

The key phrase here is "wherever they can".

Think about it.

errr, Pericles, I think we may be at cross purposes.
The point I was trying to make was that all debt is going to become a
thing of the past. There will be exceptions, eg barter in one form or
another including futures trading.
In a steady state economy there is no growth, so there is nothing to
repay debt with.
I am looking some time into the future, but certainly in the lifetime
of many of us. The real problem is how do we get from where we are now
with some countries with growth and some with zero or negative growth
and to the place where we all will be with everyone trying to achieve
zero growth.
There is another major problem, can the world in a steady state
economy support 7 billion people ?

If someone thinks they can have infinite growth on a finite planet
they are either a madman or an economist.

Pericles,in 2008 the Gillard Govt borrowed $40 billion from China.I wonder if we got that loan in $ US.

China is well liked in Africa because they are helping their countries and not totally enslaving them in debt.The West used to have the monopoly because our private banks would not let them trade or have technology unless they were enslaved by their debt money system.

Remember Domonic Strauss Khan ,the ex-head of the IMF? He was going to bring back bank regulation.That's why they white anted him with scandal.

The USA now has troops in 35 African countries trying to contain China.How do you think this will play out?

Arjay,

You're right. There is no incentive for personal initiative and business enterprise. The government bureacracies,academics, elites are making us slaves.

There is an English woman,Celia Green who describes what's happening in the UK and you may as well say the West in general, as Totalitarian/Communism. She was some kind of child genious and is appalled at the education system in the UK. She is doing an independent university and doesn't want graduates that have already been through the system because they would not be independent thinkers, but clones. I perceive what's happening as a pretty leftist takeover colluding with the vacuous latte sippers. I agree with Celia Green.

My father's own company was ruined by Labor - payroll tax. He had 13 employees and said he could of employed more. He ended up having to work from home with my sister as his part-time secretary. He quickly then went Liberal.

There only seems favour for big governments (nanny states) and corporations - like how banks have become vampirical. All they want is a debt ridden society. Corporations get cheap rent in comparison to independent businesses. Now we have our ugly Westfields which are destroying villages, towns - ie. community culture because corporations are ruining local businesses. And everywhere around the world will end up looking the same. Now that's a scary thought. Any villages that survive will end up becoming Disneylands.

I think Ben Chifley had a good idea in wanting to nationalise banks. But what did the people do, voted this one good man out for that very reason.

I think we are all sleepwalking - it's like people have been doped. People have become very indifferent, and I must say stressed. There are a lot of zombies and psychopaths in my workplace. But she'll be right, mate!

Arjay said;
Pericles,in 2008 the Gillard Govt borrowed $40 billion from China.
I wonder if we got that loan in $ US.

I am sure we did and probably the money was used for our foreign aid to China !

They must think we are bl%*dy stupid, and we are !

Constance said;
Any villages that survive will end up becoming Disneylands.

Well no actually, smaller towns and villages are the future.
Already Big Malls in the US are closing down. There is even a web site
for closed malls !
Big business, world trade, exporting jobs will end.
Local manufacture, farmers markets, no 1000km food, local trades thats
the way it will be. It is virtually inevitable if we can get enough
people back on the land as farmers. Otherwise it would be chaos.