ttbn, I agree with your principle of using your own money to buy things.
When we got married I said to my wife, we will not be buying anything
on credit. She went along with that as we moved into a new three
bedroom house with a bed, a kitchen table & chairs and a fridge.
That was it, no carpets or anything as I believed we would have it
fully furnished much quicker by not borrowing.
Ha, I just remembered we had a second hand 10 inch Dutch Philips TV
set I borrowed from work.

However for business I agree with using credit when its purpose is to
add to the business income and so at the end of the day you are out
in front.
It seems that we have let debt be the means to get everything now.
It seems to be out of control.

JF most small businesses make a smaller percentage in profits than they used to and when wages get increased over and above the cost of living, at some point the dog catches it's tail. I feel we are are approaching that time.

The average person is unaware of the real cost of wages, for reasons I have mentioned and in fact, what i paid in wages twenty years ago was the same as I earned, about 15%. today, wages are rarely below 23% so to increase them more, without increasing profits/margins just won't work.

20 years ago my gross profit was 28%, whereas it's 50% now yet I make less money today.

Sorry it won't work.

rehctub,

The money comes from banks. It exists long before any profit is made.

The alternative to letting wages fall is for the government to intervene so keep demand up. And at's a far superior alternative for two reasons: firstly letting wages fall would give a huge comparative advantage to the already rich, while leaving the battlers unable to meet their financial commitments. Secondly a cut in wages would result in a lot more people leaving the workforce, as the money wouldn't be worth the effort any more.

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I'm not trying to convince you that it's good for individuals to live on borrowed money. People have limited working lifespans so there's a significant chance of the person not being able to afford to repay the loan.

But having had 3 mortgages, you know how useful debt can be. And you probably also know that debt enables businesses to do much more. Unless and until they can get sufficient credit, they will be unable to acquire equipment that they could make a profit from.

For sovereign governments that only borrow in their own currency, the case for debt is much stronger. With unlimited credit, the reasons for not taking on more debt simply don't apply. So while deficits (and surpluses) can be important, debt itself never is.

Butch Jack your price up or quit winging, that is your options. Innovation is the name of the game.

When we are in a downturn the first to suffer are non essential businesses, and that has always been the case, this is why we rely on govt; to keep an even keel on demand. Abbott had no intention of that and lost the plot.

Some people would like to live in a permanent 50’s state of living. The type of opportunities did not exist then for credit, Hire purchase was about it run by shop owners.

Debt is a principle part of business, the idea of debt is to make it work for you. Debt today is used as a political tool, only

rehctub, the money system is not working the way it is right now. Cash is so scarse there are food riots coups and wars.

I am not proposing that small or big business just pay more.
Think about another way.

Think, if employers were paid money to employ people instead of having to pay payroll tax.

Consider Brunei where people pay virtually no tax and the country generates resources from exports.
If Australia greatly increased export revenue there could be less taxes locally.

Not for one single second am I suggesting employers can afford the higher wages.

Think of how stimulation of the Aus economy helped keep Aus out of a recession. Think what stimulus of the world economy might achieve. Stimulus could directly included in bottom of economy wages that generate consumption.

Minimum wage one income families here would have $100 a day take home pay if they did not have to pay tax. Government could pick up revenue from turnover when the $100 a day is spent.
New productivity and new export revenue could be more possible if government debate and time was spent on innovation instead of on combating media driven opinion poll ramifications.

You point out profit of 28% some 20 years ago and 50% today with less money made, so what will the ratio be in another 20 years? Or 50 years?
Clearly the money system is not working the way it should be.
There has to be another way.

At the bottom of the economy there are millions of would be consumers and guess what, they lack enough cash money to buy goods that manufacturers are capable of producing.

The present monetary system generally is not working, prosperity among many people including many wealthy people, is going backwards.
We should keep asking what Scott Morrison and co is doing about it.

Bazz,

The young ones have had it so good (and I am pleased for them) that they honestly believe that the way things have been in their short lives is the way they have always been, and the way they will always be. Nor do they want to listen to oldies because they don't value history, and society no longer values experience.

Doog, for instance, recently posted that people like us are "against everthing" and don't want to move on, or words to that effect. If thats his opinion, we are wasting our time. But what he and others don't seem to realise is that we have experienced much of the experimental Marxism they are talking about, and it simply does not work. They are not prepared to have a look at the tried and true methods because they deem them to old fashioned, out of date, not 'progressive"d. They don't think hard enough about the consequences of "new" ideas enough.