stupid tax decisions that hurt us lt, page-44

Hi Dopey,
We should not criticise other countries for accumulating debt which they
cant service until our increasing mountain of debt is reversed and resolved.
Our soverign debt is $250 billion + and after this budget will likely to be $270
billion+. This does not include State debt which in the case of Queensland
alone is $70 Billion. ( perhaps some reader can supply us with other State debt
details)

PIGS debt was essentially caused by real estate bubbles which in turn set
banks bankrupt which, in turn again , almost bankrupted soverigns who tried to bail out their banks.

Just imagine what an unemployment rate of say 10% and
a drop in real estate values of 30% would do to our economy?. For a start those with a second negatively geared property and out of a job would soon be bankrupt and our banks would likely loose half of their value ( our banks' value is
currently over twice our GDP)

Take Ireland for example, its property bubble burst in 2008,
virtually bankrupted The Anglo Bank, the Credit Unions, the Bank of Ireland and the AIB Bank. From the advice of the EC, The ECB & the IMF, the Irish State
bailed out the banks and guaranteed deposits. Today The Irish State now owns
the Bank of Ireland and the AIB and they have wound-up the rest with a
soverign owned bad bank called NAMA owning the liabilities.

The EC, ECB & IMF advised the Irish Government to bail-out its banks because
of systemic risk to EZ banks immediately following the failure of Lehman Brothers.

Now back to Australia. Our real estate property bubble has not burst yet because
China has shielded us from recession. The Rudd Government quickly spent
the Howard/Costello savings of $22 billion in two tranches of welfare
and taxpayer handouts to avert recession. Since then we have been accumulating
State and Federal debt at an average of $80 billion /year without any near term
sign of reversal despite what Tont Abbott or Joe Hurley says.

Should our resources bubble burst we could be could find ourselves an involuntary PIGS' member but unlike Ireland who was debt free in 2007-08,
we'll start our recession loaded with debt.

So in summary, we should not unduly criticise the PIGS until we get our own debt house in order nor should we rely on China for our long term economic
wellbeing while spruiking our "accomplishments".

If the USA reaches an opinion that a trade war with China will get rid of the Chinese Communist Party, that's precisely what Uncle Sam will do and our current reliance on China makes us vulnerable as collateral damage.

Cheers
Moorookamick