current account deficit??? does it matter
I did honours in economics and finance back in Uni (some time ago now) and have read numerous opinions since then and it is still not clear to me the implications for our ongoing current account defiicit, which year after year seems to worsen.
Our national debt is skyrocketing but the interest payments are still relatively low...but what happens when terms of trade deteriorate / A$ bombs out / interest rates rise?
Can we continue to live beyond our means by going into hock or selling our assets? I think we are living in a fool's paradise and sooner or later there will be a biog crunch given our debt levels but I would be curious what others think because it seems some think it doesn't matter and some think it is critical....
I think Costello has done a good job for the most part, but the govt boasts of eliminating its own debt and creating surpluses but that is a gnat on an elephant which is our ballooning private debt levels! It doesn't seem to be the govt has done much to wean us off our addiction to spending beyond our means or stimulating the export sector.
And as I whinge from time to time, our spending on R&D is a national disgrace and something we will live to regret in years to come because of myopic government policy and institutions focussed on the next quarter's figures.
Is our ongoing current account deficit an iceberg or an icecube for good ship Australia?
