"In 1989, households accounted for only 36 per cent of total private debt in the Australian economy, meaning that businesses were by far the biggest borrowers.
However, by June 2009 the position had reversed, with households holding 61 per cent of the country's debt and businesses only 39 per cent.
While the business figure did not include the increasing amounts of debt issued directly by companies, not via financial institutions, even including this independent borrowing, the amount of business loans outstanding was easily overshadowed by household debt.
This is a problem because businesses generally use borrowed money to invest in new buildings or equipment that will expand their production, which in turn creates more goods, often more jobs and more national wealth.
On the other hand, 88 per cent of the outstanding household debt has been spent on housing.
While some of that debt would have been used to build new dwellings, or renovate existing ones, which creates jobs and places for people to live, the majority of that debt would have gone to bidding up the price of land on which existing properties stand.
That creates no jobs (except a handful for real estate agents, brokers and financiers) and simply represents the nation taking out debt to join a national Ponzi scheme, where the later comers pay a premium to those who have been in the housing game longer."
