No wonder the poor consumer gets confused. First we are told we are in the present financial crisis because we as a nation along with others like the USA have been spending more than we have earned for some considerable time and our country has to keep borrowing off shore to support our habit from people who have elected to save their money rather than spend it on consumption. These people have invested their money so we can borrow it to fund our insatiable desire to consume products and services.
Then our government states it will correct this situation by borrowing more money than its earns and by this methodology they will save our country. Wait a moment what is the difference between us borrowing money and the government doing it for us? Are we not all collectively responsible not only for our own personal debts but also those incurred by our government?
Some in government claim they can spend our money better than we can and that is why we had the insulation fiasco, the school building rip off, green loans etc etc. I don’t know about you but if I am going to become responsible for more debt I would at least like the pleasure of spending it my way.
I always though the only way to reduce debt was to pay it back not borrow more. That is most probably old fashioned thinking and does not work these days. How do we change our personal habits so we become a nation of investors making money out of other countries where suckers just keep consuming? What incentives are the government offering you and me to save some of our money and invest it rather than spend it. Well this is again where it becomes challenging for us “in the street guys” because the government which showed us the way out of our problem was to borrow more money and spend it now want us to spend what little we have left to support our local businesses or we are going to have more unemployed people to whom they/us will have to pay an unemployment benefit.
No wonder they call this hi finance you would need to be to on something stronger than a beer to understand the logic supporting these claims.
Perhaps we could start reducing our expenditure as country by doing away with State Governments and just have Federal and Local. Imagine how much we would save on elections, save on politicians income, politicians perks and even local businesses would not have to make contributions to election funds just to get something through the State Government in under ten years. This could then be followed by Federal politicians renouncing all their perks and pay for them just like we have to. Then on to taxation and make all interest income on money we have in our banks tax free up to $10,000 per year. Follow this with increasing the GST on non essentials such as overseas travel, hotel rooms above the industry average price, motor cars above the industry average price, boats longer than 10 meters, private aircraft etc to 25%. Then measure our savings rates against what they are today. If this fails follow the governments lead keep borrowing.
