We keep hearing from Hockey that the levels of Australian government debt is what is driving up interest rates - not the fact that the economy is going well, or that CPI is rising (or is it falling? so much conflicting information). Malcolm Maiden writing in today's SMH, explains that today's stockmarket crash (correction?) is a result of government debt.

The sovereign debt concerns that triggered it were predictable from the moment the world’s governments opened their cheque books and began writing blank cheques to save the global financial system.

It is not the Australian sovereign debt that is the problem. As Malcolm writes:

The trigger for this current downturn is concern about sovereign debt, in European nations including Greece, Portugal, Ireland and Spain in particular, and there is no doubt that sovereign debt levels around the world are bloated.

The projected level of Australian sovereign debt is miniscule compared to international levels - and a lot of credit must go to the previous government for that.

But what I do not understand is that if it is government debt that is driving up interest rates, and we have such a small debt - how can our debt be responsible? Surely international levels of det must be doing that? Or is the connections that Hockey makes just a load of Shrek-doodoo?

(and apologies for being slack lately - trying to get things ready for my work trip to Manila this weekend).

 TrackBack URI for this entry

Comments (4)

Subscribe to this comment's feed

Show/hide comments

joni: ...

Comments will still be moderated and approved while I am away, and I will be putting up regular threads. If anyone else wants to write threads, just let me know and we can set you up as an author.

See you from Manila.

1

Fri 05 Feb 2010 23:20:19 EST

Min: ...

And all is quiet and still which basically means that there are few who care about Joe Hockey's opinions.

2

Sat 06 Feb 2010 15:41:25 EST

Mobius Ecko: ...

Funny thing about Hockey going on about government spending, before the stimulus package started the opposition were going on and on about the government not spending enough. The Liberal Party website had tens of billions in programs and services they were demanding the government spend on. All of a sudden that demand for massive spending has disappeared to be replaced by the government spending too much.

Face it, it matters not what this government does, even if it's exactly what the opposition demand they do, they will criticised for it by the opposition, their mouthpieces and rabid supporters.

3

Sat 06 Feb 2010 17:46:25 EST

Evan: ...

Hockey wouldn't know his arse from his elbow.

The reason the gnomes at the Reserve Bank have been hiking interest rates over the last year or so is that they are required by Statute to keep a lid on inflation.

It's f*-all to do with the level of Government debt.

4

Sat 06 Feb 2010 18:07:29 EST