Sunday, October 09, 2011

Where is all the Money that Gillard and Rudd Borrowed?

Daniel Hannan is a Member of the European Parliament, he's a forthright man and is a follower of the 'Austrian School of Economics'. The following quote I took from Hannans blog. It's from Ludwig Von Mises and explains briefly why printing money without producing more goods is a bad thing.

What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit expansion is built on the sands of banknotes and deposits. It must collapse. 
Human Action
True, governments can reduce the rate of interest in the short run, issue additional paper currency, open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression. 
Omnipotent Government
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Human Action

Right now, here in Australia Gillard and her bunch of economic illiterates are printing money and borrowing money on a grand scale. It can't continue and the longer it goes on the worse the reckoning will be. 

Even if Gillard goes the next Labor leader will not change anything, they are too beholden to the unions and the greens and don't have the strength or intelligence to stop what they have started. Howard / Costello left a $60 Billion surplus plus the future fund (the future fund should have been returned as tax cuts). Now the $60 Billion surplus is gone and we are about $135 Billion in debt . Our debt has increased by about $8 Billion in the past two weeks.

Where is this money going? Where is it coming from? How are we going to pay it back? Right now each man, woman and child in Australia owes approximately $15,500 in government debt. That's on top of any personal debts you may have. 

A few short years ago we had virtually no government debt and $60 Billion in the bank. Now we all owe a ton of money. Where did the money go? Some on dodgy school building programs, some on fitting insulation and burning down houses and stacks on welfare and god knows where RUDD and GILLARD have squandered the rest.

This is going to end in tears for us and our children.

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