Profligates’ progress

According to The Centre for Independent Studies,obtained
under Freedom of Information,

the National Disability Insurance Scheme (NDIS)
will cost Australian taxpayers around $22 billion a year (gross) and $10.5
billion (net) in its first full year of operation. This figure is substantially
larger than the $15 billion (gross) and $8 billion (net) currently being used
by politicians and commentators in the public debate.

Australia is spending itself into a deep hole but if you
want to see just how deep a hole can be, look at the crater Uncle Sam has dug
for itself. View here.

CNBC’s Rick Santelli Looks at the Latest US Debt Ceiling Increase and its Scary

Andys RantWith the political discussion of late largely focusing on the GOP primary and income inequality chastised by “the ninety-nine per cent occuytards,” many US media commentators have seemed to have forgotten the mounting US debt that will weigh heavy on the backs of each and every American. The US Senate on Thursday voted to allow President Barack Obama to increase the debt ceiling by $1.2 trillion (that’s $1,200,000,000,000.00) to ensure that the federal government can pay its bills through the November elections.

Rick Santelli hasn’t forgotten, and he’s quantified just how much each person will be on the hook for with the latest rise in the debt ceiling.


  

The new US debt ceiling is now at $16.4 trillion or $52,409 per American (312 million Americans).

Australian media commentators have also seemed to have forgotten about the mounting Australian debt that will also weigh heavy on the backs of each and every Australian. The rainbow Gillard government last year passed a series of budget measures including raising Australia’s debt ceiling to $250 billion (that’s $250,000,000,000.00). The move came as the Gillard government's gross debt is forecast to rise to A$239.1 billion in 2013-14.

The new Australian debt ceiling is now at $250 billion or $10,956 per Australian (23 million Australians). 

 

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Give Me More Cash: Obama seeks $1.2 Trillion Debt limit rise

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President Obama, in a one-sentence letter to House of Representatives Speaker John Boehner, the top Republican in Congress, said "further borrowing is required to meet existing commitments."

The proposed increase would push the US debt ceiling to $16.394 trillion.

 Meanwhile…

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Even before the euro crisis, people were worried about Europe’s pension bomb.

State-funded pension obligations in 19 of the European Union nations were about five times higher than their combined gross debt, according to a study commissioned by the European Central Bank. The countries in the report compiled by the Research Center for Generational Contracts at Freiburg University in 2009 had almost 30 trillion euros ($39.3 trillion) of projected obligations to their existing populations.

Germany accounted for 7.6 trillion euros and France 6.7 trillion euros of the liabilities, authors Christoph Mueller, Bernd Raffelhueschen and Olaf Weddige said in the report.

And according to JP Morgan…

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Australia is "vulnerable" to recession in 2012 as the global economy deals with the potential ramifications of the worsening European sovereign debt crisis.

JPMorgan chief economist Stephen Walters said the Australian economy was not as well placed now compared to the start of the downturn, given the nation's fiscal position.

There is no way Wayne Swan will get the budget back into surplus by 2012-2013.

And more bad news according to Citigroup…

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China’s economy is likely to slow sharply this year as the country's recent growth has been unstable and driven by credit and property bubbles, a senior Citigroup private bank executive said yesterday.

Train wreck

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The UK Economy in Serious Debt Trouble

Britain’s debt levels are dangerously high and are damaging the economy, according to one of the world’s leading financial watchdogs.

It means the country is in the danger zone following a ten-year borrowing binge under the last Labour government, a hard-hitting report from the Bank for International Settlements has revealed

The Bank for International Settlements (BIS) said government, corporate and household debt in Britain jumped from 223 per cent of gross domestic product in 2000, or £2.18trillion, to 322 per cent, or £4.68trillion, in 2010. That is the equivalent of £180,000 per household

In 2010, Britain had government debt of nearly 90 per cent of GDP, corporate debt of 126 per cent and household debt of 106 per cent.

UK PM David Cameron should seriously re think his commitment to phasing out the production of energy based on burning of fossil fuels as it is going to cost the UK economy at least £300 billion over the next 10 years to go renewable energy (which we all know works intermittently).

What is it with Labor and debt? They’re like junkies to a needle.

While our government debt of 15.4% of GDP is low compared to the UK, the trend is more concerning.

Andy Semple

Follow him on twitter @Bulmkt

Let’s Copy Spain: Julia Gillard

No Prime Minister – we Australian’s do not want to copy Spain’s economically stupid renewable energy policies.

Spain is a member of the PIIGS – Zombie Economies that are a complete basket case and we’d really like it if you and Bob Brown would just stay the hell away from the economic levers.

Spain Debt   

The PIIGS are Portugal, Italy, Ireland, Greece and Spain – and they are totally screwed with a combined total national debt of over $3.075 Trillion Euros or a staggering $4.06 Trillion Australian Dollars!

Prime Minister, we currently have an economy the PIIGS would kill for and you want to emulate them?

When you combine Swanomics with Brownomics and Gillardnomics it’s a sure fire recipe for Australia’s total economic oblivion.

Would the real people still left in the ALP please stand up now and please remove this walking talking disaster zone of a Prime Minister before it’s too late?

My work here is done

 

There’s no EU to bail us out!

Andy Semple

Follow him on twitter @Bulmkt

Big government, big troubles

Cory-Bernardi Massive government debt will cost us all, writes Senator Cory Bernardi.

"A government big enough to give you everything you want is a government big enough to take from you everything you have."

With these immortal words, Gerald Ford (38th President of the United States) clearly stated the continuing battle at the very heart of our political system. That is the reason I have an autographed photo of Ford on my office wall. It serves as a constant reminder that we must never give up in our determination to limit the size of government.

Broadly speaking, on the left of the political divide are the big government types who believe that government can spend your money more wisely that you can. On the right are those who have a commitment to smaller government and lower taxation so that you can keep more of what you earn.

Rarely in modern politics has this divide been as clear as it is right now.

Kevin Rudd is a big and reckless spender. He has wasted billions of taxpayer dollars and borrowed billions more. In fact, he is scheduled to borrow another $97 billion to fund his extravagant spending over the next two years!

Let's put this in perspective. The last time Labor were in office they left us with a debt of $96 billion. It took more than a decade for the Coalition Government to pay it off. 

Now reckless Rudd will have accumulated over $150 billion in debt after just three years with the first capital repayment of one billion dollars expected to be made three years from now. At that rate he'll have paid off his binge spending in only 450 years!

Regular readers will be aware that debt is dangerous for governments. The only way to get rid of them are through inflation, increased taxation or lower spending. 

Kevin Rudd has chosen the taxation path with his latest budget attacking the current profit centre of the Australian economy – mining. He has declared that any profit in excess of 5.75 per cent of capital cost is a 'super profit' and will be subject to an additional 40 per cent in tax.

The Rudd Government expect this tax grab to add around $12 billion annually to their revenues.

What Mr Rudd hasn't told you though is what happens if the commodity boom comes to an end. Under his scheme, taxpayers will actually be liable for 40 per cent of the losses incurred by the mining sector.

That's right, Kevin Rudd has effectively nationalised the mining industry, making us all liable for corporate losses. 

Most of us have already suffered as a result of Rudd's reckless mining tax policy. 

Billions of dollars have been wiped off the value of mining shares as a result of his new tax plans. This has had a dramatic (and negative) affect on superannuation balances across the country.

It could have a much bigger effect in the years ahead if the mining boom slows down or even comes to an end. History would indicate this is an inevitable occurrence.

What then? The government will be responsible for writing cheques to compensate mining companies from your taxes. Given Rudd's track record, that's a situation we should all feel uncomfortable about.

As Kevin Rudd punts the public purse to grow the size and influence of government, he is increasing the risks for all of us. Based on the lessons of history and Rudd's poor form, a betting man would say it's odds on that it won't end well. 

If that's the case, we'll all end up paying a heavy price.

Senator Cory Bernardi is the Shadow Parliamentary Secretary Assisting the Leader of the Opposition and a Senator for South Australia. This article is courtesy of his personal blog which can be found at http://www.corybernardi.com.