If you were on a fast moving train and someone came through the carriage and told you that the train had no brakes and only a brick wall would stop it, how would you feel? What would you do?
Right now, Australians are heading at full speed into an economic brick wall and the government won’t do what’s needed to stop it.
Read more at: The Australian Independent Media Network
Government debt comes about because Treasury runs our economy as if it were a household. If the incoming flow of tax receipts does not cover the outflow of government spending, it directs the AOFM to tender for the sale of government bonds to cover the expected shortfall.
But this is no more than an academic exercise. The government is not a household. It is the currency issuer of Australian dollars and can never run out of money. It never needs to borrow any more than it needs to collect taxes.
Read more at: The Australian Independent media Network