\t\t\t\tRecently released ABS Statistics show that household debt has hit a record $815 billion but the growth is slowing as the property slowdown deepens.
\n<\/p>\n
There is some evidence that households are attempting to reconstruct their precarious balance sheets by saving more. The slowdown in borrowing is a portent of a broader slowdown in aggregate spending and the fiscal drag coming from the flawed macroeconomic policy (running budget surpluses) will start to bite.<\/p>\n
ABS says that by the end of September, outstanding household debt in Australia equals $814.8 billion with most credit demand coming via overseas borrowing. If we had the infamous “debt truck” now, it would be groaning under the load – foreign debt is now a record $406.2 billion compared to the $194 billion in March 1996. We should all recall the current PM hectoring us about our profligate ways. Total debt ($2069 billion) is around 250 percent of GDP.<\/p>\n
While household debt growth has risen in proportion with wealth, the composition of wealth has shifted and with rising proportions accounted for by shares which in a meltdown become worthless.<\/p>\n
It should be noted though that a current account deficit is not a bad thing despite the popular construction. Exports are after all a “cost” and imports a “benefit” If we can persuade the rest of the world to ship more real things to us than they want back from us and they are prepared to finance the imbalance by accumulating $AUD financial assets then that is a good thing. The real devil is the conduct of fiscal policy. By running surpluses, the government is forcing the private economy to go increasingly into debt and such a growth strategy is eventually doomed. The backlash is coming and it will be ugly.\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"
Recently released ABS Statistics show that household debt has hit a record $815 billion but the growth is slowing as the property slowdown deepens.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[18],"tags":[],"class_list":["post-40605","post","type-post","status-publish","format-standard","hentry","category-economics","entry","no-media"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/40605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40605"}],"version-history":[{"count":0,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/40605\/revisions"}],"wp:attachment":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}