Miriam English July 1, 2016 at 1:54 am

No Ben, strictly speaking, he’s correct. We do have a spending problem — we are spending enormous amounts on the already wealthy and on overseas corporations. We are not spending enough on our own ordinary Australians.

Spending more on our own citizens doesn’t increase debt if done correctly. We can spend more on teachers and the unemployed and spend more on big public projects such as renewable energy and a high-quality internet infrastructure. All those things can raise our income, which immediately feeds back into the government. Sensible spending inside the country (investing) can reap more money for the government because improved education, and improved work standards mean overseas buyers to want our value-added products and if done correctly it can avoid Australians buying stuff from overseas.

If we simply spend vast sums of money on letting wealthy people and multinational corporations drain money out of Australia, and destroy Australian small businesses and creative Australians so that we have no choice but to buy goods from overseas, then our international debt increases dangerously.

Government debt within Australia is a good thing if it is used to increase standards for Australians. It means the government is investing in its people. The government doesn’t lose that money because it stays here and is returned straight back to the government in the very next tax cycle, even if spent on people who don’t pay tax — even people on the dole buy food, electricity, clothes, and so on, supporting local businesses. If the money is invested wisely we all benefit. Also, the important thing in our internal economy is the speed at which money moves. If the government imposes austerity locally, or makes things hard for poor people then the exchange of money slows down and businesses go broke, whereas if the government boosts the exchange of money inside our borders then money moves around faster making us all better off while the amount of money doesn’t actually grow or lessen.

General Australian debt to other countries (spent by government, businesses and people) is often (though not always) a bad thing. It is especially bad if we get nothing useful in return for it, such as buying weapons, ferreting billions away in the Cayman Islands and other tax shelters, and letting multinational corporations bleed us dry. A particularly pernicious way of wasting money is by selling off at bargain basement prices essential services (water, electricity, agriculture, education, medicine, etc.) to overseas corporations who don’t have any intention of making any great improvements to them, but really want them as permanent income from Australia.

So we do have a spending problem because we blow vast sums on the already wealthy and multinational corporations; we need to spend much, much more on our own people.