dailyreckoning.com.au / By Greg Canavan / November 16th, 2012
In Australia, we seem to have a cultural view that our ‘material abundance will last forever’. What people don’t seem to realise is that our material abundance, and our ability to take advantage of this material abundance, doesn’t come close to covering the bills we’re racking up in the pursuit of a high standard of living.
And the economic ignorance of our leaders is astounding. In a classic case of ‘pride coming before the fall’, Julia Gillard came out with this pearl at last night’s annual Business Council of Australia dinner in Sydney:
‘Australia’s budget is one of the seven economic wonders of the modern world’
As we recall, Spain’s budget was in OK shape too just a few years ago. It may have even taken up one of the other six spots in the economic wonders of the world. But then its overheated property market crashed and the government had to use its balance sheet to bail out the banks. All of a sudden wonder took on a different meaning in Spain.
To proclaim Australia’s budget as an economic wonder is just pandering to the fact that we are in better shape than the economies of the northern hemisphere, where the economic crisis first hit.
In their ignorance, our politicians think that through some special powers of economic management we managed to evade the crisis. We haven’t, we didn’t…it’s on its way.