We have as much private debt as we do in Australia, largely because we don’t have enough government liabilities (call them ‘government debt’ if you must).
To add more private debt, and to add it to the young, is the height of folly, resulting from the mass delusion that the budget is broken and needs to be repaired, that the government can run out of its own currency, that government liabilities are in some way a burden on future generations (excuse me!), and that there is something inerently good about a budget surplus.
We are in the grip of a mass delusion and we have been now for 30 years or more.
The Coalition is deluded. The ALP are deluded. The Australian Greens are deluded. Most micro-parties are deluded. Virtually all journalists are deluded (to an extraordinary degree). All orthodox economists are deluded, and so are a few heterodox ones.
None of them understand the mechanics of monetary systems.
We live in the Ptolemaic age, where the government budget is concerned.
We have invented the telescope, and we can clearly show anyone who is prepared to look through it that the monetary system is not Ptolemaic.
Some of them haven’t realised this.
Others have the same shock religious fundamentalists had with the idea that the Sun and the planets do not revolve around the Earth.
Shamefully, many people are at least partly aware of the insights of MMT, and that these insights are based on fact, but are ignoring all this for career, political or other reasons. They will often justify themselves by mentioning that great but pathetic excuse, the Overton Window.
All this garbage will collapse in the end, and those shamefully ignoring the truth at the moment will be made to look what they are, because the workings of a monetary system are simple enough, at the level of fundemantals, so that anyone can understand them.
Meanwhile, prepare yourself for wall-to-wall garbage, from the Right but also from the Left, in the discourse relating to the Budget, in the days, weeks and months ahead.
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