Breakfastburrito.
Reading your article reminds me of watching so called 'World Series Baseball'. Just as the Yanks organise a series of games between a team from Texas and a team from San Francisco and call it a "World Series", so the author of the article continually says humanity has a problem, just because the USA has been living way beyond its means. The World does not have a problem. The USA does.
Luckily for Australia, Mr Costello [though he might have sold off some gold too cheaply] did a great job paying off just about all Federal Government debt during his tenure as Treasurer. That would seem to mean, following along with the logic of the article, that if [when] the chill winds blow again soon, the present Australian Government can stimulate the economy again by going mildly into deficit, hopefully temporarily. The stimulus injected into the economy should have a very positive effect on economic activity, as it did during the 2008 crisis. We are much further back up the curve, perhaps where the US was in the 1960s, so that seems a reasonable prediction. Just so long as the stupid baying hounds of the media learn a little economic theory in the meantime and stop banging on about returning to surplus by 2012 [wrong in the circumstances that are unfolding].
China, most of Asia and some of the emerging economies like Brazil are also nicely placed on the curve and though their exports might slow for a while, are also nicely placed to stimulate domestic demand.
That assumes the graph is actually telling us anything useful. I spent quite some time studying stats at Uni, a lot of it a waste of time, it must be said, but it did teach me to be suspicious around zealots with numbers. Can you see any intuitive relationship between the concepts of productivity and deficit spending? I don't find it easy to link productivity, i.e. working harder and/or smarter, with how much debt a government is getting into. Though it churns out a sweet looking chart, does it actually mean anything? I mean, you could chart souvlaki consumption in Greece against total Greek government debt and come up with some pretty chart, but what have you achieved?
Swarm USA only has 186 members, according to their website, so unless Bill Gates or Warren Buffet are on their mailing list, we are way out on the fringe here.
Last edited by Captain Gidday; 26th Sep 2011 at 10:52.