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credit card debt (less than 50 billion) is only a small part of the 170% GDP (1.1 trillion) private debt. Most of the private debt is in the loans on highly overpriced property.

Are you serious? 170% of GPD is not annual private debt but accumulated "total private debt". No inconsistency here. If that private debt level is to be brought to a normal level and simultaneously replaced by public debt (so total public+private debt stays the same to prevent a severe...

Just to add one more point on GDP. Remarkably similar to US, 73% of Australia's GDP (70% in the US case) is supported by consumer spending using "borrowed" money. That is why US's phony GDP growth is now exposed. .. but not yet in Australia. The level of private debt Australians take on is...

chilliaa, have you calculated how much public spending is needed to counteract the fall in private debt to a normal level? Currently, private debt is at 170% of GDP. And the normal level should be around 50%. Historically, the corrections often overshoot to 30% GDP. Let's say we reduce our...

You are wrong. 1) This crisis is caused by "private debt", not public debt. Australia's private debt is the highest in the world (private debt/GDP ratio), worse than US. That is why several studies have shown Australia will be hit much harder than US and Europe, eventually. 2) The reason that...