I’m not much for watching TV or reading papers… and having been away from home more than 50% over the last 3 months I have only caught up on news from some online websites. I was, however, unaware that Australia’s debt level is set to hit a record high be Xmas.

Now I’m not going to enter into a political debate, I’m sure the comments will well cover that. This blog is about money management and the huge fiscal problem Australia is now facing.

We look to hit $300 billion debt as a Xmas present…WTF!!!

Lets put that in English… that figure is BILLIONS not millions

Or

$300, 000, 000, 000

That’s a dam lot of zeros…

And we haven’t peaked yet… Word is we will hit $370,000,000,000 in a year or two.

In 8 years how did we go from $45 BILLION surplus to $300 BILLION in debt?

Very poor money management, that’s how!!!

The interest alone on $300,000,000,000 is $11.5 billion per annum, a quarter of what our surplus was, per annum, Yes per ANNUM!!!

Lets put that in an everyday scenario, if a family brings home $1,500 net per week in income, could they live a lifestyle of $2,500 per week? Not for long is the answer to that!

Now sure we can put some of the debt down to the GFC… Even though Australia faired best here all across the world… The issue we have is that the GFC is over and our debt is climbing faster than ever before now…

How, why?

Did you know our debt ceiling level has been raised 4 times in the past 4 years. Legislation must approve this and it will need a 5th by Xmas.

Weren’t we promised a surplus by 2013?

Then why we raising the debt ceiling level???

What’s Australia’s figure on the fiscal cliff???

For those who don’t know what the fiscal cliff is, it’s when the interest we owe on the countries debt matches the revenue the government take in each year, meaning we have no possible way to repay the debt… The US has been there already and look to going back there again shortly.

What does this mean… Our dollar plummets, it’s cheaper for China to buy more land here which they are already doing very rapidly, unemployment skyrockets, no money for the health system or hospitsls, no money to fix roads, no money for education, schools. Taxes rise, new taxes get introduced and the country goes into turmoil.

If you don’t think it can happen, neither did the USA, Italy, Greece, Iceland…

The money has to come from somewhere…

Then our property market plummets!!!

Remember hearing about buying houses in the US for $1… You still can buy them for close to that in Detroit, a ghost town. Detroit is like one of those future Will Smith movies where the cities are abandoned and he is there all alone… Yes it can happen.

Now I don’t think our houses will drop to $1 but enough unemployment creates huge mortgagee sales which plummets property prices.

Valuers use precedent sales to value property, 3 sales in your neighbourhood at 30-40% discount means that’s what your property is now worth… Simple!

Enough DOOM & GLOOM… what’s my solution to fixing this dam mess we are in… I’ll wouldn’t get many votes here if I were running for parliament but we would be in the clear… Prob then deemed a superhero but that’s another dream…

The plan is simply, repay the debt… ASAP

We owe $300,000,000,000 .(wow that’s a lot of zeros) and lets add this years interest to that too… call it a lazy $10 billion = $310 billion. We have 23 million people in Australia.

So I work that out to be $13,043 debt that each and every person owes.

Come tax time next June we must pay an extra $1,000 each to the ATO in our tax returns… That includes our children, elderly, unemployed, and yes the pollies who put us here. This must continue every year until the debt is paid in full. Every operating company, ABN or Listed company must also pay an extra $1,000 in tax per annum.

Yes it’s harsh, but as a mass group we can this off much faster… $1,000 per annum = $20 per week.

Recent interest rate cuts have put much more back in our pockets each week.

On top of this, the government are not allowed to increase the debt ( outside of interest payments ) during the repayment period. They can only spend what they have coming in… and in fact they should look to contributing to this debt as well, given they put us there!!!

That means they STOP all spending… just like a household would manage their budget… they tighten the belt!!!

The ATO must use this money to pay this debt off only… With one massive yearly cheque to whoever the hell we owe it to.

Sure many industries would take some pain without the massive grants and payments they receive, potholes in roads, old school buildings but once we hit surplus, we then have the cash to rebuild these ares and be back in the BLACK!!!

Some hard pain for lifetime of gain…

Bring on the comments…