For a while
last year I harped on and on about what looked like a country headed
towards a debt crisis. Cue words like alarmist and so on being thrown
around. It appears that the obvious is now becoming even more obvious. What is interesting to me though is how history tends to repeat itself.
The
table above shows the federal government’s financial position through
the 70s until the mid 80s. The story is eerily similar. Oil boom.
Increased debt in spite of oil boom and in expectation of continued oil
boom. Oil crash. Increased debt to “get the economy back on track by
spending on infrastructure”. External debt? As long as we spend it on
infrastructure we should be fine. Debt crisis. It’s almost like Déjà vu.
Of
course the cop-out if there is one is that the spending on
infrastructure did not lead to growth because of corruption. Really.
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