It seems a simple enough solution; to reduce debt, reduce spending. This graph from Australia’s IPA (Institute of Public Affairs) shows just how effective a one percent reduction in overall spending would be, wiping out the deficit in the current year, and halving gross debt in two years:
Instead, we have another budget of the type to which we have become accustomed over the last fifteen years. Promises of a return to surplus sometime in the future if the wind blows in the right direction, and increased debt in the short term. Unless government develops a willingness to stand up to the insatiable demands of special interest groups and the welfare lobby in particular, nothing will change.
Despite what some economists and journalists may tell you, this is real debt; real goods and services are being purchased and they really have to be paid for. Someone has to pay for them. If we don’t, our children will. Older people will, as they find there is no money left to fund pensions and health care.