il padrone wrote:A misguided view of the Australian external sector. Australia has run current account deficits for many decades, probably since before Federation. It is immaterial to the economic performance overall (well actually it is often of benefit). As long as we can service the debts and investment income payments resulting (through an increased economy and greater export activity), then a CAD is beneficial in increasing our national living standards. The general level that is desirable is below 5% of GDP.
pfft....the same superficial, ill informed justification that is dragged out every time someone attacks the CAD.
You want to read deeper on the matter if you want better cycling infrastructure, upholding of the law, free health care, etc, etc.
Start with an understanding of how the Australian median house price blew out to many multiples of other OECD nations....and pushed the primary account so high it offset healthy (mainly mining) trade surpluses for years.
The reason we persist with a CAD in the middle of a once in a lifetime mining boom, is because we're too silly to create a trade surplus that covers the interest bill on foreign borrowings.