Debt volcano swells before eruption

Debt volcano swells before eruption

Australians now know the price of Rudd’s bank bailout over the last year—the biggest household debt in history.

Australian household debt has soared to over $1.2 trillion, and is now bigger than national GDP.

Every Australian adult’s share of the debt is $74,000, compared with adult median wages of just over $40,000 a year, and many people struggling to pay debts without a job at all.

The surge in household debt was driven by the Rudd government’s First Home Owner Grant scheme.

Citizens Electoral Council leader Craig Isherwood pointed out the enormous household debt is the cost of the Rudd bank bailout:

“Kevin Rudd has saddled Australian households with enormous, unpayable debts, in order to bail out the banks that he lied were ‘sound’,” Mr Isherwood said.

“In October 2008, Australia’s banks were all set to crash: they were trapped between over $600 billion in foreign borrowings that their foreign creditors were unable to roll over, and a falling Australian property market into which the banks had on lent their foreign credit.

“We in the CEC warned the banks were bankrupt, but while Rudd lied that the banks were ‘sound’, he sprang to their aid with a government guarantee for their foreign borrowings, and a huge cash injection into the domestic property market to drive the prices up.

“This was disguised as first homeowners assistance, when in fact it has made property even more unaffordable than it was, which was the intention.”

Mr Isherwood observed that household debt is not only bigger than GDP, but now ranks in size to foreign debt, the sum of all Australian borrowings—government, corporate and personal—overseas.

“It’s debt, debt, and more debt,” he said, “we’re a nation drowning in debt.

“The global financial crisis is in essence an unpayable debt crisis, but under orders from the bankrupt private banks, governments all over the world have bailed them out by creating even more debt.

“It’s a swelling volcano, and it is set to blow,” the CEC National Secretary warned.

Mr Isherwood insisted the only solution is bankruptcy reorganisation, to cancel the unpayable debts of the bankrupt banks, using the Homeowners and Bank Protection Bill, as prescribed by American physical economist Lyndon LaRouche, who said on 22nd December, “And this has to be done in the first weeks in January. This is the highest priority: This is emergency legislation, because if we don’t do that, somewhere, maybe a little bit after the middle of January, or even possibly before, the whole system’s coming down if we don’t do it, beforehand.”

ENDS

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