Public debt is not the issue – that's just a neo-con scare campaign | Philip Soos

Australia's household debt is among the highest in the world, so why is there so much focus on our relatively low government debt?

Contrary to the concerns about government delivering numerous budget deficits, it is the growth and acceleration of private debt we, alongside policymakers, should be worried about - not public debt, which amounts to little more than a neo-con scare campaign. This is because private debt drives asset price inflation (bubbles). These bubbles always burst, causing economic destruction and financial disruption.

Just ask the Americans, Irish or Japanese. Yet, all we hear from the Coalition and ALP is the need to transition the budget back to surplus as this represents "fiscal responsibility", while treating private debt as a no-go zone. Why? Because Australia's household sector is the most indebted in the world and nobody wants the value of their homes and investment properties to sink.