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Corona RT142
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November 2003

Re: The world is changing...	Mon, 12 September 2005 10:14

The government does not gain anything by interest rates being higher in fact it'll cost them money as they use the money that they raise from bills and bonds to fund projects etc. IE government bonds can be issued to finance a budget deficit (very rare these days but 20 years ago it was common practice) the higher the interest rates the more the government has to pay back to the banks/ppl who purchased the bonds/government securities. Another fact the federal government debt is actually very small and once the sale of telstra goes thru they will have fuck all debt which poses another problem. The foreign debt you talk about is actually caused by the private sector ie business/us importing far more than we export overseas the government once again tries to reduce this with tariffs etc but as the world moves closer and closer to globalisation of markets they are reduced meaning we need to compete with world's best practice or get the fuck out of the industry. See once the federal government debt is paid off they're will be no more need to issue government bonds to cover it which poses a problem for the RBA. How can they curb inflation by issuing bonds when they can't issue bonds for government borrowing. They still issue bonds but then invest in something that creates a greater return than the interest on the loan. This would be blue chip stocks (Telstra, Qantas, CBA etc) government buys back the businesses it just privatised bwahhahahahaha classic. I may have totally lost most ppl here but anyone with an understanding of economics may get this theory many still don't, i am yet to find a high school teacher that believes it but it has been raised by economists on talk back and i had a good debate with a n eco's teacher at uni who was impressed. My brother raised it too me last year when i was at school as his teacher could never answer it at school either. [Report message to a moderator]

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