What is our GDP and deficit? And why it's not our concern

(This image is claimed as Fair Dealing under Australian copyright law. Government debt to GDP forecast.

The title might have you wondering if I'm having you on. Well I'm not. I'm going to give most people reading this the benefit of the doubt and assume we all know what our GDP and deficit are and how they affect us. However it may amuse you to know that I knew very little about such things myself. It was only until recently, and coinciding with my research for this site that I delved a little deeper.

What I discovered is that there is a cacophony of opinion on the topic; most of it diametrically opposed in 2 sides - the neoliberals and the sane. The neoliberals would have us believe that the deficit is out of control, making use of such graphs as the one above to make their case. After some research and general poking around I found that this country has run deficits for about 80% of it's history! Somehow everyone survived.

So what is the magic deficit number these neoliberals are harping on about? Well they never actually go there. I had to chance upon it from Clive Palmer of all people. Some months ago, Clive was on the TV being berated by yet another reporter when he proclaimed that the deficit is just under 20% of the country's GDP. To put that in perspective, the US deficit is around 80% of GDP.

The point of all this is; even if Australia's deficit was double what it is now it is not a bad thing, taking into account that most countries run deficits without a concern. The reason those on the right are so adamant about scaring us all about it is to con us into cuts to services, our living conditions and tax hikes. And pushing out false statements that deficit is 'bad' and surplus equals ' good' for us. Remember when Hockey dropped doozies like "people should drive their cars less or use PT" or "refrain from having that coffee". People were outraged and rightfully so.

Basically, government deficits equal private surpluses. According to Cullen Roche of his website Pragmatic Capitalism, "it is investment that makes all of the wonderful things in this world that help us live a better standard of living".

Next time your neoliberal conservative friend says we need a path to surplus tell him/her that they can find the money hidden in tax havens like the Cayman Islands or Panama. The country has a gross domestic product (GDP) of $1.62 trillion with a deficit of 19.6% give or take. We the people on the ground are not concerned.

For more on why a government deficit is good for your savings account go here: