IanGould

  It's sort of tangential to the main point of the article but there's a very important point to be made about deficits and debt from the data here. In 1945, Australia's national debt was around 120% of GDP. For the next 30 years, we ran continuous budget deficits for the whole period. At the end of the period our national was 20% of GDP. That sounds illogical but there's a very simple explanation: the debt was growing more slowly than the economy. Also, the real value of the existing debt was reducing due to inflation. A really extreme example of that last point: Germany borrowed heavily during World War I, mostly from domestic lenders. After the war, Germany experienced hyperinflation. So someone who had invested their life savings - say 100,000 Reichsmarks - would receive a letter with a cheque for the amount owed. Only catch was the stamp on the letter would have cost 1,000,000 Reichsmarks. That's how Germany paid off its war debt. To take a way less extreme exa...