Here's Australia. Not as extreme as the US, but still riding for a fall (and this graph basically sums up the argument against Costello's economic management, which is a little unfair when taken by itself, but does pierc e the'economic messiah' bubble surrounding him.
The Government is responsible for Government Debt. Costello didn't use the budget to pay for the private sector's debt and nor should he have. The increase in private sector debt during this period was a reflection of the historically low interest rates during the time. Costello paid of $96 billion of government debt over a course of ten years, saving the taxpayer $8 billion in interest repayments each year. If it were not for the sound economic management of the previous government in paying off the debt, Australia would be in a far worse condition today and not so well placed to weather the current financial crisis.
Some private sector debt is also beneficial - when it's being used to pay for expansion - so long as the borrower can service the interest repayments, a mortgage is not a bad thing. Conversely, bad private sector debt is credit card debt, which is typically used to make consumer purchases. That's why Rudd's stimulus package wasn't really a stimulus package - it was all spent on buying plasma tvs and wii fits. Doesn't help our economy if it's going straight overseas. Might have stirred the retail sector briefly, but there'll be no lasting benefit to show for the ten billion he spent. The one thing that has helped curb spending was Keating's introduction of compulsory superannuation. That had the effect of reducing wages - not in absolute terms, but in take-home pay terms because the superannuation payments are basically enforced savings.
