Australians, Rich with Debt?

Written by Stephen Outram

User Rating: / 2
PoorBest 

Have we misapplied and misidentified wealth as debt?

"We're the Richest Nation on Earth" reports The Australian newspaper, writing that Australians are the world's wealthiest people. The article refers to a new report by Credit Suisse, "...on a median measure Australian adults are worth nearly US$221,704 nearly 4 times the amount of each US adult.

The high wealth rate in Australia is attributed to the strong Australian dollar, prosperity ownership levels and a robust labour market. Australia also has one of the highest home ownership rates in the world, with property making up about 95% of consumers wealth.

Conversely, The Daily Reckoning, referring to information from the Bank of International Settlements, writes, "...in Australia. Our household debt levels are amongst the highest in the world. Household debt is where we stand out as world-beaters. Australia's household debt is 113 per cent of nominal GDP, a level only exceeded by Denmark and the Netherlands."

Is the illusion of Australian's wealth actually based on debt? Dan Denning, also of The Daily Reckoning comments, "Australia borrowed a lot of its current prosperity?"

Where did we get the idea that mortgages, credit cards and high-levels of personal debt equals riches?

---

Reference
Article: The Australian, October 30 2011 Scott Murdock
The Daly Reckoning, September 30 2011 Grey Canavan

< Prev		Next >