What skyrocketing debt?

Norway was whacked with six negative GDP quarters in 2008-10. Growth returned in 2011, but two of the last three quarters were negative. The jobless rose from 2.3% in 2008 to 3.6% in 2010 and remains at 3.4%. GDP per capita has declined every year since 2008.

Norway, it must be noted, went into the GFC with a phenomenal net position of 138.8% of its GDP in the black – 19 times Australia's modest 7.3%. Yet it suffered one of the most entrenched recessions in the world.

So all nations that went into the GFC with no net debt suffered particularly badly. All except one.

Australia alone experienced just one shallow negative GDP quarter, a modest rise in the jobless and near enough to a straight line increase in GDP per capita. Plus positive measures on most other variables. And gained triple A rating with all three agencies in 2011.

Next we examine those nations which weathered the GFC satisfactorily. None emerged as soundly as Australia. But those that did pretty well include Israel, Poland, the Slovak Republic, South Korea and Switzerland.

All these experienced only one or two negative GDP quarters, modest job losses (mostly), little if any drop in income, and have recovered to a sound position now. Yet all five went into the GFC with substantial net debt – between 28% and 70%.

Quite clearly, if there is an explanation for Australia surviving the GFC better than any other nation, debt at the outset is not it.

Those who claim it is are not to be believed. They are either being untruthful or unaware of reality. If they are lying for cynical political reasons, they must be opposed.

Of course, there is an explanation for Australia's ascendancy.