WHEN I woke up this morning everything seemed to be in its regular place. I ate my normal breakfast of rolled oats with skim milk and lots of sugar, the weather was picture perfect, and the morning’s news informed me of yet another disaster facing the beleaguered NSW Government – no doubt to do with roads, hospitals or schools.

But according to the media, the world is on the brink of an economic calamity the likes that not even the State Government could engineer, the so-called Global Economic Crisis. So how come then that Sydney seems as sunny as ever, the parking is as bad as ever and the beachfront is still crammed with young people kerb crawling in sports cars with ‘doof doof’ music assaulting our sensibilities? In other words, what’s the big deal?

I’ll tell you what the big deal is. This Global Economic Crisis may well come to scar a whole generation economically and leave Australia a much poorer place than anyone of us could ever have imagined. The fact that we can’t sense or feel the doom or gloom doesn’t mean it isn’t real.

Once the crisis hits what economists call the ‘real economy’ – in other words the one you and I come face to face with every day, people seem to think it’s only something that will affect the rich. The problem is, when the rich catch an economic cold, you and I will ultimately catch economic pneumonia through job losses, rising prices, superannuation funds savaged and rising political instability.

For more than a decade we become addicted to dirt cheap imports from China and freely flowing credit at low interest rates. We de-industrialised and spent like there was no tomorrow, never thinking that the economic iceberg lay dead ahead.

Prime Minister Rudd’s solution was initially to encourage high interest rates in the hope of curbing consumer and business demand and keeping inflation in check, now he’s throwing money at us (which many will spend on those Chinese imports) to stop us falling into recession. Go figure!

Tough times call for tough and considered leadership, but it also calls for us to take personal responsibility for our spending and saving habits, for having encouraged our kids to go on to Year 12 while many should have gone into apprenticeships to help avert the skills shortage, for having mortgaged our future to the hilt. We made the basic mistake of having assumed that good times would never end.         

Mark Barbeliuk November 2008