Or, as Tony Abbott might say, there's a debt problem but we won't fix it because it isn't a problem.

So how serious is it?

That a debt-to-GDP ratio rising to 50 or 60 per cent of GDP as projected by the Intergenerational Report was "pretty good", in the Prime Minister's words, compared with Greece, did sound a bit rich, or I should say poor.

But this was one time you couldn't criticise him for not knowing what he's talking about because his critics don't either.

Not only is there widespread confusion – even Wikipedia gave up, judging by its reams of corrections and warnings on the subject — between gross and net, public and private but worst of all between foreign and national debt.

In this case it's net government debt. True, we're nowhere near that of Greece, the economic basket case of Europe.

Still, that's only half the story. Or more like one quarter of it because Australia's real problem is foreign debt and, the main reason for it, private – not government — borrowing.

In the pantheon of foreign indebtedness Australia's ratio of 107 per cent of GDP looks, well, pretty good. Net debt, which subtracts what we've lent offshore, is even better at only half that.

But such is the confusion it's impossible to get consistent figures for different countries for net foreign debt, so I'll go back to the gross figure.

One of the worst is Ireland at 1093 per cent but even the UK is at 436 per cent of GDP.

So Greece's 175 per cent is a model of thrift comparatively speaking, excelled only by us.

Oops, what am I saying? That's Greek government debt; its foreign debt is around 230 per cent of GDP, still nothing on much of Europe.

Why the markets picked on Greece is another story but suffice to say the interest payments on its government bonds, which are most of its foreign debt, was heading for half its budget.

Anyway, it's not the level of debt so much as where it went that matters. In Greece's case, down the gurgler.

Our foreign debt hasn't been entirely squandered on endless budget deficits and government spending.

It's been run up by the banks to finance mortgages for you and me. That's the private sector and so must be worthwhile.

Hmm, with huge balance of payments deficits unfortunately we need global capital markets to like us.

And building the world's most expensive houses, encouraged by economically wasteful tax breaks like negative gearing, won't look so good in a serious recession causing a property slump. Especially with record housing prices and household debt.

Fingers crossed, that's not imminent. But with its big budget deficits the government is piling up more debt funded by foreigners snapping up our bonds because of our AAA status and higher interest rates.

That can only draw attention to our other much bigger borrowing.

Twitter@moneypotts