The NZ Government and how to deal with the global cockup

Discussion in 'The Intelligence Cell' started by .Sven, Mar 8, 2009.

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  1. A good article:

    You Can't Spend Your Way Out of the Crisis

    "We don't tell New Zealanders we can stop the global recession, because we can't," says Prime Minister John Key, leaning forward in his armchair at his office in the Beehive, the executive wing of New Zealand's parliament. "What we do tell them is we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with."

    That idea -- growing a nation out of recession by improving productivity -- puts Mr. Key and his conservative National Party at odds with Washington, Tokyo and Canberra. Those capitals are rolling out billions of dollars in stimulus packages -- with taxpayers' money -- to try to prop up growth. That's "risky," Mr. Key says. "You've saddled future generations with an enormous amount of debt that then they have to repay," he explains. "There is actually a limit to what governments can do."
  2. Billions are going to roll out anyway - if you don't spend it creating jobs, you have to spend it on unemployment benefits or controlling public disorder. Sitting back and doing nothing might save the government coffers from a tanking but it won't do much for social stability.

    The problem is, what do you spend it on and what do you hope to achieve? The US and UK have made a fundamental error in both practical and ideological terms in bailing out the banks. The bastards have taken our money and held onto it, so we're now having to spend even more to get cash to the businesses who need it to keep people in work. Worse in the long term, we've taken government into areas where government has no business being, for good or bad.
  3. My bold.

    You're right in that this Gov't can't sit back and do nothing but I can't see that the billions of pounds that this Gov't are printing is going to translate into jobs.
  4. Hence my second paragraph.

    What they should have done is followed the old military doctrine of never reinforcing failure and stuck two fingers up to the financial services industry. It's probably true that we need banks to allow commerce to flow but that doesn't mean these specific banks. If we'd used the money we've given the bastards to lend directly from the BoE to the businesses that needed them, we could have saved ourselves a fortune; achieved our desired goal of freeing up liquidity; and restored confidence in the banking system by introducing a reliably uncontaminated lending body while letting the infected ones go bust.

    As it is, the money spent is being sat on by the very cancers we need to excise from the economic body of the nation. Who in their right mind would lend to a bank that still doesn't know how much bad debt it already has? For that matter, how is it a sensible business strategy to borrow from one when there's a risk they might discover the extend of their exposure tomorrow and call in the loans at short notice to try and cover their own arrses?