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Opinion: Why the government must be serious about serious reform in Budget 2010
By NZ Business Roundtable executive director Roger Kerr Preparations for the 2010 budget will be underway in government circles. The 2010 Budget Policy Statement, which sets out the broad parameters, is due in December. The task won't be an easy one. Core Crown expenses have mushroomed from 29.2% of GDP in the year to June 2004 to a forecast 37.3% in the year to June 2010. On the wider OECD measure, which includes local government, total government spending is running at 46.4% of GDP, higher than the OECD average. The government succeeded in protecting New Zealand's credit rating in the 2009 budget largely by putting tight parameters around future spending. Thus no increases are foreshadowed in health and education through to 2013 aside from a general provision for new spending, which is much smaller than in recent years. Meanwhile social security and welfare spending is projected to grow by over $2 billion by 2013.
Even more worrying, debt serving costs are rising fast with the sizeable budget deficits the government inherited "“ by nearly a further $2 billion by 2013. This outlook has several implications. First, with the weight of government spending on the economy, which crowds out productive private spending and harms growth through the deadweight costs of taxation, it will be hard for the government to achieve fast growth. The Taskforce advising the government on a programme to bridge the income gap with Australia by 2025 will clearly have to address this issue. Second, the trend in recent years confirms the weakness of the Fiscal Responsibility Act (now part of the Public Finance Act) in constraining government spending. In its 2009 report on New Zealand, the OECD recommended that a direct statutory cap on spending should be introduced. It referred to research suggesting that spending rules outperform deficit rules in virtually every aspect of budget policy. Such rules could take the form of an overall limit (Hong Kong's Basic Law, for example, provides that government spending should not exceed 20% of GDP) or a limit on spending growth (to, say, population growth plus inflation unless higher increases were approved by taxpayers in a referendum). The government is to introduce a bill incorporating such a limit (sometimes called a Taxpayer Rights Bill) next year for parliament's consideration. Third, many questions can be raised about the quality of recent spending increases. In the public hospital sector, for example, Business Roundtable research found that hospital efficiency and productivity fell in recent years despite large increases in spending. An interesting survey by Simon Kemp of the University of Canterbury published in the latest New Zealand Economic Papers found that the median participant perceived little or no change in the quality of any government service in recent years, regardless of how much additional funding it actually received. This is consistent with International Monetary Fund research suggesting that countries have achieved few social gains from pushing government spending above around 30% of GDP. There is wide scope for cutting wasteful government spending, but meaningful cuts will require examination of programmes and agencies. The government should also consider divesting its commercial businesses, primarily to make them more efficient but also to reduce debt servicing costs. A further issue is the tension between government spending and monetary policy. Government spending increases push up costs and prices in the domestic sector of the economy and raise the real exchange rate faced by exporters. Recent IMF research confirms that the most effective tool available to policymakers to contribute to a lower real exchange rate is likely to be public expenditure restraint. It also finds that a policy of resistance to nominal exchange rate appreciation "“ advocated by some in New Zealand "“ has not generally been successful in preventing real appreciation. Around the world, government budgets have been battered by the financial crisis and the recession that followed it. The United States and Britain are staring at double-digit budget deficits. In Britain, both main political parties are promising spending cuts after next year's election. Tax increases are generally seen as threatening already fragile recoveries. With our economy picking up, there is no longer any argument that fiscal stimulus is needed. Such action seems to have had little effect in many countries, and wasteful spending should be cut in any event. Tax increases are not desirable in New Zealand either. The challenge facing the government should not be under-estimated. Modest cuts to adult education in this year's budget caused a public outcry. Special interest groups are always affected by spending cuts, as are public sector jobs. In Britain it seems that the voting public is ahead of politicians in understanding the need for austerity. What will the New Zealand reaction be? Time will tell, but one thing we know is that soft options will put the country's credit rating and the government's aspirations for improving living standards at serious risk. ____________ * Roger Kerr (rkerr@nzbr.org.nz) is the executive director of the New Zealand Business Roundtable. This piece first appeared in the Otago Daily Times, October 23, 2009.
55 Comments
yada....yada....this guy is like a
yada....yada....this guy is like a stuck record....
This guy is a genius
This guy is a genius , and oughta get the Nobel prize for Economics .
ROGER ROGER ...or is that
ROGER ROGER ...or is that Rodger RODGER.
Steve, that's because the causes
Steve, that's because the causes of our current predicament, succinctly outlined in the article, haven't changed.
This stuff is the work of a generation or so - and isn't for the faint of heart....
Hammering on the same old theme, tedious as it may be for those minds enfeebled by instant gratification, is the first step towards a more widespread awareness of how we got here, and the ways out of the maze.
About which one can only say - there's no easy or painless way out. Especially when one is surrounded by voters, engorged on OPM, who quite correctly have gotten the first of these messages: their gravy train is slowing down....
Why do we tend to
Why do we tend to discount wot Kerr says? I think that's perhaps because we have a suspicion that he is only promoting policies that will make his paymasters at the BRT even more wealthy than before, in a country which has seen greater polarisation of wealth than other developed ones.
Perhaps we feel that way because in fact he is only promoting policies that will make his paymasters at the BRT even more wealthy than before, in a country which has seen greater polarisation of wealth than other developed ones.....
But maybe that's pure coincidence.
Yeah, right!
@Waymad: 30 years of the
@Waymad: 30 years of the laisezz-faire economy have indeed caused this mess, his rantings remind me of the "socialists" in the 70s who, when their total failure is pointed out they answered with (paraphrase) "that's because we didnt become socialist enough!" His and his ilk's greed has led us to this, now its time to step back and move in another direction... The Reagan experiment has failed...
regards
"Government spending increases push up
"Government spending increases push up costs and prices in the domestic sector of the economy and raise the real exchange rate faced by exporters."
Well that doesn't appear to be the US experience. A bit of context would be helpful.
God it's refreshing seeing one
God it's refreshing seeing one commentator saying that further taxation will make all our problems worse, and the only solution is to cull the size of the State. That total government spending makes up over 46% of our GDP is an appalling indictment on a) our 'second-hander', parasite economy, and how moribund it is, and b) on individual freedom in NZ, or rather, the extreme lack of it.
Overall, a good piece Mr Kerr.
Interesting: "A further issue is
Interesting:
"A further issue is the tension between government spending and monetary policy.
Government spending increases push up costs and prices in the domestic sector of the economy and raise the real exchange rate faced by exporters."
101 stuff right? Money volume dynamics. Prudent, non-politicised cut-backs are required, no doubt about that. However, if we raise the idea of modifying monetary policy with some form of effective credit/money volume control no one wants to know, why is that?
Anyway, while your'e listing the vested interests as part of the answer to that question, and finding they are joined at the hip with the list against effective asset/capital gains taxation, enjoy this from PEC:
'Who's looking at the data says PEC'
As the dollar hits 76.4 cents to the US dollar, we are told there is nothing we can do to protect our own currency and that's just not true. "Why are New Zealanders not being told the truth", says Selwyn Pellett spokesperson for the Productive Economy Council.
"The public are tired of hearing "Oh it's the US Dollar or the Pound" and "We are in the same position as everyone else". Well this may serve the needs of banks and the politicians but it's just not true. In the 22 day period from the 1st of August the NZ Dollar has appreciated 5.1% against the US Dollar with a 0.1% improvement in GDP, while Singapore achieved a 15% improvement in GDP with just a 1.61% increase in its dollar against the US Dollar, and Taiwan's currency decreased 0.6% in the same period. So let's stop telling the New Zealand public we are helpless and can't do anything. The lack of leadership on this issue puts us in danger of becoming another Iceland." says Pellett.
"If politicians and bureaucrats were paid in US Dollars this problem would be solved by lunchtime. Perhaps that's what we should do. The solution required to fix New Zealand's recurring monetary and productivity problems are tried and tested. Australia and Singapore both have compulsory superannuation, both have capital gains tax, and Singapore's intelligent monetary policy does a great job of protecting its productive / tradeable economy while maintaining price stability" says Pellett
We are told we need fresh ideas to solve the problem of the dollar and our lack of productivity as a nation"¦why do we need fresh ideas when such problems have been solved elsewhere?
"Eighty percent of the solution lies across the ditch in Australia in their tax and savings plans and the remaining twenty percent resides in Singapore's superior monetary policy. Fresh? Well not since the days of Bob Hawke and Lee Kuan Yew; but perhaps that's the problem. Perhaps our government really can't bring themselves to adopt policies introduced by other governments, policies that have stood the test of time and delivered superior prosperity to their nations. To this we say get over it! Left and Right is the politics of yesterday, we need national leadership that is more concerned with right and wrong than left and right."
"The facts can't be ignored. Until 1984 when we floated the dollar and introduced our version of monetary policy, our GDP was significantly greater than Singapore's. Since that time Singapore as steadily gained ascendency in every area of their economy. We don't have to be Singapore but we want to adopt the sanity of their monetary policy and the sooner the better." says Pellett
So just to reiterate:
"Left and Right is the politics of yesterday, we need national leadership that is more concerned with right and wrong than left and right."
@Philly: Agree...and the ppl can
@Philly: Agree...and the ppl can see this...National is indeed stuck IMHO....its paymasters demand more but the voters eyes are being opened....the excesses so well glossed over before the melt down are now exposed in stark contrast....and somehow they think it can be fixed...and we can go back to the same same...Sadly I dont think Labour are much better.
My hope is now that voters will turn away from self-centered "consumerism" (for want of a better catchall term) and instead of ignoring politics and economics beyond 30sec sound bites by Pollies will start to engage and take an interest because the social and economic impact on them will be severe in the coming years....then they peel back the smoke screen from these guys and its bye bye.
<i>“Left and Right is the
"Left and Right is the politics of yesterday, we need national leadership that is more concerned with right and wrong than left and right."
No Les, Ronald Reagan said it much better:
' "You and I are told we must choose between a left or right. I'd like to suggest there is no such thing as a left or right. There is only an up or down. Up to man's age-old dream -- the ultimate in individual freedom consistent with law and order - or down to the ant heap of totalitarianism. . . [the Founding Fathers] knew that governments don't control things. A government can't control the economy without controlling people. And they know when a government sets out to do that, it must use force and coercion to achieve its purpose. They also knew, those Founding Fathers, that outside of its legitimate functions, government does nothing as well or as economically as the private sector of the economy."
Ronald Reagan "A Time for Choosing" Speech: 1964.
@Philly - yes, as reported
@Philly - yes, as reported on here a few days ago;
This piece in BusinessWeek from Bruce Einhorn points out that the UN Development Programme has worked out that New Zealand is the 6th most unequal developed economy in the world. Our inquality has increased the most in the world in the last 20 years.
It would be great for the BRT to provide some analysis as to why that is. As we all know that 20 years ago (late 1980s) was just prior to the neo-liberal reforms - it is understandable that the population generally links those reforms with our country's widening socio-economic disparity.
Given the BRT's prescription is for more of the same, I wish they would provide an explanation/analysis of why or how such reform can be effectively de-coupled from these gap effects. I'd be all for their prescription - I'd love to live in a society where there was no need for welfare - if only a part of their economic plan had some credible policy to reverse this growing trend.
Mark, great quote from Reagan,
Mark, great quote from Reagan, but how do you keep the impoverished orderly without the need for a totalitarian state?
Maybe there wouldn't be so
Maybe there wouldn't be so many " impoverished " if we had less than 46 % of government in our economy , and hand-braking our lives and freedoms . 9 years of Helen's welfare state spendfest has impoverished us all . We got a ponzi-property boom , and a monster debt to inflate it . Growth in GDP stalled . The dollar soared . And manufacturers/exporters bailed-out . Roger Kerr is like " a stuck record " because the problems are still there . Only now , thanks to Michael & Helen , we are bankrupt . Still got the premium priced train-set though ....... Woooooo woo !
Mark, Kate - good
Mark, Kate - good points.
"They also knew, those Founding Fathers, that outside of its legitimate functions, government does nothing as well or as economically as the private sector of the economy."
The problem comes with defining, "its legitimate functions." From my book review of The Origin of Wealth - Evolution, Complexity, and the Radical Remaking of Economics, Eric D. Beinhocker.
"Beinhocker rounds off the work witha final chapter called, 'Politics and Policy "“ The End of Left versus Right' that includes a very interesting section entitled 'Left-wing Utopias and Free Market Fantasies'. It's far from a promotion of Tony Blair's 'The Third Way' and therefore not simply about gravitation toward centre politics in the first world. From a complexity point of view, the critique of the left is quite obvious "“ you cannot centrally plan evolution. (Unless your name is God perhaps!) For the right, free markets are not as free, fair and efficient as theory predicts and so dogmatic assertions of 'leave it to the markets' are as flawed as central planning. Rather the role of the state is to create an institutional framework that supports the evolutionary mechanisms that underpin markets, striking a balance between cooperation and competition while best shaping their character to serve the needs of society. The state is also obliged to ensure citizens have equal opportunity to participate (good for all) with relevant support should they fail in taking risks that could benefit the whole, but consistent with the norms of legitimacy and strong reciprocity - "I trust you will do the same unto me as I'll do unto you." The key words here are legitimacy and trust, demonstrated at all levels, as this promotes engagement. At the highest level, government, and therefore legitimate governing processes. At the societal level, work for your advantage, don't bend the system to get it "“ you freeload on us, we off-load you. (Perhaps something akin to a 'strict Aunty' rather than 'Nanny state'.) The role of markets is to provide incentives for the discovery and differentiation of business plans (read products and services), facilitate selection against the needs of society and their legitimate representation, and channel resources to selections for amplification "“ but government can enhance amplification via tax incentives*; see our policy position."
Top of the page here:
http://www.mea.org.nz/events.aspx
http://www.interest.co.nz/news/top-10-10-bollards-impotence-nz-vampire-s...
@Neil C: if you look
@Neil C: if you look at public healthcare and Pharmac as two examples this clearly isnt the case ie business is best....and this is the problem with Kerr (or indeed the equiv on the left), he isnt creditable with the populace because he ignores the successes of Govn., the successes of SOE's...and the failures of business...and of course the die-hard "socialists" on the other side do the same (but opposite)...
@Mark H: and of course you are R. Kerr seem to share the similar extreme right political philosophy/ideology...which in the last 12 months has and continues to prove itself so badly wrong.
Excellent balanced article as usual,
Excellent balanced article as usual, Roger.
Still waiting for that seminal piece from you on how the Business Roundtable has managed to preside over the destruction of such an enormous amount of wealth thru incompetence and greed, and why our share market is as a result now only a fifth the size of the Aussie one, on a per capita basis - leading to as much wealth destruction in the eonomy as any government can be charged with .....
I'm not right wing <b>Steven</b>
I'm not right wing Steven - I'm Libertarian, which is, classical liberal/humanist. And I've said it in here until I'm tired of saying it: the crisis is due to lack of laissez faire, not because of it.
From:
http://www.telegraph.co.uk/comment/columnists/iainmartin/3563956/Capital...
Quote:
"...genuine capitalism was abandoned long ago in favor of a mixed economy - an unstable combination of economic freedom and economic coercion by government. Today's crisis, like the 1970s stagflation before it and the Great Depression before it, took place under, and is growing under, a mixed economy - not a free market.
It is the result of the Government systematically manipulating the market to promote "stability" and "home ownership" - by a massive increase in the Government-controlled money supply, a massive decrease in government-controlled interest rates, an artificial increase in lending by multitrillion-dollar Government agencies, an enormous leveraging sanctioned by government reserve requirements, a "too big to fail" policy, the use of mortgage-bubble-backed securities in every area of the economy endorsed by government approved rating agencies, and years of top economic officials denying there was a housing bubble and promising to keep the good times rolling.
Today's events are not unexpected consequences of laissez-faire that Rand, Mises, and others failed to anticipate-they are expected consequences of the mixed economy that they explained decades ago..."
Kate, Roger made a very good reply, but you tell me, why do you assume the 'impoverished'? I put it to you, that class is precisely what our welfare state is best at creating.
@RT "9 years of laissez-faire
@RT "9 years of laissez-faire economics has impoverished us all and it looks like it will impoverish us for the next 9..."
regards
@mark H: Ditto Im not
@mark H: Ditto Im not a socialist....
regards
RogerT. It is interesting that
RogerT. It is interesting that you correlate the "ponzi-property boom" with an increase in the size of the welfare state. Can you further elaborate?
"the crisis is due to
"the crisis is due to lack of laissez faire".....the socialists said the exact opposite in the 1970s and brought countries to their knees....all "laissez faire" seems to have accomplished is an even better job this time around for all countries.
regards
@LEs, i rather like that
@LEs, i rather like that paragraph of "Politics and Policy"
MarkH - what I'm saying
MarkH - what I'm saying is, if I accept your argument that the welfare state created an impoverished class in New Zealand - can you provide a reason why your prescription will serve to reverse this trend. Meaning how does Libertarianism address existing inequality, or raise the living standards of those already impoverished?
"Great Depression before it"....before the
"Great Depression before it"....before the GD and the cause of the GD would seem more to do with the "laissez faire" disaster than anything else....a mixed economy that came about from the GD seems to have been a better balance until the Reagan experiment effectively took us back to the "laissez faire" of the 1920s....it seems we are unable to learn from previous mistakes without direct experience of it ourselves...and this time around we dont have the cheap and plentiful resources to ever recover....
regards
@Kate: it doesnt, its dog
@Kate: it doesnt, its dog eat dog....takes us back to pre-1920s, indeed even Victorian times where anything and everything was there to be exploited....
regards
no Kate , I don't
no Kate , I don't correlate them . But both a property boom and an increase in poverty occurred in Labour's 9 year reign . Failed socialist policies from the past . And no , Steven , we have not had 12 months of far right policies . Jelly Key is a limp shadow of your beloved Helen . And I didn't support him at election time , nor now . Frankly , a plague upon both , the house of Labour , and the house of National . Both have mis-led us .
Im getting through this, worth
Im getting through this, worth a listen.
http://www.informationclearinghouse.info/article23787.htm
The Warning
Frontline PBS Broadcast October 21, 2009
Video
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."
Kate asked, respectfully: <i>can you
Kate asked, respectfully: can you provide a reason why your prescription will serve to reverse this trend. Meaning how does Libertarianism address existing inequality, or raise the living standards of those already impoverished?
I answer respectfully that it will create, just for the start, the incentive for parents to make rational decisions regarding having children, including 'do they want the responsibility of being parents', which denotes an assessment of can they financially afford to be parents. Just as importantly, it will mean parents have children through natural love and affection, rather the DPB credit in the bank account.
I recommend you have a good read through, and follow, Lindsay Mitchell's excellent site, and analysis, including her posts on the plight of our continuing trend toward teenage mothers, and how the majority of these now remain on welfare for life, as do, logically, many of their children, creating an endless, and growing, cycle of 'impoverishment'.
http://www.lindsaymitchell.blogspot.com/
Economically, an economy can't survive when half of its activity is simply recycling the effort of the productive sector into non-productive, and often, counter-productive waste. Plus we are all impoverished by the bureaucracy that is needed to run such a parasitic system, impoverished by being made slaves of the Big State, as it slowly consumes the hand that feeds it.
yada….yada….this guy is like a
yada"¦.yada"¦.this guy is like a stuck record"¦.
...and a few others here.
..absolutely agree with the top comment (Steven)
They are riding and old donkey with a calculator in their hand looking for direction.
One has to ask the serious question: Where are the real brains and architects of this country or are there any ?
..or do we go left
..or do we go left or right in blue colour or red - men ????
Are we libertarians vegetarians or no eaters - socialist flat-footed or big nosed ??
People weak up - all that "talk" doesn't make sense !
Steven - yes, there are some
Steven - yes, there are some good insights in Beinhocker's work. I like these lines:
"The key words here are legitimacy and trust, demonstrated at all levels, as this promotes engagement. At the highest level, government, and therefore legitimate governing processes."
http://www.interest.co.nz/news/have-your-say-housing-minister-others-ben...
Mark Hubbard, Its a common
Mark Hubbard,
Its a common theme re the poor having large familes and providing bigger and bigger drain on taxpayer. The other side of the equation is rarely mentioned. Which is that wealthy/middle families are increasingly selfish and restrict their families now to one to 2 due to lifestyle benefits (or inflated housing), thus requiring increased immigration. This is largely a boomer legacy, but the next generation is wearing the cost and at current birth rates is perpetuating the problem. Healthy birth rates across the whole of the NZ demographic would be a good thing to pursue because it
1) gives us a higher percentage of well brought up kids, better eductated etc
2) solves the issue of increasing households with, decreasing persons per household. This is a key factor in housing unaffordability.
RogerT, actually I do draw
RogerT, actually I do draw a correlation. As part of the neo-liberal reforms, the state stopped building state-owned housing, sold much of what had been built to the private sector and instead paid market rents to private landlords to house the state sector tenants. The idea being to transfer the capital risk to the private sector.
Overtime, I think, there have been many unintended consequences - one of which was the rise in property investment by the private sector to house state sector tenants.
Many state sector tenants of the 1960s/1970s were able to lift themselves out of poverty to become land/property owners themselves by favorable purchasing terms for their state-owned properties.
The private sector landlord has no incentive to lift his/her tenants out of the rentier class. The incentive is instead of course, quite the opposite. And resultingly, privately owned tenancies give little attention to capital improvements, such as insulation and heating.
Again, the state ends up stepping in with incentives for the private property landholders to insulate etc. in its attempt to try and lift their tenants out the ill-effects associated with unhealthy living conditions.
So, yes, I believe the welfare state played a part in fuelling the property boom. I think the earlier prescription, which saw state tenants able to purchase the state-owned assets on favourable terms. to be a much better scheme for the impoverished class, and with a much greater chance of success in reversing the trend toward inequality.
Well Mark, I asked how
Well Mark, I asked how the Libertarian prescription lifts those already impoverished out of poverty - and you imply it doesn't have an answer to that - however, it would prevent more newly impoverished.
But, were this theory correct (i.e. no welfare state will lower the birth rate of the already impoverished), then we wouldn't have seen third world populations increase at the level that they have, would we?
Or is there another Libertarian interpretation for this birth rate phenomena?
@W. Kunz: "Where are the
@W. Kunz: "Where are the real brains and architects of this country or are there any ?"
The more I read about "finance" the more I agree with the statement that they are run as a pack, they are afraid to stand out because that invites disaster when things go worng....the result mediocre average performance....running in the herd is safe for them, they have our money but we have no choice.
I think this can probably be used for Pollies...they are all the same. To get through the selection process for a party and stand a chance of election they must first all pass through the same party process....the result is a bunch of ppl who think the same and act the same...there is no independent thought allowed, the party wants the candidates to do as they are told....over time I think the parties internally migrate to extremes, but need externally to appear worth voting for....its one huge lie.
So real ppl who can think and think outside of the square have virtually no chance of being elected IMHO. They cant get themselves before the voter or have enough "air time" to get enough voters...to get to parliament...and even if they can they are 1 out of 120....so achieve nothing.
regards
I see …a political gang
I see "¦a political gang of white and black "Woollies" with a few horny and greedy rams in between - framed in 8 wire.
<b>Kate</b>: a vibrant, laissez faire
Kate: a vibrant, laissez faire economy, will raise the living standards of all those in it, just as has happened in all societies that have allowed capitalism to flourish. And the more free the system, the more free the people, and the better the living standards. True capitalism is the 'only' economic system that can claim for itself increasing living standards. The only one.
Jimmy said wealthy/middle families are increasingly selfish and restrict their families now to one to 2 due to lifestyle benefits
Huh? You think its selfish not to have children? I'm stunned. (And wish the Kahuis', for example, had been so selfish).
Not having children is not a selfish act. It has nothing to do with that. The only reason to have a child is from the wellspring of natural love and affection: it is a pity that it is that very wellspring that government intervention has so poisoned.
I believe I would not make a good father, and I have quite opposite goals, thus have no children of my own, nor have I brought up children: that's a reasoned, compassionate decision that I have made.
Healthy birth rates across the whole of the NZ demographic would be a good thing to pursue because ...
Well, as much as I think capitalism can raise the living standards of a rising population, I also have to tip my cap to Maltus: overpopulation is a much bigger threat to this planet than the myth of global warming is ever going to be. In this context, I find your statement of how 'well or moderately off middle class' choose to restrict family sizes right on the mark, don't you think? Yet another solution provided by the wealth created in capitalist systems.
Correct me if I'm wrong
Correct me if I'm wrong , Kate , but you are suggesting that it is a good idea for the state to take a chunk of my wages , and distribute it to impoverished folk , to give them cheap rents , and an option to buy the houses at a discount to market value . Meanwhile I slog on , and try to afford my mortgage , with this shackle , the state , upon my progress . And this is a fair and equable system ? ......... And all this re-distribution of my wages involves the cost of bureaucrats , to administer , and does nothing to increase the productivity of the country . It adds to the burden on the tax-payer of more civil servants .............. And they aren't civil , nor do they " serve ".
@kate: "no welfare state will
@kate: "no welfare state will lower the birth rate of the already impoverished" The interesting thing is there are lots of real world examples of Libertarian outcomes/failures.
If you look at the real world ie much of asia and the third world, they have no welfare state and no or little public healthcare, but in fact produce lots of children, what happens is, more babies die. Ergo removing the welfare state will probably make things worse. (About the only piece I have seen suggests that giving free and easy access to contraception, political freedom and the same for education for women achieves the opposite ie an improvement in standards of living).
"Libertarian interpretation" this the let the babies die bit....without public healthcare we get back to infant and mother death rates of the 1900s...
Personally I look back at the last few hundred and indeed thousand years and I see that the greatest improvements and indeed best survival trait/action is to be in a group of ppl, a society... Libertarians on the other hand would seem to be almost extinct....if this isnt a clear path of what not to do I dont know what is.
regards
@RT: "And this is a
@RT: "And this is a fair and equable system" Its a question of balance...there needs to be rewards for those who have success and there needs to be support for those that fail....somewhere in between there is a balance and a fair as possible outcome for all.
By the grace of god I am lucky enough to have enough intelligence and enough capability to earn a pretty good wage, others dont have as much of those attributes so earn less this isnt their fault. So for me I pay more tax but Im still ahead I'm still advantaged over them, so there has been a re-balance....I consider that fair.
regards
Roger, Simple, do not all
Roger,
Simple, do not all DO it.
Stop PAYING for a while.
The roller-coaster does stop if you don't pay the tally-man.
See the ensuing storm.
Batten Down.
Wait for finer weather...Will soon come.
<i>If you look at the
If you look at the real world ie much of asia and the third world, they have no welfare state and no or little public healthcare, but in fact produce lots of children, what happens is, more babies die.
Why the third world is third world is far more complicated than we can deal with here, Steven, but it is certainly not because the third world lacks a welfare state. Welfare states have only been made possible from the wealth created by capitalism (the irony being, that welfarism then takes them back to barbarism).
The third world is just that because of:
Tribalism - the opposite of Libertarianism.
The use of force on one to another - whereas a Libertarian minarchy is based on the non-initiation of force.
Lack of property rights - a huge one: Libertarians realise that without property rights, individual rights cannot be practiced, nor a capitalist economy.
And on and on ... including, every insane ETS scheme around the world that will ensure the third world is never allowed a cheap energy supply, thus will never be able to industrialise and pull itself out of the mire.
But I shall end on an observation. Kiwis tend to have a very exaggerated view of our own 'success'. The biggest eye opener to me over the years has been Asian clients who, for all their medical and dental care, go back home, refusing to deal with New Zealand's archaic, 'third world' (to quote one couple) health system. These places in Asia you speak of: when was the last time you traveled Asia?
It is we in NZ who are being left behind.
[And re this sentence I have quoted from you, read my comment on Malthus in my post directly above.]
@Stevens. Your thoughts resonate with
@Stevens. Your thoughts resonate with mine. All those advocating unbridled and unregulated Laisezz-faire economy should investgate the buisness model of health care in US, investigate the cost of providing health care and compare it with public health care in different countires and take in to account the impact on people which is never taken in to account by the free market gurus.
Nomad, no, why don't <b>you</b>
Nomad, no, why don't you give us the analysis?
And I say this without even going to that place whereby I would say the current US Health System is utterly distorted by Government interventions already.
But you've brought this up, you give me the analysis, please, which you believe is so convincing about a public healthcare system, and its cost versus outcomes compared to a private system?
And did you note my comment above regarding our public healthcare system? I'll repeat it:
But I shall end on an observation. Kiwis tend to have a very exaggerated view of our own 'success'. The biggest eye opener to me over the years has been Asian clients who, for all their medical and dental care, go back home, refusing to deal with New Zealand's archaic, "˜third world' (to quote one couple) health system. These places in Asia you speak of: when was the last time you traveled Asia?
It is we in NZ who are being left behind.
Mark - this notion of
Mark - this notion of "true capitalism", or a capitalist minachy - no welfare state, meaning no state built/owned schools, roads, hospitals, residential dwellings, water/waste infrastructure, no public parks, no conservation initiatives etc. - no state provided education, health or welfare.
However, the true capitalist state would have a very efficient state police and justice system, whose sole purpose would be to defend individual property rights and uphold the non-initiation of force principle. It all sounds so easy.
But in reality, isn't it just a very large police state - and nothing else?
I feel that social equality breeds societal contentment and social inequality breeds societal contempt. I don't think anyone here welcomes the growing size of the welfare state - but I think the only credible policies going forward are those that aim toward a balancing of social equity - the world over.
Capitalism has gone so far down the road of crony capitalism, that I do wonder whether it can survive. Unfortunately, if it is to survive it needs greater regulation I suspect, not less.
<i>But in reality, isn’t it
But in reality, isn't it just a very large police state "“ and nothing else?
How can it be a police state when one of the founding principles is the non-initiation of force, including most certainly by the state/police on the people? And under the rule of law in a constitutional republic?
I feel that social equality breeds societal contentment and social inequality breeds societal contempt. I don't think anyone here welcomes the growing size of the welfare state "“ but I think the only credible policies going forward are those that aim toward a balancing of social equity "“ the world over.
How? To attain this balance? More welfare? Most certainly more government intrusion to bash us all into equal size wee boxes surely? Who gets to decide who should be 'equal' (meaning?) with who, and how and on whose effort?
If my effort is taken from me by force to give to you, how does that may you feel? Equal?
Capitalism has gone so far down the road of crony capitalism, that I do wonder whether it can survive.
Totally agree: it's called a mixed economy.
Unfortunately, if it is to survive it needs greater regulation I suspect, not less.
Totally disagree - it's the regulation that has stifled laissez faire and allowed the cronies free rein in their monopolistic rent seeking in collusion with government: for example, Enron.
Mark, what I'm missing is
Mark, what I'm missing is an article in "Wikipedia encyclopaedia" about Libertarianism in New Zealand. To become educated and able to form a viewpoint about "your" philosophies, I'm sure you are the right person to do that.
Steven : finally we have
Steven : finally we have a moment of agreement , your post @ 1:56 p.m. But , and this but is bigger than Gerry Brownlee's , we don't have balance ( in my opinion ) . The state has balloooned in size , far outstripping our GDP growth , and taken with it welfare . Do you feel that median earners ought be in the welfare net ? 'Cos that is exactly what WFF has done . And the cynic in me believes that Labour did it to lock a bigger wedge of voters into their camp . And Jelly Key didn't repeal it for fear of losing those folk . So we are stuck with it . And it is grossly poor and unfair policy ........... And it is my opinion . I cannot point to some graph and prove it ......... I shall go now , and sob quietly into my gummy bear bag !
Mark, some ideas on how
Mark, some ideas on how we might move toward a global balancing of social equity:
- restructure international money supply and credit creation mechanisms
- set an international maximum wage and minimum wage
- set limits on corporate mergers and acquisitions thus preventing monopolistic opportunities and this "too big to fail" economic scenario
- limit cross boarder capital flows whilst removing the barriers to cross boarder human flows
<b>Walter</b> <i>Mark, what I’m missing
Walter
Mark, what I'm missing is an article in "Wikipedia encyclopaedia" about Libertarianism in New Zealand. To be educated and being able to form a viewpoint about "your" philosophies I'm sure you are the right person to do that.
No need, it's all on here: http://www.libertarianz.org.nz/
:)
<b>Kate</b> without disrespect, but you've
Kate without disrespect, but you've just given the recipe for a complete totalitarian state.
Are you aware how minimum wages laws increase unemployment in periods of deflation?
Are you aware of the implications of maximum wage laws? Who gets to set these? How is the 'magical' figure guesstimated.
Where is 'freedom' of the individual in all this. I put it to you there is none.
I think the nub of your problem is this 'social equity' you speak of, because it's starting to look like what the Soviets must have been striving for, given your prescription above is exactly what they were doing.
So, 'social equity' - what 'exactly' is this please? What do you mean?
By the way, the only point of yours I could possibly have some agreement on is the first, however, given your successive points, that can't be so. I suspect we mean something different by that also :)
Mark, without international minimum wages
Mark, without international minimum wages laws - what we have seen arising out of capitalism is the flight of production to economies without such minimum wage laws and without environmental standards for waste dischange and disposal, clean drinking water etc. Such factors also serving to lower the cost of production in those economies as well.
What exactly is 'freedom' if it is not the freedom of equal access to the nation's natural resources - clean water, healthy soils, raw materials for shelter etc.
Social equity (for me anyway) is a global condition where waste is minimised such that no individual accumulates more production excesses than they require in a life time and no individual has less than they need to sustain a healthy life.
Dont waste your time Kate,
Dont waste your time Kate, Johny Key will have us all sold off to his central banking buddies transnational corporate subsidiaries before you make any sense of Mr Hubbards confused interpretations of the order of things, a system where the only law is you promise not hurt each other, thus you want need anyone to enforce the law, and any public infrastructure is going to be paid for by voluntary taxes, hhmmmmnnn
As for the slaveminded one, RK, with all is evidence from the ever so reputable IMF, could the reason that we are chucking a fortune at the system only to see it disappear as if in a sinkwell, is because how much of it is going to service the perpetually compounding debt, and pay the as many middle and senior management positions as their is hospital beds in the country. Their is only one place we need to be looking for relieve in this nation, and that is from the $39 billion, and fast rising, that left this nation in debt servicing of bogus foreign created credit year end Dec 2008.
RK states the obvious with
RK states the obvious with a lot of padding..
Boom times create bureaucracies, that grow and get padded with so called consultants all feeding off the money pumped into them...
Office manages dreaming up constant new ideas and building their empires...pump money into this sort of situation and it just soaks it up.
Then the proverbial hits the fan.....
Take this Education thing, going back to the basics of the 3 Rs
Teachers and schools have spent the last coupe decades, changing styles, curriculum, and a whole industry has feed off it....those at the front line dont know if they are coming or going and spend more time catching up on the latest fad....
Recession hits....country cant afford to keep feeding this 'support' industry feeding of the education system....So teachers are told " go back to basics and teach the 3 Rs.
All the little bureaucratic empires are weeded out, and the support feeders fall away.
Our teachers get the constant pressure of change taken off them, and once again start teaching the basics the children need before they get to high school.
The same applies to the health system .. we see the front line Doctors /nurses/ teachers rubbing their hands with glee, and able to get on with the job.
Surprised Neville hasnt written an article yet on how beucarcy goes in these boom and wasteful / lean mean and efficient cycles.
It is from these periods that and why unemployment rises....dumping the dead wood.
The band waggon is over.....Recession is a positive thing.....
Thu the feeders and empire bulder will not think so....the same people who have milked the system