I think this is simply another example of where John Key says whatever his current audience wants to hear. He's getting quite a rep for being a mirror, another example would be his statements in WSJ cf his statements back here at home.

Nothing against the guy, or National. I just reakon he sings from whatever the current song book is. Lets see if he suggests donations rather than spending next time he addresses a retail sector audience.

Spot on Bernard.

Saving rates in NZ are abysmal as we have gorged on an easy credit consumptive orgy.
As in - Like I really need that 40inch flat screen for the toilet. meh

Disclosure : Have no debt and save just over a third of net income since first job - trying my best to raise NZ's level of saving.

Others?

I wonder how much John Key gave of his dealing-days bonus' to charity? At least his old American pal, Andy Krieger, gave 10% of his to charity.
Is it, now, a convenient case of "do as I say, not do as I do?"

This news item highlights the ideological impediments that confront savers:

http://www.foxnews.com/story/0,2933,509584,00.html

Mr. Key's idea is right though. The NZ economy suffers from inefficient use of resources. Charities can do with $0.50 what costs the government at least $1.50.

Charities also tend to invest money in safe investments (i.e. bank deposits) when they have surplus, rather than wasting it on flat-screens or overseas ponzi schemes. I know, because I'm an accountant.

Giving works; before you knock it, try it.

Also, the person who suggests John Key hasn't given much of his own fortune away would do well to find out the facts before they shoot.

What a joke! For many of us who are now down to 9 day fortnights or 4 day weeks the tax cuts will go a very small way to making up the income deficit.

Bernard, keep up that valuable argument you are making against the "paradox of thrift". The whole world has gone mad. People, especially politicians, just love to believe what they want to believe. A few brave countries that go against the tide will reap the reward.

Ron Paul pointed out in 2004 that in 1983, debt in the USA had increased by $1.50 for every $1 of additional GDP; in 2003 debt was increasing by $7 for every $1 of additional GDP.

Debt-based spending is madness; the debt remains even if the spending did not net commensurate value or if assets drop in value. In fact, the "misinvestment" phenomenon is very real under this regime. Keeping it going will merely result in yet more misinvestment that will have to be painfully wound back.

Investment needs to proceed at the rate of savings of real income and production, and be carefully directed; splurging on the basis of debt is destructive all the way. Look at the evidence today. Are you going to believe Keynes or your lyin' eyes?

Nevil

Check out the English charities that lent their money to UK based Icelandic banks for above market deposit interest rates.

Much talk ensued about the government bailing them (charities) out thereafter.

That fifty cents versus the $1.50 cost ratio has to be re-evaluated over the long run.

All I can say is Key can take a running jump, any take break I get next month goes on paying down the mortgage that bit faster...or into my food bill which has grown 8.8% anually...Its easy for him to say, he's worth what 50million? I dont think he has any concept of how most NZers get by.....

regards

http://informationclearinghouse.info/article22242.htm

i agree.

Nicely put Roger.

I am thinking of changing my name to Charity. But I'm sure I will have to get it changed to 'The National Political Party' before the next round of elections, as I'm sure that will become the more worthly/pushed for cause when hunting season starts up again.

Any money in is best spent reducing debt - what does smarmy think he's saying? the correct words out of his mouth should be reminding people that we need to reduce the debt first, increase cash flow, then we can freely give it away as it continues to flow when it is not consumed by debt...

Unless you get a urge to give - that is the power of Love - so let's keep the politics out of it...

Fair suck of the sav, Rob!
I think JK, like Helen, only has 7 houses. I wonder if he'll forgo any benefits of negative gearing on the rentals, by donating that amount to charity. Isn't that a taxpayer subsidy, after all?

If his comments lead to an increase in giving to charity then great what is everybody moaning about. Not everybody is in debt some people will have money left over to help others who don't what is wrong with encouraging that!! I say good on him.

We are all going to donate it back to goverment, in fact we are already doing it. Car registration cost is going up by 25%, local body rates up by almost 10%, state owned power companies increase prices 7% on average, and at least another 5-10% later this year to meet goverment demand...

Bernard you say the 'paradox of thrift' is flawed and it would be better if we put our money in the bank instead but then you say this only applies if banks are still lending, businesses are still investing and consumers still spending with credit. Incase you haven't noticed none of these things are happening. Money in the bank just gets sucked up in the deleveraging process. Money given to charity or spent locally goes directly towards helping the economy and employment. Say I spend $100 dollars buying my daughters some clothes at pumpkin patch I am increasing the sales and profits for this business, if the same is done by 100 other people then they could buy more stock and stop laying staff off and in turn have more money to spend on other businesses etc.... If that money were put in the bank it would just sit there and do nothing for the economy.

Saving is good if it goes into business investment and production but for decades our savings and lending has gone into property investment and pumping up house prices. Nothing has been done to fix that yet.

BH yes basic common sense..the "Paradox of Thrift" was as far as I can establish based on money under the mattress rather than money in the bank...At the time banks , particularily in other parts of the world where going under, runs and even with Governments having a "bank Holiday"...hence the mattress.
Somewhere along the line "Paradox of Thrift" has become incorrectly synonymous with bank deposits..
Traditionally banks used to work on about a 33% ratio of despots to lending, Even RB s and the like used to have a tool to adjust this ratio...then the "free market" concept came along with no regard to traditional safe practices...open season on short term greed, history repeats and we are now in the same situation of the 1873 international crisis of All debit no ownership and an over inflated market that has to correct.
The essential core issue is to get the lending institutions back to there 33% ratio, and that cant be done with spending or "under the mattress" but deposits.
The correction cant be stopped, but can be slowed.
Like apple falling from a tree, we can put a parachute on it to stop a bit of bruising , but regardless it will at some time get to ground level....and we can build a bit of infrastructure ..a rubber mat on the ground to stop bruising and increase the quality of the crop when it finally gets to the bottom.

And as to donating tax cuts...I think Key is more leaning to a Principle that in tough times , comunity spririt, neigbour lost his job, throw a few surplus veggies from the garden over the fence....The guy who has lost his job, chop the neighbours firewood.

Read the "donate tax cuts" out of context and sounds stupid, use a small bit of intergence and add "... also because of a "culture of generosity and giving ingrained in them for generations."That's the kind of attitude I want to foster here."
Something that has been lost from the Kiwi culture in the last couple generations, a culture of 'me' and 'I'