Message from @NewRogernomics

Discord ID: 649093588348567572


2019-11-27 03:37:47 UTC  

Well, NZ did its own version of austerity, which was a mistake as far as healthcare spending for sure.

2019-11-27 03:38:52 UTC  

Basically, the last government raised sales taxes, and cut healthcare and social welfare spending.

2019-11-27 03:39:07 UTC  

So now the current govt is having to pay for the gaps that resulted.

2019-11-27 03:39:58 UTC  

that's what happens when you try to balance the budget

2019-11-27 03:40:16 UTC  

https://cdn.discordapp.com/attachments/523835768813387796/649092097466564608/Screenshot_7.png

2019-11-27 03:40:20 UTC  

https://cdn.discordapp.com/attachments/523835768813387796/649092110666170388/Screenshot_8.png

2019-11-27 03:40:56 UTC  

there is no free lunch, aggregate demand is going to come from somewhere(or you will get a deep recession/depression)

2019-11-27 03:40:59 UTC  

Well, it is more problematic than that...as NZ has a house price boom, and general costs of life are high.

2019-11-27 03:40:59 UTC  

GG @NewRogernomics, you just advanced to level 8!

2019-11-27 03:41:09 UTC  

yea im watching the housing down there

2019-11-27 03:41:45 UTC  

that's another problem you instigate when you dont use fiscal policy, bank reserves tend to end up in speculative areas

2019-11-27 03:42:07 UTC  

QE in the US is doing that almost as a goal, for same but outsized reasons

2019-11-27 03:42:25 UTC  

it comes from a belief in monetary policy to do things it simply cannot do

2019-11-27 03:42:28 UTC  

Mostly, NZ is doing well due to exports and foreign investment, but that has its problems.

2019-11-27 03:43:27 UTC  

Housing is built that is not affordable for residents and is more of an investment for foreigners, and never lived in.

2019-11-27 03:44:02 UTC  

Residents can't afford housing, and the government tries to help by subsidizing housing for the poor.

2019-11-27 03:44:29 UTC  

But there is still not enough to go round and there are state housing waiting lists, as well as a lack of affordable private housing.

2019-11-27 03:45:15 UTC  

@Sh0t If you visit...you can see a lot of flashy apartments, but also you can see folks living in cars.

2019-11-27 03:45:36 UTC  

there is plenty to go around, kiwis just belief like somebody in this chat does about gov surpluses, yada yada

2019-11-27 03:45:53 UTC  

20% debt gdp ratio :/

2019-11-27 03:46:11 UTC  

Well, govt policy in NZ is to gradually decrease the ratio.

2019-11-27 03:46:25 UTC  

It is openly talked about.

2019-11-27 03:46:39 UTC  

yea, that's why people are homeless lol

2019-11-27 03:46:42 UTC  

it's a bad idea

2019-11-27 03:46:59 UTC  

and it compounds because it also hurts aggregate demand and encourages private debt to make up the difference

2019-11-27 03:48:48 UTC  

Well, NZ used to build sufficient state housing, though over time governments slacked off, and the mood was to just leave it entirely to 'market forces'.

2019-11-27 03:49:24 UTC  

market can do it, but it's how the money enters the system. trying to do it via monetary policy just creates the very inequality they are trying to solve

2019-11-27 03:50:28 UTC  

Though...NZ went through a major economic transformation in the 1980s-1990s, as well as being cut off from the UK market and having the oil shock all at once in the 70s.

2019-11-27 03:50:57 UTC  

they are chasing a phantom going for budget surplus and austerity

2019-11-27 03:50:59 UTC  

NZ used to be an economy that was way more regulated and restricted.

2019-11-27 03:51:07 UTC  

you dont need to that

2019-11-27 03:51:27 UTC  

i'm all for laizzez faire, but you do have to be honest about monetary system

2019-11-27 03:52:16 UTC  

In NZ, policy tends to fluctuate by political party.

2019-11-27 03:52:48 UTC  

Labour is more willing to be flexible, though National has a major policy platform around running surpluses, low govt debt, and decreasing welfare spending.

2019-11-27 03:53:28 UTC  

Every election cycle, the govt debt and surplus level is brought up, as a measure of whether the govt is effective or not.

2019-11-27 03:53:49 UTC  

that entire conversation is a disaster

2019-11-27 03:55:02 UTC  

Both parties though tend to be consistent in policy to reduce the debt to gdp though.

2019-11-27 03:56:04 UTC  

Not the best site, but allows you to see it roughly.

2019-11-27 03:58:03 UTC  

they need to stop

2019-11-27 04:01:59 UTC  

It is hard to stop policy set by the reserve bank and political parties though.