LoCarb

Only problem is, the government surplus becomes the private sector deficit (that's you and me).

Basically meaning we private citizens will need to borrow more from the banking sector or use our savings to make up the difference.

So I won't be cheering.

Charismatic

We'll be back to running a deficit in a few years. Reserve bank have done the heavy lifting but they are almost done with cuts, when home loan rates rise a lot of consumers won't feel nearly as flush given the large increases in debt.

Kotare

Lets run a large deficit like the UK or the States instead - jeez!

LoCarb

Why not, the country needs the stimulus.
Lots of poor underemployed Kiwis who would benefit.

Get people spending, stimulating growth for business. A win win.

Tax receipts go up, deficit goes down when automatic stabilisers kick in. (I knew you'd like that bit).

Great result!

Just wish Labour would get on board......

chocolate cake

how real is the surplus? considering payments to the super fund were stopped several years ago, so instead of trying to keep top on issue, we're just we'll running up debt for the future, yet the decreased payments create or inflate the current surplus.

Similarly an inability to consider the pension problem (PM'sno state pension age rise under my watch) further increases the issue, and mean the pension age will simply have to rise later with less notice.

LoCarb

The so-called pension problem is a fiction.

The finance industry created this idea as a way to move our money into their hands for profit making.

Future governments will always be able to fund pensions at some level as long as there are the resources available in the country. It's never a money problem. Money isn't the limiting factor, only resources.

At the personal level, it is always good to have savings for a rainy day or extras in retirement.

At the national level, we don't need savings.


*PS. People like to save, that's why the government should nearly always run a deficit to enable this.
The government's deficit becomes the private sectors surplus.
They pump more money into the economy than they remove through taxes.

Kotare

??

LoCarb

Just keep taking the pills mate. You'll come right

paddy234

Hahaha best pills in the southern hemisphere Posted in the wrong forum lol, was a thread about how locations where palm trees look out of place and i was responding to another poster. I'll quietly tiptoe out of here

paddy234

I'm confused as in a time whenever migration is at an all time high the government is running a surplus??? Shouldn't they be taking advantage of the situation by investing more and trying to grow wages in the economy

LoCarb

The government (and mainstream economists) think government should always run a surplus in the mistaken belief that running a deficit is crowding out the private sector (i.e. hogging all the money in circulation so businesses can't invest).

Nothing could be further from the truth. It is actually the complete opposite that is true.
By running a deficit they are providing us all with more money not less!

Mainstream economists believe that government borrows money in the market to fund the deficit, which isn't the case at all.

By convention, the government matches deficits by issuing bonds, that is, swapping reserves held at the Reserve Bank for interest bearing accounts at the Reserve Bank.

This isn't borrowing money, it's a misnomer and designed to fool us into accepting cut-backs and austerity.

LoCarb

I found this quote today from Elinor Hurst

https://www.facebook.com/green.moder...67107406705734


"We live in a society that thinks we have unlimited natural resources, but money is scarce. When in actual fact it is the other way round.

Natural resources are limited, but money is an unlimited resource. Money is purely an abstract human social construct, whereas natural resources are real, physical and finite on this increasingly challenged planet of ours.

Hence we regularly hear about "sustainable budget finances", but never about "an environmentally sustainable society".