2. Countries that run deficits with the world (like NZ for 50+ yrs) can only do so if Govt deficit spends and / or the private sector goes into more debt. The Clark years budget surpluses were ONLY possible because businesses and households were sending private debt levels to the moon. [10/n]

O m f g
This guy is seriously a banana
And that’s offensive to bananas

Very true

Now, about the famed Clark budget surplus of 2007 (pink). How did we do that and run a chunky deficit as a country with the rest of the world (yellow)? Easy, the banks were pumping in billions of new $ as households (grey) & businesses (blue) piled into debt cos the good times would never end. [7/n]

'We need to ensure that we save for future crises, and limit the growth of debt so that our grandchildren don't bear the burden'

'Ok ghoul, but can you explain settlement cash?'

'Why are you asking about settlement cash, idiot, that's the Reserve Bank's domain'

Ghoul-ifed, no doubt

Absolutely agree. I described in my Master’s thesis (in 2022) that these long term fiscal strategy reports are vacuous and unintellectual. While being those things too of course, this report is just absolutely maddening - reflecting only ideology. Back to the 1980s for sure.

... fat cat rentiers will say they're the 'big contributors' to NZ life - they pay the most taxes and 'lend' the Govt money to buy nice things. That's *horseshit*. Govt spend the $, rentiers gather it up, and then play the fking hero when they give some back (or buy interest-earning bonds!) [5/n]

I love Musical Chairs

In reality the Govt votes on how much to spend, and then spends brand new $ into the economy - paying nurses, builders, teachers etc. As those $ get spent, and then spent again, taxes get paid on every transaction. Govt also sells bonds - draining the economy of any 'residual' Govt cash $. [2/n]

Hell yes!

Now, let's look at retail sales vs jobs vs private debt growth. See how in 2010 we got job growth without going nuts for more debt? That was Govt fiscal and cheaper imports doing the heavy lifting - boosting domestic demand. Compare to the current *longer* slump... [4/n]

Amen!

Our financial liabilities (debts, loans, bonds, shares etc) are perfectly balanced out by our financial assets (cash, bonds, shares, etc).
In fact, that's an accounting certainty.
Our financial wealth is the mirror of our financial debt. Let's have a look at some examples... [4/n]

You'll love this Musical Chairs:
www.treasury.govt.nz/sites/defaul...