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  1. #41
    Join Date
    Oct 2016
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    228

    Default Implications of massive government borrowing?

    The govt has been borrowing tens of billions of dollars over the last few weeks and is set to continue the borrowing.

    Is that the right thing to do?

    What are the implications of this borrowing on normal people (those outside the top 1% of the wealthy)?

  2. #42
    Join Date
    Jun 2004
    Posts
    10,631

    Default

    Quote Originally Posted by Perry View Post
    Or run out seven days beforehand, so socialist Cindy can promise to restore them when / if elected.
    You should make that a prediction then hold yourself to account.
    Nice throwaway, bull**** line.

  3. #43
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    2,031

    Default

    More tax.
    Especially for the hated landlords.
    Goodbye middle class.
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  4. #44
    Join Date
    Apr 2004
    Posts
    836

    Default

    Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild

    Our brilliant leaders that couldn't run a successive small business are lining up borrowing billions(could well see 150B) from the FED ... we will in turn be at their mercy and their rating agencies .... I guess least it wasn't the Chinese they are going around lending Billions to many nations and getting deals owning many key resources and ports tech etc ..

  5. #45

    Default

    Quote Originally Posted by jack2016 View Post
    The govt has been borrowing tens of billions of dollars over the last few weeks and is set to continue the borrowing.

    Is that the right thing to do?

    What are the implications of this borrowing on normal people (those outside the top 1% of the wealthy)?
    At the moment there is a massive increase in Government debt to fund Government subsidies, benefits and the proposed budget.

    At the same time there is a significant decrease in tax revenues due to economic contraction, unemployment and a looming recession.

    This is clearly unsustainable.

    The implication is that all New Zealanders should expect tax increases, not immediately because that would impede economic recovery, but certainly post-election and medium term. I imagine income tax will increase for higher earners, fuel tax increases will be perpetual, environmental taxes will grow teeth, further reaching multi-national taxation and some form of asset tax.
    Last edited by Perry; 19-05-2020 at 09:44 AM. Reason: formatting fix

  6. #46
    Join Date
    Jan 2005
    Location
    Auckland Central
    Posts
    169

    Default

    According to the budget crown debt, as a % of GDP, appears to peak at just over 50% in 3 years. We were sitting around 20% prior to COVID-19. To give you a comparison here are some 2019 figures:

    • The top 10 highest debt-to-GDP ratios feature Japan at 237% (#1), and some of Europe’s more concerning economies: Greece (183%), Italy (132%), and Portugal (121%).
    • The world’s largest economy, the United States isn’t far behind at 106%, with China at 51% and other major economies such as the UK and Germany at 87% and 60% respectively.
    • The average for the EU is 82%, which compares to the EU’s Stability and Growth Pact requiring debt-to-GDP below 60% – or at least declining to be within acceptable limits.
    • The IMF’s “Advanced Economies” (which includes NZ) average 103% and “Emerging Market and Developing Economies” at 51%.
    • Australia’s debt-to-GDP was reported at 41%.


    These are all much larger economies than ours, so we should be aiming to have a more conservative debt to GDP ratio.

    Was it the right thing to do? What were the other options?
    Last edited by tim360; 18-05-2020 at 04:30 PM.

  7. #47
    Join Date
    Apr 2018
    Posts
    260

    Default

    Quote Originally Posted by jack2016 View Post
    The govt has been borrowing tens of billions of dollars over the last few weeks and is set to continue the borrowing.

    Is that the right thing to do?

    What are the implications of this borrowing on normal people (those outside the top 1% of the wealthy)?
    Jacinda does it for vital reasons. John Key does It to stop property plummeting 40%, so we then put the 36% he saved back into property as inflation instead of learning a lesson from it.

    I feel the implications are unimportant when it comes to saving a generation of boomers. Despite many of them being I the 1% and still claiming your fiscal tax derived pensions.

    I use to be a national voter because I thought that meant putting the interests of the nation ahead of corporate and the 1% ultra wealthy you refer to. When in fact it turns out Labour/NZFirst/Greens are putting the little guys that under pin this countries economy and our own incomes as priorities. So have swapped camps. Gareth Morgan had a LOT of good policies too, especially in combatting social wealth inequality and the environment, nor does he claim his pension and he puts his money where his cat claws are into ecology.

    So the outcomes are, our elderly stay healthy and wealthy, we retain more jobs and personal income. We end up in debt again nationally. We have paid it off many times before and we will again imo. If anything NZ is a safe haven for business and we should be doing everything we can to promote that and snear as many as we can to stay permanently to replace growing lambs and sending tourists out into the 95% deforested 100% pure NZ.

    If there is any tax implications, hopefully it is at the high end. I have no qualms about having to pay a bit more for the right things to be done as a collective people. Even though Im not in the 1% my tax would be for salaries.

    If the footballers can take 80% pay cuts, so can large business, to keep the tax off small business and individuals.

    I see NZ coming out of this better than most. I read an article of the cost to nations who went into semi lvl 4 lockdown, much like Aus did. With a drawn out return to full domestic economy.

    What is more of a worry at a personal level is the 150% personal debt inc mortgages to our GDP, prior to the virus. (driven by the inflation caused by Keys borrowing being reinvested/borrowed against)

    In all honesty, I think its not without good cause and is for the betterment of the small guy and the individuals.

    Ideas on increasing GDP;

    The big green Xmas tree.

    Now we just need to think of how we can generate tax outside personal. Oh, tax a plant harmless to the majority of 20 and over, create cafes (more small business), create farms of scientifically grown strains to treat specific ailments, own these farms before the pharmaceuticals do like in the US, replace costly harmful medications with it saving countless amounts to public health, save $80m PA on incarceration's. Of course regulate it heavily, tax it,not consumed in public, keep it NZ owned, basically do everything the DRAFT already says. There you go, that's how you help pay off $10s of billions. Of course Alochol tax helps, but the flip side the cost to health of this product is probably majorly in the positive not negative considering nobody dies from it, it replaces costly medications to Public Health (I cant imagine how many $100s of millions that is surely). A right no brainer.

    It doesn't make people lazy, people are lazy with no vices, people are lazy with alcohol. Plenty of VERY successful people consume it. Roadside death tolls potentially go down (supposedly Colarado). People between the ages of 10-18 who were previously "trialling it" are halved (statistic from Canada). And most of what I have read is it highlights people prone to psychosis, it doesn't create their pyschosis, especially if this is with adults 24 and above, but even 20-24 the development slows rapidly I believe (disclaimer do your own research don't quote mine). Of course if you are a bit mature in age you may believe an HONEST President Nixon, who basically demonised it without any scientific studies like we have 60 years later but of course his Alcohol was harmless in comparison (sarcasm inserted).

    A YES vote does not end the process from being further refined, it just means the start of refinement, which possibly could include things like raising the age to 24.

    I honestly have no interest in consuming it but once I realised how scientific strains are medicinally and the safety in comparison with brain killing pharmaceuticals and did some real studies on the harm factor, Im just miffed at how it is illegal outside people not challenging 60 year old "he said she said" rhetoric as they sip on their heavy cost to public health home medicine ;-p. But of course people are entitled to believe what they want, they will anyway no matter how much education you provide them (especially if they are Mike Hosking and or Kate Hawkesby 1%rs)

    -----

    Another concept is NZ being a Satellite business hub for many countries unable to operate and constantly going in and out of lockdown, shutting down economies. Its not like we don't have the room.

    ----

    I refuse to believe those are the only 2 other ways we could generate and or save large large amounts of GDP.

    But borrowing these billions now to keep the small guys going means with these future prospects to increase GDP/Save on Public Health etc, the back bone of our economy is still up and running.

    My 2c. Im sure people will disagree. Its a Democracy. Like they are smarter than Jacinda or Helen Clarke. Of course they are. ;-p
    Last edited by OnTheMove; 18-05-2020 at 06:51 PM.

  8. #48
    Join Date
    Apr 2018
    Posts
    260

    Default

    Quote Originally Posted by JBM View Post
    I guess least it wasn't the Chinese they are going around lending Billions to many nations and getting deals owning many key resources and ports tech etc ..
    I read an article somewhere and I wish I had saved it, but what you point to is 100% true, lending unpayable terms and seizing ports. Well if it is deemed they were Negligble internationally and take a international Sovereignty perspective (ie don't pay for negligence), the US will reclaim its costs by seizing the ports by force. It didn't sound conspiracy like either from memory. If I find it I will post it.

  9. #49
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    2,031

    Default

    Spending is increasing by 30%.
    So taxes need to increase by more than that - Government overheads and inefficiency to pay for.
    The middle class will once again be screwed over.
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  10. #50
    Join Date
    Jan 2014
    Posts
    1,035

    Default

    Is there really a middle class anymore, more like the 1%ers & the rest of the plebs! Looks like the elites are going to grab it all this time.
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".


 

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