Bill’s Magic Numbers

Written By: - Date published: 8:12 am, June 12th, 2011 - 14 comments
Categories: bill english, debt / deficit - Tags:

Bill (and John and the entire National caucus) have been telling us that we are required to borrow $380 million each and every week, so that we’re scared into accepting cuts cuts cuts to services in their budget.  Apparently we aren’t required to at all.

In fact they’ve been borrowing about $100 million extra each week – $5 billion for the year – because now’s a good time to borrow.  Which it may be, but it also helps Bill look good.

Right now, when they’re borrowing $380 million instead of $280 million, that extra $100 million of foreign loans is pushing our exchange rate up, causing harm to our businesses – who are, coincidentally, shedding jobs left, right and centre.

But come July and the new financial year, Bill has $5 billion in the bank.  His austerity budget hits as well, but it makes nothing like the difference that bringing forward borrowing does.  He can magically only borrow $100 million each week – because he’s already got the cash in hand – and claim to have done a sterling job at reducing government borrowing in the lead up to the election.

Without the additional borrowing, there’s a lot less pressure on the exchange rate, which should hopefully come down.  That, combined with a brief fillip from the Rugby World Cup should mean there isn’t the constant flow of job loss stories come election time – Bill’s ‘fixed’ the economy.

English has form on dodgy statistics – he seems to spend more time working out getting the numbers to look good that actually getting a plan together for the economy.  He came up with Key’s figures of incomes having risen 10% under National’s watch, but only 3% under Labour’s… as long as you looked at after-tax figures rather than real incomes; only included employed people, so when low-wage people lose their jobs by the tens of thousands wages ‘rise’; included Labour’s tax-cuts before the 2008 election as National’s doing; discluded any overtime; and worked on the average instead of the median, so that when bosses got 14% pay rises and workers less than 2% the number gets skewed.

No simple looking at median incomes for Bill, that’d get him the wrong result… (in fact incomes have fallen under National)

I look forward to the results of Labour’s cost of living survey, to see how many people feel better off with National’s “Brighter Future”.

14 comments on “Bill’s Magic Numbers”

  1. jackal 1

    It’s an old Mafia con to get the mark (New Zealand) into debt. Particularly if the mark has something you want, in this case our SOEs. The problem is that National is taking a huge gamble with our money, which is dependent on factors out of our control. If there is another financial crisis, National would have sunk New Zealand into a huge hole that will take centuries to dig ourselves out of.

  2. ianupnorth 2

    So nearly $90 per week for every man woman and child – good work Bill, I am sure at this rate you’ll get it to a nice round $100 by the end of the year; far sooner if the Nats get back in and those that can depart these shores.

  3. Draco T Bastard 3

    This is the type of stuff that needs to be shouted from the roof tops. It proves, quite clearly, that NAct are mismanaging our economy. I’m pretty sure you’ll find that the extra interest payments that they’re paying will cost more than what they think they’re saving.

    And, at the end of the day, a government never needs to borrow.

  4. RedLogix 4

    I linked to Brent Edwards RNZ weekly “Focus on Politics” piece late on late on Friday night, but it bears repeating:

    NZ deserves better than budget lies

    [audio src="" /]

    Covers this issue nicely. Cunliffe performs well.

  5. Colonial Viper 5

    Nothing is below Bill English and his NACT mates. Thank goodness the media finally figured it out and manned up.

  6. Lanthanide 6

    I really have to wonder who the “incomes have risen under National” line is supposed to fool?

    I guess all those un-thinking idiots on >$80k who themselves got a nice pay rise, listen to the stat and go “yeah, that’s seems about right”. There might also be some useful idiots in the $30-80k range that think similarly. Meanwhile everyone else will just hear this number and say “well I’m not better off” and wonder what he’s talking about. Seems like it can only breed distrust and discontent amongst the masses, to me.

    • Afewknowthetruth 6.1

      ‘incomes have risen under National’

      They have.

      It’s just that the cost of living has risen much faster.

      Politics is all about what is NOT articulated.

      All politicans and budding politicians steer well clear of anything connected with reality -like peak oil, fiat currency collapse, environmental collapse etc.

      • bbfloyd 6.1.1

        “incomes have risen under national”… tell that to everyone i know who works.. be prepared to be ridiculed.

  7. seeker 7

    Bill should hang his head in shame at conning an entire country.

    If he and John were in my class at school I would say that if Bill had not been so easily led by John, who is has an natural ability to gain peoples trust and then manipulate them, he would probably not have behaved so badly. Bill wants to behave honourably ,but he gets into bad company like the Nat Gang and down he goes
    John will make a good money trader for they have no need of intelligent, long term vision or strategies to improve life, just tactics to make more money for themselves. And I believe, from a video I saw on the subject, that money traders get told by the companies they work for to gain the client’s trust and then exploit them. John will be excellent at this.

    He is always positive and cheerful, when he is carrying out an older and more powerful child’s bidding so they will like him more , give him their sweets and help him rise through the ranks of the gang.

    This ability will stand him in good stead if he were to become PM for he will want the power but will have no real idea what to do with it as usual, but if told what to do by the Act gang and later by Phil O’Reilly from the Bus, Group, he will carry out their agenda and get their wishes granted easily by doing what he does best- spin to gain trust.

    • Draco T Bastard 7.1

      …that money traders get told by the companies they work for to gain the client’s trust and then exploit them.

      It’s one of the “rules” in How to Win Friends & Influence People by Dale Carnegie. In fact it’s a large part of the The Customer is always right mantra.

  8. MrSmith 8

    I find it hard to believe that Billy can borrow money on the presumption that it will be more expensive later in the year, is treasury giving him this advice?, if so it’s not worth the paper it’s printed on.
    How is he allowed to play the markets with our money, interests rates could go down later in the year for all we know.
    Home loan rate in the UK is around 0.5% I think.

    • Colonial Viper 8.1

      And the US Fed is lending the big banks newly printed money at between 0.0% and 0.5% interest rate.

      Its a rort.

      Countries get squeezed while Key’s investment banking mates get the best deals.

  9. Jenny 9

    All this spiralling debt has fuelled the neoliberal version of economic growth, of which asset price appreciation has been a fundamental driver. This asset price appreciation allowed individuals like John Key along with other financiers like him to amass huge personal fortunes.

    But at some point the reality that the debt can’t be repaid strikes home. The bailouts of banks, the US effectively printing money, is only delaying a collapse of the global economy like nothing seen before. We need to understand and prepare for history changing events.

    Chris Martenson explains the connection between economic debt and resource depletion

    Death by Debt – Chris Martenson Friday, 10 June 2011

    One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can’t be fixed. By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past. At least they are for the debt-encrusted developed nations over the short haul — and, over the long haul, across the entire soon-to-be energy-starved globe.

    Chris Martenson

    To expand on David Lange’s famous comparison of financiers to reef fish – Our government’s borrowing and increasing debt is not original and is just blindly tailing along with all the other international reef fish in which Key and his mates are but a small minnow in a swarming mass all driven by personal greed, all mindlessly following each other down the giant maw of an approaching whale shark.

    Pertinent to our government’s borrowing of $380 million a week, on the promise/hope of an eventual upturn. Chris Martenson writes:

    If everybody owes everybody else, then kicking the can down the road only works if there’s more wealth, more growth, and sufficient economic activity down that road to service the past debts. If any one participant drops the baton in the debt relay race, the absurdity of the situation becomes unavoidable and the cause is lost.
    When we hold this view, it is abundantly clear that adding more debt along the way only increases the burdens and is therefore ultimately counterproductive, although it does grant the gift of additional time to avoid facing the truth.

    Ominously Martenson writes:

    …..there are no historical examples of any country ever digging itself out from so deep a hole, and yet we find that the entire developed world has bravely pushed itself deep into unknown territory, seemingly without any serious discussions about whether or not this made sense.

    • David 9.1

      Nice post Jenny: I am thinking the ultimate longer term effects of overleveraging (and yes its ideological framing) have not even begun to dawn on us yet.

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