@McFlock
Put this here because it was OT in thread.
For example, I tend to suspect (I’m not sure, it just seems reasonable on the face of it) that supply of money has some input as to its value, for which some social credit type folks have suggested I’m basically following rogernomics, and we can print as much cash as we want (billions) with no impact on the exchange rate or inflation.
It’s not just creation money though – you have to include it’s destruction. The cycle should go:
Government >> economy >> government
The money’s return to government is actually it’s destruction. Under those conditions then inflation can be minimal.
As for the exchange value – that needs to be set by a formula (essentially imports/exports) rather than the wishful thinking of the speculators.
Spend available for provision of government services is the amount needed to provide those services – no more, no less.
This spending then gets spent into the private sector causing multiplier effect (usually around 3 times).
Overall tax @ 33% to have return to government balance.
It would be government spending, including the UBI, that provides the entire money supply for the economy to work. This:
1. Removes poverty
2. Eliminates the business cycle
3. and removes the need for infinite exponential growth on a finite world.
why?…because you claim a tax rate of 33% and a multiplier of 3 …that requires a zero savings and import rate
and we don’t need savings? would love to hear your explanation of how anyone is going to purchase anything that costs more than say a weeks “wages”( while eating and being housed)…and that also suggests all ownership will have be by the state for there will be no ability for private investment…and placing it in a bank (even at zero interest) still removes it from circulation and negatively impacts ME
but the best of all is how you propose to administer the inevitable demand for more. and the inflationary spiral that creates.?..even in a totally closed economy which while possible is extremely unlikely
It’s not Money in >> Money out and that’s it, nobodies got any money and nothing happened as you seem to think.
and we don’t need savings?
No we don’t. Savings aren’t needed to buy cars. It’s supposedly needed to make investments but it’s not needed for that either.
And, of course, people would still be able to put money aside to buy larger stuff.
but the best of all is how you propose to administer the inevitable demand for more.
And how did I propose to do that?
and the inflationary spiral that creates.?
There’s no inflationary spiral as the money is balanced. Unlike now where the money into the system isn’t balanced resulting in high house price inflation.
your understanding of the multiplier effect which you cited..
Possible. The multiplier effect won’t be the same in a Sovereign Money financial system as in the current system.
I’m thinking that it would be more of a measure of how many transactions money will go through before it’s fully returned/destroyed. I was making an assumption, based upon the present multiplier usually being ~3, that it would be about the same.
Thinking about it some more that assumption is most likely low which means that the overall tax rate would be lower. Would probably need a FTT.
“No we don’t. Savings aren’t needed to buy cars. It’s supposedly needed to make investments but it’s not needed for that either.”
Didn’t mention cars, but if you maintain savings are not needed (though you then contradict yourself by stating monies can be put aside for larger stuff….otherwise known as savings) one can only assume that either the government will lend or gift monies for large purchases or that money itself will cease to be.
“And how did I propose to do that?”
you haven’t ….and that is the point.You have ignored the increasing demand by a society that only has to bring political pressure to obtain more or the same for less, how does your model propose to deal with that? This speaks to the inflationary spiral that would be created.
If what you have outlined here is a genuine model then you should at least be up front and admit the only way it would have a chance of successfully operate (at least briefly) would mean the end of private ownership, a completely closed economy that is likely to become increasingly unsophistocated and a totalitarian state that is mandated by the majority with no protection for dissenters….think we’ve seen where that leads..
So basically, you’re borrowing against the government’s income next year, as opposed to the government’s income this year. And if the money back doesn’t meet the money you’d spent, it’s inflationary.
How is that different from the standard bonds the reserve bank lends to banks? I can see why “lending” it to central government for infrastructure development rather than just to inflate the banking sector, but what you describe still requires conventional, basic budgeting, not a currently untapped source of revenue.
So basically, you’re borrowing against the government’s income next year
Nope.
Government creates the money
Spends it into the economy
Taxes money back out of the economy (destroys money)
No borrowing at all.
The economy is a continuous cycle.
And if the money back doesn’t meet the money you’d spent, it’s inflationary.
Nope. Growing economy requires a growing volume of money. Of course, sovereign money can also be used to turn the economy into a Stable State Economy.
How is that different from the standard bonds the reserve bank lends to banks?
These would no longer exist. Banks would not be able to borrow from the RBNZ.
Also, the government borrowing from the private sector would also not exist.
but what you describe still requires conventional, basic budgeting, not a currently untapped source of revenue.
But you said that to maintain the overall level at zero change (to avoid inflation), the government had to “destroy” a dollar for every dollar it created.
The money only does any good if the government spends it, gives it to other people. Pays a UBI, pays road workers, whatever.
To get it back to destroy it, the government needs to levy a tax or gain profit from a transaction.
You’re plugging extra money into the economy this year, but you need to avoid creating inflation by taking back a matching amount of money in taxes.
Let’s say you have annual tax revenue of 100bil in a country with a gdp of 300bil. You want to buy everyone a UBIferrari, at an additional cost of 40bil, so you print the required cash. Next year you need to raise $140bil in taxes and destroy 40bil of it, and your gdp is 340bil, so you’ve got ~12% increase in gdp and cash supply while the invented cash is still in the economy.
So you’re still left with government expenditure cuts or tax increases to maintain the monetary balance.
You want to buy everyone a UBIferrari, at an additional cost of 40bil, so you print the required cash.
But the government doesn’t buy everyone a Ferrari now does it? Really, why would you come up with such a stupid example?
What it does is spend money to provide government services (Police, justice, etc). and the UBI. These people now have money which they want to spend. They spend it into the private sector.
As the money moves through the economy it’s taxed in various ways (returned to government). These taxes result in the money being destroyed.
So you’re still left with government expenditure cuts or tax increases to maintain the monetary balance.
Which bit about the government spending being balanced by taxes didn’t you understand?
And, no, you wouldn’t have to cut government services – ever. In fact, doing so would probably cause a recession because the money that the government is spending is the full and total supply of money for the economy.
I really can’t make it any simpler.
Government creates money
Government spends money into the economy via government services
Government taxes money back out of the economy destroying the money
It’s not necessarily to finance government spending but it is necessary to keep money circulating, other wise it goes stagnant and festers in speculative property prices.
If Graham Hart spent the amount of money McFlock suggests in what’s called the permanent money hypotheses Graham would explode in 20 secounds because of the heat generated from spending, so Graham simply can’t spend that amount of money, the role of taxation is to put it back into the hands of those who will spend.
It’s not necessarily to finance government spending but it is necessary to keep money circulating, other wise it goes stagnant and festers in speculative property prices.
Or stimulus from deficit spending, or even cutting corporate taxes can cause inflation, (at the risk of receiving a ban for mentioning Trumps name) Trumpism, there are so many ways to boost demand, my point is if MrFlock would try google first he wouldn’t come across as such an asshole
I chose an absurd example (actually “UBIferrari”) because the what is irrelevant to the discussion: it could be a UBI, earthquake repairs, or a moonbase.
The fact is that you’re still tying government expenditure to government income. In a particularly inefficient way. Because, like most economic theories, your model is to simplistic.
You want to spend money now in order to tax it back later. But rather than doing it with bonds (and addidng a “debt servicing” line item to the annual budget that’s a small proportion of what you actually borrowed), by flooding the economy in new money you necessitate getting it back as soon as possible. The end sum might be zero, but in my example you’ve still increased the money supply by 40bil until you’ve taxed it back. And artificial boom/bust cycle.
And how would you tax it back – monthly or quarterly variations in PAYE? How would that effect folks’ wallets? Or annually bounce the tax rate 15% up or down depending on what you want to build this year? you reckon that’s electorally sustainable? Again, for simply the same result: government expenditure that’s constrained by government income.
You want to spend money now in order to tax it back later.
We’re not starting at zero. We already have the government taxing and spending.
But rather than doing it with bonds (and addidng a “debt servicing” line item to the annual budget that’s a small proportion of what you actually borrowed)
The government shouldn’t borrow money – ever. It has no need to as it can create money and not have interest charged on it. Just so long as it then destroys that money through taxation.
Why do people insist that the government has to pay interest on money?
The end sum might be zero, but in my example you’ve still increased the money supply by 40bil until you’ve taxed it back. And artificial boom/bust cycle.
And that is why your thinking fails. You think that the economy is static rather than a continuous flow.
Again, for simply the same result: government expenditure that’s constrained by government income.
Can you point me to where I said it would be otherwise?
What I said is that government spending through government services and the UBI should be the total money available to the economy. That this would stabilise the economy eliminating the ‘business cycle’ and poverty.
I don’t believe the economy is either static or a continuous flow.
I think there are lag times and elastic relationships throughout the economy, and my concern with your plan is that it causes a surge throughout the system, followed by a corresponding low pressure zone. And that causes more stress to individuals in the system, breaking some of them.
Whereas conventional tax/borrow and spend government policies don’t have that lag period where there’s a sudden boost in money supply on top of everything else.
and my concern with your plan is that it causes a surge throughout the system, followed by a corresponding low pressure zone
But it doesn’t and that thinking is that of a static model.
Whereas conventional tax/borrow and spend government policies don’t have that lag period where there’s a sudden boost in money supply on top of everything else.
The sudden boost in money supply that we’re seeing now is from the private banks creating huge amounts of money in lending for houses and offshore buyers of our housing.
Well, perhaps there is some niche economic definition of “static” – but I meant it in the conventional meaning of lacking in movement, action or change. Which is impossible in a system that has pressure waves, which by definition are change. But either way, simply saying that the model is “widget” doesn’t mean it’s wrong.
How does one create cash and avoid inflation in the period between when government pays the people and when it taxes that amount back off them?
The current boost in money supply is intentional policy by the reserve bank which is using a blunt tool to face a complex problem: a largely stagnant economy with one single sector that’s massively overinflated in price due to long term supply shortfalls.
That is a separate issue to whether your concept of printing (then destroying) money adds any advantage over the current conventions of managing government accounts.
How does one create cash and avoid inflation in the period between when government pays the people and when it taxes that amount back off them?
See, you’re thinking that one thing happens and then the next thing happens at a later time when both will be happening simultaneously. The former is static model thinking.
The current boost in money supply is intentional policy by the reserve bank which is using a blunt tool to face a complex problem:
Actually, it’s been the intentional policy of the government for the last ~30 years who legislated what the RBNZ was going to do, gave it the tools to do that and removed capital movement restrictions.
That is a separate issue to whether your concept of printing (then destroying) money adds any advantage over the current conventions of managing government accounts.
Actually, it gives advantage to the entire economy and not just the governments books:
1. By removing the private banks ability to create money it stabilises the economy from that direction. No more banks creating huge amounts and then panicking and stopping creating any thus throwing the country into recession/depression
2. They’ll be no need to borrow offshore to utilise our own resources as they’ll be plenty of money available
3. By ensuring that there is a constant influx of money into the system via the UBI ensures that there will always be a demand for businesses to supply
4. The UBI will ensure that everyone who wants to will be able to get a good education
5. The UBI will allow people to be entrepreneurial by ensuring that they don’t drop into poverty if their idea fails
6. The removal of interest bearing debt from government removes the need for continued growth
See, you’re thinking that one thing happens and then the next thing happens at a later time when both will be happening simultaneously. The former is static model thinking.
It seems to me that you’re trying to have it both ways: you said “As the money moves through the economy it’s taxed in various ways (returned to government). “. That means there’s a lag between when the money is distributed and when the same amount of money is finally returned via taxes. If there’s a lag then there’s a period of substantially increased money supply. If there’s no lag, then you’re not “creating” money, you’re simply transferring tax revenue into expenditure in exactly the same way it’s currently done.
Actually, it [“printing (then destroying) money”-mcf] gives advantage to the entire economy and not just the governments books:
1. By removing the private banks ability to create money it stabilises the economy from that direction. No more banks creating huge amounts and then panicking and stopping creating any thus throwing the country into recession/depression
Yes and no. It bypasses the fractional reserve system (which is merely a multiplier of the OCR tool, not an integral part), but that doesn’t mean that the banks will contribute any less to boom and bust speculative cycles.
2. They’ll be no need to borrow offshore to utilise our own resources as they’ll be plenty of money available
Borrowing, either directly or by simply printing cash and borrowing that off future taxpayers, is a sign of insufficient taxation right now.
3. By ensuring that there is a constant influx of money into the system via the UBI ensures that there will always be a demand for businesses to supply
That is a benefit of a UBI in particular, but yes does apply to other government expenditure if it’s done wisely. IMO most importantly the government expenditure needs to go into the regions so it can flow back into the urban centres then the corporates, rather than just swilling around a few key CBDs.
4. The UBI will ensure that everyone who wants to will be able to get a good education
Nah. That’s what the education system is for.
5. The UBI will allow people to be entrepreneurial by ensuring that they don’t drop into poverty if their idea fails
Fair enough, but this isn’t about the benefits of a UBI, it’s about how some UBI proponents intend to pay for it.
6. The removal of interest bearing debt from government removes the need for continued growth
but printing money simply substitutes interest payments for boosts to inflation. Growth is therefore still necessary.
That means there’s a lag between when the money is distributed and when the same amount of money is finally returned via taxes. If there’s a lag then there’s a period of substantially increased money supply.
Nope because the taxes would go up at the same time that spending goes up. If spending doesn’t go up then taxes don’t go up.
And we’re not starting at a zero point. We already have a monetary flow. There’d be a transition period when inflation may be a little higher than normal but I doubt if it would last long.
It bypasses the fractional reserve system (which is merely a multiplier of the OCR tool, not an integral part), but that doesn’t mean that the banks will contribute any less to boom and bust speculative cycles.
Yeah, actually, it does:
1. The banks will no longer be able to leverage minimal funds into massive loans. They’re strictly limited to what they have on deposit for on-lending and the people who so deposited it won’t be able to spend it either thus removing that piece of leveraging as well
2. If a few people lose their money from speculation so what? The constant flow of money from the government will ensure that loss with have minimal feed on effects. Mostly, the banks won’t suddenly stop creating money and throwing us all into recession as happened in the GFC
Borrowing, either directly or by simply printing cash and borrowing that off future taxpayers
Creating money which is then spent directly into the economy producing economic activity now is not borrowing.
Nah. That’s what the education system is for
People need to be able to afford to go and get that education and that’s what the UBI will do.
but printing money simply substitutes interest payments for boosts to inflation.
But creating money doesn’t automatically translate into inflation – as the vast printing of money around the world after the GFC proved.
Nope because the taxes would go up at the same time that spending goes up. If spending doesn’t go up then taxes don’t go up.
So how does that differ with what blinglish currently does every year?
And we’re not starting at a zero point. We already have a monetary flow. There’d be a transition period when inflation may be a little higher than normal but I doubt if it would last long.
Ok, so there will be inflation, now we’re just quibbling over how large and sustained it will be.
It bypasses the fractional reserve system (which is merely a multiplier of the OCR tool, not an integral part), but that doesn’t mean that the banks will contribute any less to boom and bust speculative cycles.
Yeah, actually, it does:
1. The banks will no longer be able to leverage minimal funds into massive loans. They’re strictly limited to what they have on deposit for on-lending and the people who so deposited it won’t be able to spend it either thus removing that piece of leveraging as well
2. If a few people lose their money from speculation so what? The constant flow of money from the government will ensure that loss with have minimal feed on effects. Mostly, the banks won’t suddenly stop creating money and throwing us all into recession as happened in the GFC
It wasn’t the creation of money that created the GFC, it was the outright frauds that were committed with that money, that then made the banks terrified of lending money to each other in order to settle daily debts and tallies. They created a pyramid of bad loan packages, then as soon as the music stopped playing all the bankers dropped those hot potatoes so they wouldn’t get caught with their pants down (abuse of allegorical language intentional 🙂 ).
Creating money which is then spent directly into the economy producing economic activity now is not borrowing.
It is if taxpayers have to make it up, even in the near-immediate future.
but printing money simply substitutes interest payments for boosts to inflation.
But creating money doesn’t automatically translate into inflation – as the vast printing of money around the world after the GFC proved.
Well, yes it does. That’s why they did it: boost GDP with the corresponding effect on inflation. Because they were at extreme risk of deflation and depression.
Maybe if we take a step back because interest rates set the rate at which you can borrow from the reserve bank but they are apart of the cost when settling transactions between different banks, and banks hang on to reserve in case the housing sector has a massive run on for cash, and they never pass on full rate cuts. But if you take interest away banks themselves still have guides to take on crises, and that’s just in case there’s a fiscal demand for cash.
So how does that differ with what blinglish currently does every year?
The current system actually borrows the money at interest. The government borrows from private banks which create the money at the time. The addition of interest means that it can never be fully paid back which means we have an expanding monetary base.
Never mind the fact that the private banks also create money when they make a loan to private individuals as well.
Sovereign Money gets rid of that. It has the continuous creation and destruction of money needed to keep the economy moving but it doesn’t have the interest component that forces growth. A stable state economy would work.
They created a pyramid of bad loan packages, then as soon as the music stopped playing all the bankers dropped those hot potatoes so they wouldn’t get caught with their pants down (abuse of allegorical language intentional 🙂 ).
The entire banking sector is a Ponzi Scheme – see above – which is why it fell over.
Well, yes it does. That’s why they did it: boost GDP with the corresponding effect on inflation. Because they were at extreme risk of deflation and depression.
No it doesn’t.
Yes, that is one of the reasons why they printed so much money but the inflation didn’t actually eventuate. The other reason, and probably the main one, that they printed so much was to prop up the banks. If the Ponzi Scheme that the private banks run collapsed the way it should have then, yes, we would have been in a depression.
Of course, the best thing that they could have done to prevent a depression is implement a UBI and let the banks collapse. Instead they gave it all to the banks which then kept it instead of loaning it out for productive activity.
A UBI would have prevented a recession, kept local businesses going and allowed the market to correct for the banks fraudulent activities.
The addition of interest means that it can never be fully paid back which means we have an expanding monetary base.
Bullshit. Of course it can be paid off, with interest.
And the “sovereign debt” equivalent of interest is the systemic costs of the inflation it creates, even temporarily.
Yes, that is one of the reasons why they printed so much money but the inflation didn’t actually eventuate.
or it did eventuate and without it the world would have gone into a deflationary spiral.
The other reason, and probably the main one, that they printed so much was to prop up the banks. If the Ponzi Scheme that the private banks run collapsed the way it should have then, yes, we would have been in a depression.
agreed.
Of course, the best thing that they could have done to prevent a depression is implement a UBI and let the banks collapse. Instead they gave it all to the banks which then kept it instead of loaning it out for productive activity.
Nah. The best thing they could have done was buy all the bad loans at crap market rates and renegotiate sustainable repayment terms for the borrowers, thereby starting one of the biggest state housing programmes in decades if not history.
Profit gouging (especially by multinationals, e.g. bank interest) is also destruction of money, if there’s a weak tax regime (or tax haven) and no reciprocal investment back into NZ
Similarly, GST & income tax is a highly regressive drag on the economy and devalues the work of the many, whereas the top few % rich in assets pay relatively no tax. In fact, because of the property bubble there are thousands of lucky/privileged/entitled Aucklanders whose net tax is probably less than zero.
On Planet Key, the wealthy pay no tax, and the poor get taxed on all income over $1
As I said in the rest of that sentence. Unfortunately, Aussie banks are destroying value by extracting billions from the NZ economy per year without commensurate spend back in to NZ
Yep, the dead-weight loss of profit. I’m quite aware of it but it not destroying the money. It can still be spent and it’s usually spent on assets thus driving asset price bubbles.
Same with privatisation, offset the blame, a whole bunch of people with their hands in the air singing ‘It wasn’t me’ til you get to the poor shmo on minimum wage at the bottom of the ladder ‘It’s all his fault!’.
More of this national government and there worshipers failing to take any responsibility for anything the have wreaked over the last 8 years of office.
Nothing to do with chronic lack of resourcing in Police and cutting mental health services so that Bill English can put some nice numbers in a fucking spreadsheet…
This is awful broadcasting. And this is what the Horrid want to do with the NZOA funding changes. They want to contest for public funding to produce this kind of crap.
Ha ha. I was lucky enough just now to watch the super big Moon-rise at about 68degrees from North in Blenheim. A lovely golden colour and just huge. Don’t think I will be around to see the next one.
I do hope you have at least another 18 years in you. The full moon will be even closer on 26 November 2034. And there’s a total solar eclipse directly over the South Island in 2028 to tide you over.
I've seen these days before and I can tell you it doesn't end well for the common folk. https://t.co/oFe1la0V6n— Harry Leslie Smith (@Harryslaststand) November 13, 2016
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I live my life (woo-ooh-ooh)With no control in my destinyYea-yeah, yea-yeah (woo-ooh-ooh)I can bleed when I want to bleedSo come on, come on (woo-ooh-ooh)You can bleed when you want to bleedYea-yeah, come on (woo-ooh-ooh)Everybody bleed when they want to bleedCome on and bleedGovernments face tough challenges. Selling unpopular decisions to ...
Please note:To skip directly to the- parliamentary footage in the video, scroll to 1:21 To skip to audio please click on the headphone iconon the left hand side of the screenThis video / audio section is under development. ...
Given the crackdown on wasteful government spending, it behooves me to point to a high profile example of spending by the Luxon government that looks like a big, fat waste of time and money. I’m talking about the deployment of NZDF personnel to support the US-led coalition in the Red ...
TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:40 am on Wednesday, July 24 are:Deep Dive: Chipping away at the housing crisis, including my comments RNZ/Newsroom’s The DetailNews: Government softens on asset sales, ...
As I reported about the city centre, Auckland’s rail network is also going through a difficult and disruptive period which is rapidly approaching a culmination, this will result in a significant upgrade to the whole network. Hallelujah. Also like the city centre this is an upgrade predicated on the City ...
Today, a 4 kilogram report will be delivered to Parliament. We know this is what the report of the Royal Commission of Inquiry into Abuse in State and Faith-based Care weighs, because our Prime Minister told us so.Some reporter had blindsided him by asking a question about something done by ...
TL;DR: As of 7:00 am on Wednesday, July 24, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:Beehive:Transport Minister Simeon Brownannounced plans to use PPPs to fund, build and run a four-lane expressway between Auckland ...
NewstalkZB host Mike Hosking, who can usually be relied on to give Prime Minister Christopher Luxon an easy run, did not do so yesterday when he interviewed him about the HealthNZ deficit. Luxon is trying to use a deficit reported last year by HealthNZ as yet another example of the ...
Back in January a StatsNZ employee gave a speech at Rātana on behalf of tangata whenua in which he insulted and criticised the government. The speech clearly violated the principle of a neutral public service, and StatsNZ started an investigation. Part of that was getting an external consultant to examine ...
Renting for life: Shared ownership initiatives are unlikely to slow the slide in home ownership by much. Photo: Lynn Grieveson / The KākāTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:A Deloittereport for Westpac has projected Aotearoa’s home-ownership rate will ...
You're broken down and tiredOf living life on a merry go roundAnd you can't find the fighterBut I see it in you so we gonna walk it outAnd move mountainsWe gonna walk it outAnd move mountainsAnd I'll rise upI'll rise like the dayI'll rise upI'll rise unafraidI'll rise upAnd I'll ...
There’s been a change in Myers Park. Down the steps from St. Kevin’s Arcade, past the grassy slopes, the children’s playground, the benches and that goat statue, there has been a transformation. The underpass for Mayoral Drive has gone from a barren, grey, concrete tunnel, to a place that thrums ...
This is a re-post from Yale Climate Connections Global society may have finally slammed on the brakes for climate-warming pollution released by human fossil fuel combustion. According to the Carbon Monitor Project, the total global climate pollution released between February and May 2024 declined slightly from the amount released during the same ...
TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:00 am on Tuesday, July 23 are:Deep Dive: Penlink: where tolling rhetoric meets reality BusinessDesk-$$$’sOliver LewisScoop:Te Pūkenga plans for regional polytechs leak out ...
TL;DR: As of 6:00 am on Tuesday, July 23, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:Health: Shane Reti announcedthe Board of Te Whatu Ora-Health New Zealand was being replaced with Commissioner Lester Levy ...
Health NZ warned the Government at the end of March that it was running over Budget. But the reasons it gave were very different to those offered by the Prime Minister yesterday. Prime Minister Christopher Luxon blamed the “botched merger” of the 20 District Health Boards (DHBs) to create Health ...
Long ReadKey Summary: Although National increased the health budget by $1.4 billion in May, they used an old funding model to project health system costs, and never bothered to update their pre-election numbers. They were told during the Health Select Committees earlier in the year their budget amount was deficient, ...
As a momentous, historic weekend in US politics unfolded, analysts and commentators grasped for precedents and comparisons to help explain the significance and power of the choice Joe Biden had made. The 46th president had swept the Democratic party’s primaries but just over 100 days from the election had chosen ...
TL;DR: I’m casting around for new ideas and ways of thinking about Aotearoa’s political economy to find a few solutions to our cascading and self-reinforcing housing, poverty and climate crises.Associate Professor runs an online masters degree in the economics of sustainability at Torrens University in Australia and is organising ...
The Finance and Expenditure Committee has reported back on National's Local Government (Water Services Preliminary Arrangements) Bill. The bill sets up water for privatisation, and was introduced under urgency, then rammed through select committee with no time even for local councils to make a proper submission. Naturally, national's select committee ...
Some years ago, I bought a book at Dunedin’s Regent Booksale for $1.50. As one does. Vandrad the Viking (1898), by J. Storer Clouston, is an obscure book these days – I cannot find a proper online review – but soon it was sitting on my shelf, gathering dust alongside ...
History is not on the side of the centre-left, when Democratic presidents fall behind in the polls and choose not to run for re-election. On both previous occasions in the past 75 years (Harry Truman in 1952, Lyndon Johnson in 1968) the Democrats proceeded to then lose the White House ...
This is a free articleCoverageThis morning, US President Joe Biden announced his withdrawal from the Presidential race. And that is genuinely newsworthy. Thanks for your service, President Biden, and all the best to you and yours.However, the media in New Zealand, particularly the 1News nightly bulletin, has been breathlessly covering ...
A homeless person’s camp beside a blocked-off slipped damage walkway in Freeman’s Bay: we are chasing our tail on our worsening and inter-related housing, poverty and climate crises. Photo: Photo: Lynn Grieveson / The KākāTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy ...
What has happened to it all?Crazy, some'd sayWhere is the life that I recognise?(Gone away)But I won't cry for yesterdayThere's an ordinary worldSomehow I have to findAnd as I try to make my wayTo the ordinary worldYesterday morning began as many others - what to write about today? I began ...
TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:00 am on Monday, July 22 are:Today’s Must Read: Father and son live in a tent, and have done for four years, in a million ...
TL;DR: As of 7:00 am on Monday, July 22, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:US President Joe Biden announced via X this morning he would not stand for a second term.Multinational professional services firm ...
A listing of 32 news and opinion articles we found interesting and shared on social media during the past week: Sun, July 14, 2024 thru Sat, July 20, 2024. Story of the week As reflected by preponderance of coverage, our Story of the Week is Project 2025. Until now traveling ...
This weekend, a friend pointed out someone who said they’d like to read my posts, but didn’t want to pay. And my first reaction was sympathy.I’ve already told folks that if they can’t comfortably subscribe, and would like to read, I’d be happy to offer free subscriptions. I don’t want ...
National: The Party of ‘Law and Order’ IntroductionThis weekend, the Government formally kicked off one of their flagship policy programs: a military style boot camp that New Zealand has experimented with over the past 50 years. Cartoon credit: Guy BodyIt’s very popular with the National Party’s Law and Orderimage, ...
Day one of the solo leg of my long journey home begins with my favourite sound: footfalls in an empty street. 5.00 am and it’s already light and already too warm, almost.If I can make the train that leaves Budapest later this hour I could be in Belgrade by nightfall; ...
Do you remember Y2K, the threat that hung over humanity in the closing days of the twentieth century? Horror scenarios of planes falling from the sky, electronic payments failing and ATMs refusing to dispense cash. As for your VCR following instructions and recording your favourite show - forget about it.All ...
Climate Change Minister Simon Watts being questioned by The Kākā’s Bernard Hickey.TL;DR: My top six things to note around housing, climate and poverty in Aotearoa’s political economy in the week to July 20 were:1. A strategy that fails Zero Carbon Act & Paris targetsThe National-ACT-NZ First Coalition Government finally unveiled ...
Summary:As New Zealand loses at least 12 leaders in the public service space of health, climate, and pharmaceuticals, this month alone, directly in response to the Government’s policies and budget choices, what lies ahead may be darker than it appears. Tui examines some of those departures and draws a long ...
The Minister of Housing’s ambition is to reduce markedly the ratio of house prices to household incomes. If his strategy works it would transform the housing market, dramatically changing the prospects of housing as an investment.Leaving aside the Minister’s metaphor of ‘flooding the market’ I do not see how the ...
As previously noted, my historical fantasy piece, set in the fifth-century Mediterranean, was accepted for a Pirate Horror anthology, only for the anthology to later fall through. But in a good bit of news, it turned out that the story could indeed be re-marketed as sword and sorcery. As of ...
An employee of tobacco company Philip Morris International demonstrates a heated tobacco device. Photo: Getty ImagesTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy on Friday, July 19 are:At a time when the Coalition Government is cutting spending on health, infrastructure, education, housing ...
TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 8:30 am on Friday, July 19 are:Scoop: NZ First Minister Casey Costello orders 50% cut to excise tax on heated tobacco products. The minister has ...
Kia ora, it’s time for another Friday roundup, in which we pull together some of the links and stories that caught our eye this week. Feel free to add more in the comments! Our header image this week shows a foggy day in Auckland town, captured by Patrick Reynolds. ...
TL;DR : Here’s the top six items climate news for Aotearoa this week, as selected by Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer. A discussion recorded yesterday is in the video above and the audio of that sent onto the podcast feed.The Government released its draft Emissions Reduction ...
Save some money, get rich and old, bring it back to Tobacco Road.Bring that dynamite and a crane, blow it up, start all over again.Roll up. Roll up. Or tailor made, if you prefer...Whether you’re selling ciggies, digging for gold, catching dolphins in your nets, or encouraging folks to flutter ...
Waiting In The Wings:For truly, if Trump is America’s un-assassinated Caesar, then J.D. Vance is America’s Octavian, the Republic’s youthful undertaker – and its first Emperor.DONALD TRUMP’S SELECTION of James D. Vance as his running-mate bodes ill for the American republic. A fervent supporter of Viktor Orban, the “illiberal” prime ...
TL;DR: As of 6:00 am on Friday, July 19, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:The PSAannounced the Employment Relations Authority (ERA) had ruled in the PSA’s favour in its case against the Ministry ...
Te Rangi e tu nei (The sky above us) Te Papa e takoto nei (The land beneath us) Tatou katoa te hunga ora (To us all the living) Tena koutou katoa (Greetings) ...
A late change to charter school legislation will cheat educators out of fair pay and negotiating power proving charter schools are just a vehicle to make profit out of our education system. ...
In 2004 te iwi Māori rallied against the Crown’s attempt to confiscate our coastlines and moana with the Foreshore and Seabed Act. This led to the largest hīkoi of a generation and the birth of Te Pāti Māori. 20 years later, history is repeating itself. Today the government has announced ...
It has been five and a half years since the Royal Commission of Inquiry into Abuse in Care was established to investigate the abuse of children, young people, and vulnerable adults within state and faith-based institutions. Yesterday, the final report - Whanaketia through pain and trauma, from darkness to light ...
The Green Party is calling on the Government to take action off the back of the International Court of Justice ruling on Israel’s illegal occupation of Palestine. ...
On Friday the International Court of Justice reaffirmed what Palestinian’s have been telling us for decades: that the occupation and colonisation of Palestinian lands by Israel is illegal and must end immediately. They also called for reparations for Palestinian’s who have lived under Israeli occupation since it began in 1967. ...
Labour calls on the Government to act after the International Court of Justice (ICJ) ruled that Israel’s occupation of Palestinian Territories is illegal. ...
The 53.7 percent rise in benefit sanctions over the last year is more proof of this Government’s disdain for our communities most in need of support. ...
Aotearoa could be a country where every child grows up feeling safe, loved and with a sense of belonging in their whānau and community. But for some of our children, this is far from reality. Instead, they are trapped in a maze of intergenerational harm that they can’t escape on ...
Te Pāti Māori are calling for David Seymour to resign as Associate Health Minister in response to his call for Pharmac to ignore the Treaty of Waitangi. “This announcement is just another example of the government’s anti-Tiriti, anti-Māori agenda.” Said Co-leader and spokesperson for health, Debbie Ngarewa-Packer. “Seymour thinks it ...
The soaring price of renting is driving the rise of inflation in this country - with latest figures from Stats NZ showing rents are up 4.8 per cent on average while annual inflation is at 3.3 per cent. ...
National’s Emissions Reduction Plan will take New Zealand further from the economy we need to ensure the next generation has a stable climate and secure livelihoods. ...
Following consultation with named parties and thorough consideration of privacy interests, the Green Party is in a position to release the Executive Summary of the final report from the independent investigation into Darleen Tana. ...
Prime Minister Christopher Luxon should be asking serious questions of his Minister for Resources Shane Jones now it’s been revealed he misled the public about a dinner with mining companies that he didn’t declare and said wasn’t pre-arranged. ...
Te Pāti Māori have submitted to the Justice Select Committee against the Sentencing (Reinstating Three Strikes) Amendment Bill. The bill will further entrench racism in our justice system and fails to focus on rehabilitation. “Reinstating Three Strikes will empower a systematically racist system and exacerbate the overrepresentation of Māori in ...
The Transport and Infrastructure Committee is set to make a determination on the Residential Tenancies Amendment (RTA) Bill in the coming weeks. “This legislation will give landlords the power to kick our whānau out onto the street for no reason” said Housing spokesperson, Mariameno Kapa-Kingi. “Their solution to the housing ...
“National’s campaign was about tackling crime and the best they can do is a two-year long Ministerial Advisory Group,” Labour justice spokesperson Duncan Webb said. ...
“There are more examples of charter schools failing their students than there are success stories. The coalition Government is driving to dismantle our public school system and instead promote a privatised, competitive structure that puts profits before kids,” Jan Tinetti said. ...
“This government is choosing to deliberately mislead and withhold information, keeping our people in the dark about this government’s agenda and the future of our mokopuna,” said co-leader and spokesperson for Health, Debbie Ngarewa-Packer. The call comes after the demand from the Chief Ombudsman that Associate Minister of Health, Casey ...
“Today’s climate announcement by Simon Watts makes clear the National Government is simply paying lip service to meeting its climate change targets,” Megan Woods said. ...
National is choosing to make life harder for workers by taking away the rights our communities have fought hard for. Here's how they’re taking workers backwards. ...
Australia, Canada and New Zealand today issued the following statement on the need for an urgent ceasefire in Gaza and the risk of expanded conflict between Hizballah and Israel. The situation in Gaza is catastrophic. The human suffering is unacceptable. It cannot continue. We remain unequivocal in our condemnation of ...
Attorney-General Judith Collins today reminded all State and faith-based institutions of their legal obligation to preserve records relevant to the safety and wellbeing of those in its care. “The Abuse in Care Inquiry’s report has found cases where records of the most vulnerable people in State and faith‑based institutions were ...
Minister of Internal Affairs Brooke van Velden says the Government’s online safety website for children and young people has reached one million page views. “It is great to see so many young people and their families accessing the site Keep It Real Online to learn how to stay safe online, and manage ...
Tēnā tātou katoa, Ngā mihi te rangi, ngā mihi te whenua, ngā mihi ki a koutou, kia ora mai koutou. Thank you for the opportunity to be here and the invitation to speak at this 50th anniversary conference. I acknowledge all those who have gone before us and paved the ...
New Zealand’s payroll providers have successfully prepared to ensure 3.5 million individuals will, from Wednesday next week, be able to keep more of what they earn each pay, says Finance Minister Nicola Willis and Revenue Minister Simon Watts. “The Government's tax policy changes are legally effective from Wednesday. Delivering this tax ...
An experimental vineyard which will help futureproof the wine sector has been opened in Blenheim by Associate Regional Development Minister Mark Patterson. The covered vineyard, based at the New Zealand Wine Centre – Te Pokapū Wāina o Aotearoa, enables controlled environmental conditions. “The research that will be produced at the Experimental ...
The Coalition Government has confirmed the indicative regional breakdown of North Island Weather Event (NIWE) funding for state highway recovery projects funded through Budget 2024, Transport Minister Simeon Brown says. “Regions in the North Island suffered extensive and devastating damage from Cyclone Gabrielle and the 2023 Auckland Anniversary Floods, and ...
Indonesia’s Foreign Minister, Retno Marsudi, will visit New Zealand next week, Foreign Minister Winston Peters has announced. “Indonesia is important to New Zealand’s security and economic interests and is our closest South East Asian neighbour,” says Mr Peters, who is currently in Laos to engage with South East Asian partners. ...
He aha te kai a te rangatira? He kōrero, he kōrero, he kōrero. The government has reaffirmed its commitment to supporting the aspirations of Ngāti Maniapoto, Minister for Māori Development Tama Potaka says. “My thanks to Te Nehenehenui Trust – Ngāti Maniapoto for bringing their important kōrero to a ministerial ...
Transport Minister Simeon Brown has thanked outgoing Chair of the Civil Aviation Authority, Janice Fredric, for her service to the board.“I have received Ms Fredric’s resignation from the role of Chair of the Civil Aviation Authority,” Mr Brown says.“On behalf of the Government, I want to thank Ms Fredric for ...
The Government is proposing legislation to overturn a Court of Appeal decision and amend the Marine and Coastal Area Act in order to restore Parliament’s test for Customary Marine Title, Treaty Negotiations Minister Paul Goldsmith says. “Section 58 required an applicant group to prove they have exclusively used and occupied ...
Regulation Minister David Seymour says that opposition parties have united in bad faith, opposing what they claim are ‘dangerous changes’ to the Early Childhood Education sector, despite no changes even being proposed yet. “Issues with affordability and availability of early childhood education, and the complexity of its regulation, has led ...
After receiving more than 740 submissions in the first 20 days, Regulation Minister David Seymour is asking the Ministry for Regulation to extend engagement on the early childhood education regulation review by an extra two weeks. “The level of interest has been very high, and from the conversations I’ve been ...
The Coalition Government is investing $802.9 million into the Wairarapa and Manawatū rail lines as part of a funding agreement with the NZ Transport Agency (NZTA), KiwiRail, and the Greater Wellington and Horizons Regional Councils to deliver more reliable services for commuters in the lower North Island, Transport Minister Simeon ...
Local Government Minister Simeon Brown has announced his intention to appoint a Crown Manager to both Hawke’s Bay Regional and Wairoa District Councils to speed up the delivery of flood protection work in Wairoa."Recent severe weather events in Wairoa this year, combined with damage from Cyclone Gabrielle in 2023 have ...
Mr Speaker, this is a day that many New Zealanders who were abused in State care never thought would come. It’s the day that this Parliament accepts, with deep sorrow and regret, the Report of the Royal Commission of Inquiry into Abuse in Care. At the heart of this report are the ...
For the first time, the Government is formally acknowledging some children and young people at Lake Alice Psychiatric Hospital experienced torture. The final report of the Royal Commission of Inquiry into Abuse in State and Faith-based Care “Whanaketia – through pain and trauma, from darkness to light,” was tabled in Parliament ...
The Government has acknowledged the nearly 2,400 courageous survivors who shared their experiences during the Royal Commission of Inquiry into Historical Abuse in State and Faith-Based Care. The final report from the largest and most complex public inquiry ever held in New Zealand, the Royal Commission Inquiry “Whanaketia – through ...
With a week to go before hard-working New Zealanders see personal income tax relief for the first time in fourteen years, 513,000 people have used the Budget tax calculator to see how much they will benefit, says Finance Minister Nicola Willis. “Tax relief is long overdue. From next Wednesday, personal income ...
Workplace Relations and Safety Minister Brooke van Velden says a bill that has passed its first reading will improve parental leave settings and give non-biological parents more flexibility as primary carer for their child. The Regulatory Systems Amendment Bill (No3), passed its first reading this morning. “It includes a change ...
Two Bills designed to improve regulation and make it easier to do business have passed their first reading in Parliament, says Economic Development Minister Melissa Lee. The Regulatory Systems (Economic Development) Amendment Bill and Regulatory Systems (Immigration and Workforce) Amendment Bill make key changes to legislation administered by the Ministry ...
New legislation paves the way for greater competition in sectors such as banking and electricity, Commerce and Consumer Affairs Minister Andrew Bayly says. “Competitive markets boost productivity, create employment opportunities and lift living standards. To support competition, we need good quality regulation but, unfortunately, a recent OECD report ranked New ...
Minister of Internal Affairs Brooke van Velden says lotteries for charitable purposes, such as those run by the Heart Foundation, Coastguard NZ, and local hospices, will soon be allowed to operate online permanently. “Under current laws, these fundraising lotteries are only allowed to operate online until October 2024, after which ...
The Coalition Government is accelerating work on the new four-lane expressway between Auckland and Whangārei as part of its Roads of National Significance programme, with an accelerated delivery model to deliver this project faster and more efficiently, Transport Minister Simeon Brown says. “For too long, the lack of resilient transport connections ...
Sir Don McKinnon will travel to Viet Nam this week as a Special Envoy of the Government, Foreign Minister Winston Peters has announced. “It is important that the Government give due recognition to the significant contributions that General Secretary Nguyen Phu Trong made to New Zealand-Viet Nam relations,” Mr ...
Minister of Internal Affairs Brooke van Velden says newly appointed Commissioner, Grant Illingworth KC, will help deliver the report for the first phase of the Royal Commission of Inquiry into COVID-19 Lessons, due on 28 November 2024. “I am pleased to announce that Mr Illingworth will commence his appointment as ...
Foreign Minister Winston Peters travels to Laos this week to participate in a series of Association of Southeast Asian Nations (ASEAN)-led Ministerial meetings in Vientiane. “ASEAN plays an important role in supporting a peaceful, stable and prosperous Indo-Pacific,” Mr Peters says. “This will be our third visit to ...
Construction of a new mental health facility at Te Nikau Grey Hospital in Greymouth is today one step closer, Mental Health Minister Matt Doocey says. “This $27 million facility shows this Government is delivering on its promise to boost mental health care and improve front line services,” Mr Doocey says. ...
New Zealand is committing nearly $50 million to a package supporting sustainable Pacific fisheries development over the next four years, Foreign Minister Winston Peters and Oceans and Fisheries Minister Shane Jones announced today. “This support consisting of a range of initiatives demonstrates New Zealand’s commitment to assisting our Pacific partners ...
Associate Education Minister David Seymour says proposed changes to the Education and Training Amendment Bill will ensure charter schools have more flexibility to negotiate employment agreements and are equipped with the right teaching resources. “Cabinet has agreed to progress an amendment which means unions will not be able to initiate ...
In response to serious concerns around oversight, overspend and a significant deterioration in financial outlook, the Board of Health New Zealand will be replaced with a Commissioner, Health Minister Dr Shane Reti announced today. “The previous government’s botched health reforms have created significant financial challenges at Health NZ that, without ...
Minister for Space and Science, Innovation and Technology Judith Collins will travel to Adelaide tomorrow for space and science engagements, including speaking at the Australian Space Forum. While there she will also have meetings and visits with a focus on space, biotechnology and innovation. “New Zealand has a thriving space ...
Climate Change Minister Simon Watts will travel to China on Saturday to attend the Ministerial on Climate Action meeting held in Wuhan. “Attending the Ministerial on Climate Action is an opportunity to advocate for New Zealand climate priorities and engage with our key partners on climate action,” Mr Watts says. ...
Oceans and Fisheries Minister Shane Jones is travelling to the Solomon Islands tomorrow for meetings with his counterparts from around the Pacific supporting collective management of the region’s fisheries. The 23rd Pacific Islands Forum Fisheries Committee and the 5th Regional Fisheries Ministers’ Meeting in Honiara from 23 to 26 July ...
The Government today launched the Military Style Academy Pilot at Te Au rere a te Tonga Youth Justice residence in Palmerston North, an important part of the Government’s plan to crackdown on youth crime and getting youth offenders back on track, Minister for Children, Karen Chhour said today. “On the ...
The Government has welcomed news the NZ Transport Agency (NZTA) has begun work to replace nine priority bridges across the country to ensure our state highway network remains resilient, reliable, and efficient for road users, Transport Minister Simeon Brown says.“Increasing productivity and economic growth is a key priority for the ...
Acting Prime Minister David Seymour has been in contact throughout the evening with senior officials who have coordinated a whole of government response to the global IT outage and can provide an update. The Department of the Prime Minister and Cabinet has designated the National Emergency Management Agency as the ...
New Zealand and Japan will continue to step up their shared engagement with the Pacific, Foreign Minister Winston Peters says. “New Zealand and Japan have a strong, shared interest in a free, open and stable Pacific Islands region,” Mr Peters says. “We are pleased to be finding more ways ...
New developments in the heart of North Island forestry country will reinvigorate their communities and boost economic development, Regional Development Minister Shane Jones says. Mr Jones visited Kaingaroa and Kawerau in Bay of Plenty today to open a landmark community centre in the former and a new connecting road in ...
President Adeang, fellow Ministers, honourable Diet Member Horii, Ambassadors, distinguished guests. Minasama, konnichiwa, and good afternoon, everyone. Distinguished guests, it’s a pleasure to be here with you today to talk about New Zealand’s foreign policy reset, the reasons for it, the values that underpin it, and how it ...
Last summer when Matairangi burned, Ginny and Tom stood at the window of their lounge, watching kākā shoot skyward from the burning trees. From the distance, they looked to Ginny like pages torn from books and thrown into a bonfire. It was Tom, voice tight, who told her it was ...
Opinion: The Canadian short story writer Alice Munro – winner of the Nobel Prize in Literature in 2013 – died in May at the age of 92. Her work was about “the damage people inflict on one another in the name of love”, Deborah Treisman wrote in the New Yorker. ...
This month marks two years since the most powerful telescope ever built sent its first pictures back to earth. From its lofty vantage point, beyond the moon in orbit around the sun, the James Webb Space Telescope was tuned to observe the first stars and galaxies being born soon after ...
Comment: After Climate Change Minister Simon Watts’ preview several weeks ago, I had some optimism about the Government’s emissions reduction plan. Now I’ve read the discussion document, that hope has been dashed. How can the Government propose a plan that wants to take New Zealand taxpayers’ hard-earned money, and spend ...
Christopher Luxon: hurdles The little man from National jumps hurdles in his sleep. He’s quite good at it in his dreams and even though the reality doesn’t quite match up you have to give him credit for getting up every morning and crashing into the very first hurdle of the ...
Comment: It was a good two hours into the conversation when Tyrone Marks raised the most basic of questions when I first spoke to him in 2017. “They didn’t explain the things they did to me. They never told me why. And they still haven’t. There’s no explanation for it. ...
Madeleine Chapman rounds out Death Week on The Spinoff with a final recommendation. You can read all of our Death Week coverage here. Nothing forces you to reflect on your life and relationships quite like proximity to death. For those whose nearest and dearest have died, there are reasonably obvious ...
Whitney Greene takes us through her life in television, including the TV character she’d like to plan a funeral for and her cow lung catastrophe on The Traitors NZ. “If the phone rings, I have to answer it,” Whitney Greene from The Traitors NZ warns as we begin our My ...
Maddie Ballard reviews the debut essay collection of Pōneke writer Flora Feltham.In ‘The Raw Material’, the longest essay in Flora Feltham’s dazzling debut collection, the author heads out for a run after hours of weaving and sees the world turn to textile. “Pounding along the Parade, I saw the ...
Andy Christiansen, one half of the experimental rock-pop duo TRiPS, shares the tunes inspiring the band’s perfect weekend and new release. “Good speakers, good food, good music, no distractions”: that’s all you need to enjoy the psychedelic stylings of TRiPS, a new band formed by Fly My Pretties’ Barnaby Weir ...
Celebrating our quadrennial opportunity to become experts in a bunch of sports we never normally watch.The games of the XXXIII Olympiad are upon us. Paris will host this year’s showcase of sporting and athletic prowess, which means some late-night and early-morning viewing for us in Aotearoa.But what sports ...
The photograph is striking and beautiful, but also disturbing – a reminder that my love for John was often entangled in shame.The Sunday Essay is made possible thanks to the support of Creative New Zealand.In the spring of 1980, in Dunedin, shortly before his death, someone took a photograph ...
Get to know Babushka, our latest Dog of the Month. This feature was offered as a reward during our What’s Eating Aotearoa PledgeMe campaign. Thank you to Babu’s humans, Jo and Isabel, for their support. Dog name: Babushka (Babu for short) Age: 2Breed: Border Collie X poodleIf rescued, ...
Pacific Media Watch A Lebanese photojournalist who was severely wounded during an Israeli air strike in south Lebanon carried the Olympic torch in Paris this week in honour of her peers who have been wounded and killed in the field — especially in Gaza and Lebanon. Christina Assi of Agence ...
The first report in a five-part web series focused on the 15th Triennial Conference of Pacific Women taking place in the Marshall Islands this week.SPECIAL REPORT:By Netani Rika in Majuro Women continue to fight for justice 70 years after the first nuclear tests by the United States caused ...
Christopher Luxon has joined with Australia and Canada's leaders in voicing support for US President Joe Biden's ceasefire deal between Israel and Hamas. ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra The 2022 election brought the “teal wave” into parliament. The next election will test whether teals, who occupy what were Liberal seats, and other independents can maintain their momentum. Joining us on the Podcast ...
Source: The Conversation (Au and NZ) – By Ian Musgrave, Senior lecturer in Pharmacology, University of Adelaide Pixavri/Shutterstock A major Federal Court class action has been dismissed this week after Justice Michael Lee ruled there was not enough evidence to prove the weedkiller Roundup causes cancer. Plaintiff Kelvin ...
In The Week in Politics: politicians have to decide what to do about child abuse, Health NZ is booked in for major surgery and Darleen Tana returns. ...
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@McFlock
Put this here because it was OT in thread.
It’s not just creation money though – you have to include it’s destruction. The cycle should go:
Government >> economy >> government
The money’s return to government is actually it’s destruction. Under those conditions then inflation can be minimal.
As for the exchange value – that needs to be set by a formula (essentially imports/exports) rather than the wishful thinking of the speculators.
How is money going back to the government destruction?
Because when it’s returned to the government it’s matched against previous spending.
Spend into the economy (+1)
Return to government (-1)
total = 0
The government should actually run at a slight deficit to match population growth and the easy way to do that is a UBI.
spend into the economy(+1)
return to government (-1)
tax rate 100%
spend available for provision 0
output 0
savings 0
confidence 0
exchange rate …..won’t matter as it won’t be wanted (or needed)
Completely wrong.
Spend available for provision of government services is the amount needed to provide those services – no more, no less.
This spending then gets spent into the private sector causing multiplier effect (usually around 3 times).
Overall tax @ 33% to have return to government balance.
It would be government spending, including the UBI, that provides the entire money supply for the economy to work. This:
1. Removes poverty
2. Eliminates the business cycle
3. and removes the need for infinite exponential growth on a finite world.
lol….so zero imports and zero savings …thats a realistic model…not
Why would there be zero imports/exports?
And we don’t need savings. In fact, savings seem to be a large part of the problem with our present financial system.
That said, there’s nothing stopping people from putting money in the bank. They just won’t get any interest on it.
why?…because you claim a tax rate of 33% and a multiplier of 3 …that requires a zero savings and import rate
and we don’t need savings? would love to hear your explanation of how anyone is going to purchase anything that costs more than say a weeks “wages”( while eating and being housed)…and that also suggests all ownership will have be by the state for there will be no ability for private investment…and placing it in a bank (even at zero interest) still removes it from circulation and negatively impacts ME
but the best of all is how you propose to administer the inevitable demand for more. and the inflationary spiral that creates.?..even in a totally closed economy which while possible is extremely unlikely
You said that when you claimed it was 100% tax rate. Now that you’re informed that it’s actually 33% you’re saying the same thing.
Your maths is wrong.
$1 is spent into the economy
This produces $1 of economic value
$0.33 is taxed back out from that $1
Leaving $0.67 in the economy which goes round again to be taxed again
Meanwhile, the government has spent more into the economy
You need to think of the economy as a constant flow.
Money in >> stuff happens >> Money out >> Money in
It’s not Money in >> Money out and that’s it, nobodies got any money and nothing happened as you seem to think.
No we don’t. Savings aren’t needed to buy cars. It’s supposedly needed to make investments but it’s not needed for that either.
And, of course, people would still be able to put money aside to buy larger stuff.
And how did I propose to do that?
There’s no inflationary spiral as the money is balanced. Unlike now where the money into the system isn’t balanced resulting in high house price inflation.
“You said that when you claimed it was 100% tax rate. Now that you’re informed that it’s actually 33% you’re saying the same thing.
Your maths is wrong.”
lol. nothing wrong with my basic arithmetic but does appear to be something wrong with your understanding of the multiplier effect which you cited..
.ME ratio= 1/ propensity to save, propensity to tax and propensity to import
so your example 3 = 1/ 0 + 0 .33 + 0 …. change any factor (imports or savings i.e.) and your multiplier will change.
will return to your other misconceptions when I have some time
Possible. The multiplier effect won’t be the same in a Sovereign Money financial system as in the current system.
I’m thinking that it would be more of a measure of how many transactions money will go through before it’s fully returned/destroyed. I was making an assumption, based upon the present multiplier usually being ~3, that it would be about the same.
Thinking about it some more that assumption is most likely low which means that the overall tax rate would be lower. Would probably need a FTT.
“No we don’t. Savings aren’t needed to buy cars. It’s supposedly needed to make investments but it’s not needed for that either.”
Didn’t mention cars, but if you maintain savings are not needed (though you then contradict yourself by stating monies can be put aside for larger stuff….otherwise known as savings) one can only assume that either the government will lend or gift monies for large purchases or that money itself will cease to be.
“And how did I propose to do that?”
you haven’t ….and that is the point.You have ignored the increasing demand by a society that only has to bring political pressure to obtain more or the same for less, how does your model propose to deal with that? This speaks to the inflationary spiral that would be created.
If what you have outlined here is a genuine model then you should at least be up front and admit the only way it would have a chance of successfully operate (at least briefly) would mean the end of private ownership, a completely closed economy that is likely to become increasingly unsophistocated and a totalitarian state that is mandated by the majority with no protection for dissenters….think we’ve seen where that leads..
So basically, you’re borrowing against the government’s income next year, as opposed to the government’s income this year. And if the money back doesn’t meet the money you’d spent, it’s inflationary.
How is that different from the standard bonds the reserve bank lends to banks? I can see why “lending” it to central government for infrastructure development rather than just to inflate the banking sector, but what you describe still requires conventional, basic budgeting, not a currently untapped source of revenue.
Nope.
Government creates the money
Spends it into the economy
Taxes money back out of the economy (destroys money)
No borrowing at all.
The economy is a continuous cycle.
Nope. Growing economy requires a growing volume of money. Of course, sovereign money can also be used to turn the economy into a Stable State Economy.
These would no longer exist. Banks would not be able to borrow from the RBNZ.
Also, the government borrowing from the private sector would also not exist.
I never called it income because it’s not income.
It’s the base driver of the economy.
But you said that to maintain the overall level at zero change (to avoid inflation), the government had to “destroy” a dollar for every dollar it created.
The money only does any good if the government spends it, gives it to other people. Pays a UBI, pays road workers, whatever.
To get it back to destroy it, the government needs to levy a tax or gain profit from a transaction.
You’re plugging extra money into the economy this year, but you need to avoid creating inflation by taking back a matching amount of money in taxes.
Let’s say you have annual tax revenue of 100bil in a country with a gdp of 300bil. You want to buy everyone a UBIferrari, at an additional cost of 40bil, so you print the required cash. Next year you need to raise $140bil in taxes and destroy 40bil of it, and your gdp is 340bil, so you’ve got ~12% increase in gdp and cash supply while the invented cash is still in the economy.
So you’re still left with government expenditure cuts or tax increases to maintain the monetary balance.
But the government doesn’t buy everyone a Ferrari now does it? Really, why would you come up with such a stupid example?
What it does is spend money to provide government services (Police, justice, etc). and the UBI. These people now have money which they want to spend. They spend it into the private sector.
As the money moves through the economy it’s taxed in various ways (returned to government). These taxes result in the money being destroyed.
Which bit about the government spending being balanced by taxes didn’t you understand?
And, no, you wouldn’t have to cut government services – ever. In fact, doing so would probably cause a recession because the money that the government is spending is the full and total supply of money for the economy.
I really can’t make it any simpler.
Government creates money
Government spends money into the economy via government services
Government taxes money back out of the economy destroying the money
It’s not necessarily to finance government spending but it is necessary to keep money circulating, other wise it goes stagnant and festers in speculative property prices.
If Graham Hart spent the amount of money McFlock suggests in what’s called the permanent money hypotheses Graham would explode in 20 secounds because of the heat generated from spending, so Graham simply can’t spend that amount of money, the role of taxation is to put it back into the hands of those who will spend.
Later curve: http://www.investopedia.com/terms/l/laffercurve.asp
Permanent money hypotheses: http://www.investopedia.com/terms/p/permanent-income-hypothesis.asp
Taxes?
Or stimulus from deficit spending, or even cutting corporate taxes can cause inflation, (at the risk of receiving a ban for mentioning Trumps name) Trumpism, there are so many ways to boost demand, my point is if MrFlock would try google first he wouldn’t come across as such an asshole
I chose an absurd example (actually “UBIferrari”) because the what is irrelevant to the discussion: it could be a UBI, earthquake repairs, or a moonbase.
The fact is that you’re still tying government expenditure to government income. In a particularly inefficient way. Because, like most economic theories, your model is to simplistic.
You want to spend money now in order to tax it back later. But rather than doing it with bonds (and addidng a “debt servicing” line item to the annual budget that’s a small proportion of what you actually borrowed), by flooding the economy in new money you necessitate getting it back as soon as possible. The end sum might be zero, but in my example you’ve still increased the money supply by 40bil until you’ve taxed it back. And artificial boom/bust cycle.
And how would you tax it back – monthly or quarterly variations in PAYE? How would that effect folks’ wallets? Or annually bounce the tax rate 15% up or down depending on what you want to build this year? you reckon that’s electorally sustainable? Again, for simply the same result: government expenditure that’s constrained by government income.
Read the theory again
We’re not starting at zero. We already have the government taxing and spending.
The government shouldn’t borrow money – ever. It has no need to as it can create money and not have interest charged on it. Just so long as it then destroys that money through taxation.
Why do people insist that the government has to pay interest on money?
And that is why your thinking fails. You think that the economy is static rather than a continuous flow.
Can you point me to where I said it would be otherwise?
What I said is that government spending through government services and the UBI should be the total money available to the economy. That this would stabilise the economy eliminating the ‘business cycle’ and poverty.
I don’t believe the economy is either static or a continuous flow.
I think there are lag times and elastic relationships throughout the economy, and my concern with your plan is that it causes a surge throughout the system, followed by a corresponding low pressure zone. And that causes more stress to individuals in the system, breaking some of them.
Whereas conventional tax/borrow and spend government policies don’t have that lag period where there’s a sudden boost in money supply on top of everything else.
But it doesn’t and that thinking is that of a static model.
The sudden boost in money supply that we’re seeing now is from the private banks creating huge amounts of money in lending for houses and offshore buyers of our housing.
Well, perhaps there is some niche economic definition of “static” – but I meant it in the conventional meaning of lacking in movement, action or change. Which is impossible in a system that has pressure waves, which by definition are change. But either way, simply saying that the model is “widget” doesn’t mean it’s wrong.
How does one create cash and avoid inflation in the period between when government pays the people and when it taxes that amount back off them?
The current boost in money supply is intentional policy by the reserve bank which is using a blunt tool to face a complex problem: a largely stagnant economy with one single sector that’s massively overinflated in price due to long term supply shortfalls.
That is a separate issue to whether your concept of printing (then destroying) money adds any advantage over the current conventions of managing government accounts.
Bruh. Economics is uncertain
See, you’re thinking that one thing happens and then the next thing happens at a later time when both will be happening simultaneously. The former is static model thinking.
Actually, it’s been the intentional policy of the government for the last ~30 years who legislated what the RBNZ was going to do, gave it the tools to do that and removed capital movement restrictions.
Actually, it gives advantage to the entire economy and not just the governments books:
1. By removing the private banks ability to create money it stabilises the economy from that direction. No more banks creating huge amounts and then panicking and stopping creating any thus throwing the country into recession/depression
2. They’ll be no need to borrow offshore to utilise our own resources as they’ll be plenty of money available
3. By ensuring that there is a constant influx of money into the system via the UBI ensures that there will always be a demand for businesses to supply
4. The UBI will ensure that everyone who wants to will be able to get a good education
5. The UBI will allow people to be entrepreneurial by ensuring that they don’t drop into poverty if their idea fails
6. The removal of interest bearing debt from government removes the need for continued growth
It seems to me that you’re trying to have it both ways: you said “As the money moves through the economy it’s taxed in various ways (returned to government). “. That means there’s a lag between when the money is distributed and when the same amount of money is finally returned via taxes. If there’s a lag then there’s a period of substantially increased money supply. If there’s no lag, then you’re not “creating” money, you’re simply transferring tax revenue into expenditure in exactly the same way it’s currently done.
Yes and no. It bypasses the fractional reserve system (which is merely a multiplier of the OCR tool, not an integral part), but that doesn’t mean that the banks will contribute any less to boom and bust speculative cycles.
Borrowing, either directly or by simply printing cash and borrowing that off future taxpayers, is a sign of insufficient taxation right now.
That is a benefit of a UBI in particular, but yes does apply to other government expenditure if it’s done wisely. IMO most importantly the government expenditure needs to go into the regions so it can flow back into the urban centres then the corporates, rather than just swilling around a few key CBDs.
Nah. That’s what the education system is for.
Fair enough, but this isn’t about the benefits of a UBI, it’s about how some UBI proponents intend to pay for it.
but printing money simply substitutes interest payments for boosts to inflation. Growth is therefore still necessary.
Nope because the taxes would go up at the same time that spending goes up. If spending doesn’t go up then taxes don’t go up.
And we’re not starting at a zero point. We already have a monetary flow. There’d be a transition period when inflation may be a little higher than normal but I doubt if it would last long.
Yeah, actually, it does:
1. The banks will no longer be able to leverage minimal funds into massive loans. They’re strictly limited to what they have on deposit for on-lending and the people who so deposited it won’t be able to spend it either thus removing that piece of leveraging as well
2. If a few people lose their money from speculation so what? The constant flow of money from the government will ensure that loss with have minimal feed on effects. Mostly, the banks won’t suddenly stop creating money and throwing us all into recession as happened in the GFC
Creating money which is then spent directly into the economy producing economic activity now is not borrowing.
People need to be able to afford to go and get that education and that’s what the UBI will do.
But creating money doesn’t automatically translate into inflation – as the vast printing of money around the world after the GFC proved.
So how does that differ with what blinglish currently does every year?
Ok, so there will be inflation, now we’re just quibbling over how large and sustained it will be.
It wasn’t the creation of money that created the GFC, it was the outright frauds that were committed with that money, that then made the banks terrified of lending money to each other in order to settle daily debts and tallies. They created a pyramid of bad loan packages, then as soon as the music stopped playing all the bankers dropped those hot potatoes so they wouldn’t get caught with their pants down (abuse of allegorical language intentional 🙂 ).
It is if taxpayers have to make it up, even in the near-immediate future.
Well, yes it does. That’s why they did it: boost GDP with the corresponding effect on inflation. Because they were at extreme risk of deflation and depression.
Maybe if we take a step back because interest rates set the rate at which you can borrow from the reserve bank but they are apart of the cost when settling transactions between different banks, and banks hang on to reserve in case the housing sector has a massive run on for cash, and they never pass on full rate cuts. But if you take interest away banks themselves still have guides to take on crises, and that’s just in case there’s a fiscal demand for cash.
The current system actually borrows the money at interest. The government borrows from private banks which create the money at the time. The addition of interest means that it can never be fully paid back which means we have an expanding monetary base.
Never mind the fact that the private banks also create money when they make a loan to private individuals as well.
Sovereign Money gets rid of that. It has the continuous creation and destruction of money needed to keep the economy moving but it doesn’t have the interest component that forces growth. A stable state economy would work.
The entire banking sector is a Ponzi Scheme – see above – which is why it fell over.
No it doesn’t.
Yes, that is one of the reasons why they printed so much money but the inflation didn’t actually eventuate. The other reason, and probably the main one, that they printed so much was to prop up the banks. If the Ponzi Scheme that the private banks run collapsed the way it should have then, yes, we would have been in a depression.
Of course, the best thing that they could have done to prevent a depression is implement a UBI and let the banks collapse. Instead they gave it all to the banks which then kept it instead of loaning it out for productive activity.
A UBI would have prevented a recession, kept local businesses going and allowed the market to correct for the banks fraudulent activities.
Bullshit. Of course it can be paid off, with interest.
And the “sovereign debt” equivalent of interest is the systemic costs of the inflation it creates, even temporarily.
or it did eventuate and without it the world would have gone into a deflationary spiral.
agreed.
Nah. The best thing they could have done was buy all the bad loans at crap market rates and renegotiate sustainable repayment terms for the borrowers, thereby starting one of the biggest state housing programmes in decades if not history.
Profit gouging (especially by multinationals, e.g. bank interest) is also destruction of money, if there’s a weak tax regime (or tax haven) and no reciprocal investment back into NZ
Similarly, GST & income tax is a highly regressive drag on the economy and devalues the work of the many, whereas the top few % rich in assets pay relatively no tax. In fact, because of the property bubble there are thousands of lucky/privileged/entitled Aucklanders whose net tax is probably less than zero.
On Planet Key, the wealthy pay no tax, and the poor get taxed on all income over $1
No it’s not. It may be effectively removed from circulation in the economy but it hasn’t been destroyed. It still exists and can be spent.
As I said in the rest of that sentence. Unfortunately, Aussie banks are destroying value by extracting billions from the NZ economy per year without commensurate spend back in to NZ
Yep, the dead-weight loss of profit. I’m quite aware of it but it not destroying the money. It can still be spent and it’s usually spent on assets thus driving asset price bubbles.
Monbiot has just written about Neoliberalism, the bastards behind the idea and how we are getting screwed and will always be screwed..
https://www.theguardian.com/commentisfree/2016/nov/14/neoliberalsim-donald-trump-george-monbiot
On Planet Key a severely unstable man is stopped by police after stalking a couple armed with a knife. They let him go to kill the very next day.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11748624
On the same Planet Key a journalist has his home ransacked by police after highlighting government corruption.
More public service incompetence, the sooner we privatize everything, the better.
Blame the workers. First port of call when something goes wrong.
Same with privatisation, offset the blame, a whole bunch of people with their hands in the air singing ‘It wasn’t me’ til you get to the poor shmo on minimum wage at the bottom of the ladder ‘It’s all his fault!’.
He says after fight clubs and death have been found in privatised prisons – due to the lack of standards in the privatised prisons.
Predictable response, sad, but predictable…
More of this national government and there worshipers failing to take any responsibility for anything the have wreaked over the last 8 years of office.
Nothing to do with chronic lack of resourcing in Police and cutting mental health services so that Bill English can put some nice numbers in a fucking spreadsheet…
If you are brave enough, this is Watkins’ fluff piece on Key. No analysis of the situation, just a gentle combing of John Key’s hair.
http://www.stuff.co.nz/national/politics/86503566/a-warning-to-expect-the-worst
No thanks, can’t stand that prick. The MSM have been drooling over him for a decade. WTF is wrong with them.
Then, if you really want to be sick in your mouth, watch this pan and scan drivel to dramatic orchestral music from the Horrid.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11748647
This is awful broadcasting. And this is what the Horrid want to do with the NZOA funding changes. They want to contest for public funding to produce this kind of crap.
Brave enough to tell the truth. Good on you Jeremy Corbyn.
http://www.independent.co.uk/news/uk/politics/donald-trump-lastest-news-jeremy-corbyn-grow-up-us-immigration-mexico-andrew-marr-a7414576.html
There’s no dedicated post today so put it here.
Noam Chomsky on Trump’s White House
http://www.truth-out.org/opinion/item/38360-trump-in-the-white-house-an-interview-with-noam-chomsky
Ha ha. I was lucky enough just now to watch the super big Moon-rise at about 68degrees from North in Blenheim. A lovely golden colour and just huge. Don’t think I will be around to see the next one.
This was my take on the super moon. It was last month though at moon-set facing east from the base of Mt Wellington where I live.
http://i.imgur.com/IlwdpNM.jpg
I’m calling it “night flight”.
cool photo. Too much cloud here.
It’s rubbish here tonight but I’ll get up early to have a look west again tomorrow am.
Nice one, weather in Auckland has been too crap for the last couple of days, I’ve seen nothing but grey
I do hope you have at least another 18 years in you. The full moon will be even closer on 26 November 2034. And there’s a total solar eclipse directly over the South Island in 2028 to tide you over.
Oh ianmac saw the same moon at the same time from the same place! Next one in November 2034.
We’ll both be around to see that one, yeah?
The picture header is in poor taste
Why?
This should be fun…..
The Harry Leslie Smith –
https://twitter.com/Harryslaststand/status/797843761757876224