As most of the headlines this morning focus on the crumbling world economy, it was interesting to hear Bill English on RNZ (audio link).
The world economy is slowing down a bit …
Quite a talent for understatement.
We haven’t been able to dig the big economies out of their low growth … there’s no more clever solutions
There haven’t been any “clever solutions” at all yet because: (1) all the “stimulus” has been directed to the wrong place, Wall St bankers not Main St productive economy; and (2) governments have been addressing the wrong problem, trying to reduce debt through austerity and thus further damaging the economy.
There are now obviously now no easy answers coming form lower interest rates . There’s no more talk about the magic of stimulus coming from some big government spending because people realise the dangers of the debt that goes with it.
There never were any easy answers. And when English dismisses the “magic of stimulus” recall that almost all the “stimulus” so far has been in the form of bailouts to failed banks and financial institutions (where it turned in to more recorded “bonuses” for executives of course).
So they [governments] do have to start deciding to spend a bit less, tax a bit more, and get their debt down …
Goodness me – did I just hear (around 3:10 in the audio) Bill English call for higher taxes as a sensible response to debt? Don’t panic “wealth creators”, he wasn’t talking about NZ of course! Sensible solutions are only for other countries.