Sugar rush

Written By: - Date published: 6:37 am, February 13th, 2009 - 24 comments
Categories: economy, national/act government - Tags:

John Key and Tracey Watkins have both (completely by coincidence) said we must avoid responding to the recession with a ‘sugar rush’ of spending. They’re just making excuses for National’s hopelessly inadequate policies for dealing with the recession but they are right about the need to avoid a sugar rush we don’t want to just spend a bunch of money to get a buzz now only to crash when it wears off. Instead, we need to spend on projects that will have a long-term benefit to the economy once the stimulation from the spending on them has worn off. Unfortunately, a sugar rush is exactly what we’re getting from National/ACT.

Look at what National has announced moving forward a few road and school projects, a temporary reduction in provisional tax. Ultimately, (as Vernon Small acknowledged in the Dom yesterday) there’s nearly no new money, it’s just money that was budgeted anyway being spent a little earlier. It’s just like having your dessert for afternoon tea you get the sugar a little sooner but the body you have the next day is the same either way.

We need more spending and we need to be using it to rebuild our economy. We need an ambitious, long term plan for growth and sustainability. Right now, all we’re getting is some candy.

24 comments on “Sugar rush”

  1. I kind of agree with you on this Steve, but must ask where will this money come from?
    Not much point re litigating the past, but a lot of our money has been spent in the last decade. It is a real pity the cupboard was left bare when we most need it.

  2. BLiP 2

    Goober John Key and his Party’s announcements are a cynical attempt to maintain headlines, to be appear to be setting the agenda, and actually doing something. The drip-feeding of the so called measures to manage the recesssion amounts to little more than existing programmes being tinkered with and then re-announced to a gaggle of waiting media. I believe this particular PR dark art is generally referred to as “feeding the chooks”.

  3. Bevanj 3

    From what I’ve heard and read of late there’s never been an example of a government to successfully pull off a big spend up to get a country out of recession.

    I’m keen to hear of examples if anyone has any.

    Less spending particularly rash spending certainly won’t mortgage our (and kids) future any more than it is.

  4. vto 4

    yeah, lets just carry on borrowing. its worked well so far.

  5. vidiot 5

    Yeah let’s rush out and spend all the money that we had saved for a rainy day, oh FFS there is none !

    Perhaps culling the Cullen fund and using that money to do a mass kick start of the economy is what we need, only down side is that fund is worth about 60% of what we have put in to it, and getting worse every day.

  6. vto 6

    Sheesh, dont want to sound like some mindless personal attack SP but this post lacks any depth or reasoning, and is a repeat of several recent ones.

    You say “We need more spending …”. Perhaps you could explain why and how it would fix the depression.

    You also say “We need more spending and we need to be using it to rebuild our economy. We need an ambitious, long term plan for growth and sustainability. Right now, all we’re getting is some candy”. ha ha – you’ve stolen that line from the nats over the last 9 years.

  7. SeaJay 7

    Re: Goober John Key – Elections over, could we leave the name calling to the dogs over at kiwiblog perhaps? Whoops. Now the economy stupids, or the stupids economy ( that lovely Bill English is looking a bit haggard ) HuffingtonPost have a writer suggesting new recipients of unemployment benefits be able to use that income to subsidise a wage from a new job. That’s something.

  8. @ work 8

    “barnsleybill

    I kind of agree with you on this Steve, but must ask where will this money come from?
    Not much point re litigating the past, but a lot of our money has been spent in the last decade. It is a real pity the cupboard was left bare when we most need”

    Bill, I’ve got next to no money in my current account, but thats ok, I’ve spent the last month paying off my secondary account, so that ones back to 0 also, should anything need more money than I’ve budgetted for (say a recession) I can borrow back the money I’ve spent the last month paying off.

    Cullen could not have paid back as much of the debt as he did, while keeping up surplus’, simple as that, and with tax cuts he couldn’t have done either.

  9. vto. I’ve talked about the detail of why we need to spend more and on what in previous posts.

  10. ak 10

    @work: … and with tax cuts he couldn’t have done either.

    Yes, @, rather amusing to see the “winners” still clinging to the ridiculous notion that Culls was somehow simultaneously a cold-hearted grinch hoarding our precious hard-earned tax dollars – and spending like a drunken sailor at the same time (especially when even their wee John Doh! admits that Labour left us in relatively good shape).

    Poor boys. Barnacle and his flailing ilk are slowly dawning to the fact that the mythical invisible hand that they have been whacking off to and trying to force down out throats for years has finally shown its true colours: it now has its icy grip on all our cojones and sipping a few Labour Lites will do little to ease the pain.

    Luckily, the yanks and ockers stuck to a full-strength brew: going by his performance to date, the MilKey Bar Kid will eventually crave their affection too – and tag along with the inevitable return to economic sanity.

    The writing’s on the wall Bill, and your Devil Woman’s left the building: get your head out of the bowl.

  11. senzafine 11

    Why would we want to go down the path of Massive government spendups in the form of bailouts and infrastructure spends When 1929-1939 has proven that such strategies do not work to beat recession, in fact they do the reverse – strengthen the recession to a depression.

    Hoover believed he had an ambitious plan for long term growth. So did Roosevelt. All they actually achieved was putting their countries and citizens through immense and unnecessary pain.

  12. senzafine. That’s certianly not a mainstream view of the Great Depression. Not only did the New Deal create employment, it created an infrastructure that the US is still benefiting from now – the Hoover Dam being the most visible example.

  13. vidiot 13

    And do you seriously think that a project the size of the Hoover Dam in NZ will do us any good ? The last time it was tried (Clyde) was a complete over-spend, and needless to say I doubt the greens would like you damming up any valleys these days either.

    If you want to think big (oh shit that’s Robs thoughts), think nuclear, think Kaipara Harbour and then also think of moving parliament from Wellington to somewhere much safer (like South of Whangarei). Imagine how many jobs that would create.

  14. BB,

    Actually you’ve got that totally wrong. A lot of our money was used to pay back debt to the international banking cartel and should have been spend on our infra structure and our country’s and it’s inhabitants well being.

    The labour government made an issue out of prioritising the repayment of international debts in order to liberate this country from the scourge of compound interest payments and made an effort to pay back our international debt asap.

    If you want to know how money was created by the privately owned international banking cartel with it’s two centres in the City of London and the Federal Reserve of New York you should watch “Money as Debt“.

    And if you want to learn of the history of our privately owned international banking system you should watch the “Money Masters“.

    Incidentally John Key was a one of only four upon invitation only advisors of the Federal Reserve from November 1999 until 2001. One of the most important moments in the existence of the privately owned Federal Reserve of New York. In November 1999 the Glass Steagall act was repealed. This was the final bit of regulative legislation gone. It was the banksters wet dream come true. The total deregulation of banking. Derivatives and speculation here we come!

    This is what caused the great Depression and it will collapse our entire global economy again.

    And this is what John Key had to say about it at the APEC meeting:

    So now the party is over and the taxpayers of the world are left to underwrite in one form or another the liabilities and obligations of banks and, by extension, their hedge-fund clientele.

    That means that he thinks that we should pay for the disaster he and his banking scum mates have created.

    The banking elite has bee creating money out of thin air and since the 70s we have only had fiat money without any relation to for example gold. We’ve been had and John Key knows all about how we’ve been had.

    What will happen next? We will borrow from the international Money Masters instead of issuing our own currency and we will end up living in this country as it’s being owned by the same scum and if it’s up to John Key and his bankster mates we, our children and our children’s children will slave away to pay the Money Masters back their loans they created out of thin air instead of spending our hard earned money on ourselves and this country.

    All they are doing now is collapsing the economy to the point where everybody is so poor and so scared that we will accept anything and if we don’t? The the police has it’s instructions and the prisons NActional will be building with private money will be waiting and DNA collected from every sucker who think that they are entitled to free speech and demonstration will make sure that everybody will be to scared to actually stand up for themselves.

  15. Felix 15

    The Nats are talking up the amount of their spending, the opposition are claiming responsibility for large amounts of it, and others are questioning whether spending up is effective anyway.

    It’s ironic that suddenly the govt is claiming superiority for chucking more money around that the previous one – the reverse of their position for the past 9 years.

    Not that I’m surprised or bothered, but I am concerned that the focus is all on the quantity and not the quality of the spending.

    Any govt spending can create / save jobs, stimulate circulation etc in the short term. That’s important, but a big spend-up is also an opportunity to invest in long term productivity. The Kopu bridge is a good example of a project which will create work and stimulate the local economy but not provide any significant long term economic benefits.

    This doesn’t mean it’s not worth doing, just that there are probably better ways to spend the money.

    Investing in energy generation is an example of the opposite – the same short term benefits from the construction process but resulting in real national assets which can save us untold dollars as we navigate the energy issues we face along with the rest of the world.

    Let’s keep thinking beyond getting through the next couple of years, eh?

  16. northpaw 16

    Ah… at last.. the cheerful Eve with a latest rendition which would improve by omission her 4-letter S-word (tho on second thoughts slag might make an appropriate substitute if only to bolster the barons of industrialization forerunner)..

    to the blog – ‘sugar rush’ had me think well, where’s the harm.. ah yes, diabetics.. Can we suppose that both JK and TW had food and fat on their minds..?

  17. Magnus 17

    BevanJ,
    I don’t have the time, nor the inclination, to deliver a history lesson, but an example of a Government spending big to relieve severe economic hardship can be found no further away than our own shores.
    From 1935, the First Labour Government spent enormous sums of money on numerous social programs, infrastructure projects, schools, hospitals, healthcare and the like. This after decades of a conservative government being tighter than a fishes arsehole with the public purse which only exacerbated the effects of the Great Depression. Which leads me to another point. In lean times, history has proven that the effect of governments (the overwhelming majority of which were conservative) cutting back spending in economic downturns has been nothing short of catostrophic. Research the government of Joseph ward for an example.
    So far as lifting this country out of economic difficulty goes, history has not been kind to the right. They’ve created economic crises, been elected on the back of them, and even made them worse, but not once have they lifted this country out of one.
    I hope for the sake of everyone that they manage to turn this piss poor record around.

  18. gingercrush 18

    What is so fundamentally great about Obama’s stimulus plan and Britain’s? Sure its a whole lot of money but what it is actually being spent on?

  19. Ah Northpaw,

    Do you understand what I’m trying to tell you? Or are you even interested? Did you watch the video’s in order to educate yourself? Nah, I didn’t think so, why educate yourself if you can stay stupid and narrow minded all on your lonesome.

    A small group of very rich people are creating “money” out of thin air to loan to suckers like you and they charge you a fortune in interest. If you did that you’d be in jail.
    What’s more at this moment they are buying real world assets with their funny money. If you or I did that we’d be in jail.

    Who made them God and entitled them to print money out of thin air?

    Nah, lets harp on calling scum, scum instead of asking ourselves why it is that we are paying through the nose for money we could print ourselves through our representatives and with very strict save guards.

    How about paying no tax and keeping our hard earned money were it belongs; in this country for the people who earned it with their hard slog.

    That should appeal to your right wing mindset (Still in the old obsolete left/right paradigm yawn). Here’s what Ron Paul has to say about it.

    Ron Paul is a Conservative Republican presidential candidate but the chance you have heard of him through our corporately owned MSM.

    And this is a video called Fiat Empire about fiat (Out of nowhere funny) money and why the federal Reserve of NY violates the American Constitution.

    Gingercrush,

    It’s a whole lot of money borrowed from the Federal Reserve by the US Government to be given back to the banks who own the Federal Reserve in the first place and we get to pay a bucket full of interest on top of paying back the money they created out of thin air. It’s called a Scam.
    To fully understand the Scam please watch the two video’s I gave links to.
    Give it a shot. What’s the worst that can happen?

    In the best case you learn something and in the worst case you can have a good laugh about how ridiculous the video’s are.

  20. northpaw 20

    Travellerev,

    Dearie me, I sure don’t think I deserved Do you understand what I’m trying to tell you? Or are you even interested? Did you watch the video’s in order to educate yourself? Nah, I didn’t think so, why educate yourself if you can stay stupid and narrow minded all on your lonesome.

    Could this be the same Eve as prior posts had suggested a welcome change and earned a note for me from jozinny..? If it is, then the above would seem the result of connotation collapse..

    Not to harp, for I am as intent as yourself in knowing what gives, but for me the solution is more important. Slag, for instance, is the waste of a hot process. Unlike scum which floats and floats and floats and generally remains buoyant(present) for always. Slag, a solid impurity, is either taken off or sinks or is consumed by the hot mix upon which it, too, floats.

    More apt. I’d say. Though earlier I had left such thinking to your better judgement.
    Right now, this looks like tis not me that needs help.. or release from whatever tension has built up..

  21. northpaw 21

    What is so fundamentally great about Obama’s stimulus plan and Britain’s? Sure its a whole lot of money but what it is actually being spent on?

    To state the obvious this “whole lot of money” is available to those willing and able take it for what it can do primarily for Americans.

    What it is not for — and sufficient expertise combined with electors’ strength has prevailed upon the Senate — is fake scams and schemes (eg, the republican senator for Utah) to have up to $50bn of the Stimpack taken up with long term construction costs of nuke facilities when that money is for affordable renewable energy projects. [ A point the msm has missed to date.. ]

    A point I include here to suggest that when you have budgetary abusers like this to put up with.. why would you seek attract more from forward announcements..?

  22. Bevanj 22

    Thanks Magnus I’ll get to reading.

  23. Northpaw,

    I haven’t got a clue what you’re on about but it sounds very mysterious and I’m sure it means a lot to you.

    In one of my previous post I stated that in the banking world scum floats to the top and NP, JK floated all they way to the scummiest part of the international banksters world. The city of London, Wall street and the Federal reserve of New York.

    Try watching the Money Masters and Money as Debt for an explanation of this statement. I haven’t got the time to waste.

  24. Do I have to spell it out to You?
    More government spending ultimately has to mean higher taxes or more borrowing which also means higher taxes to pay off the debt. Or they can crank up the reserve bank printing press and create more money leading to runnaway inflation Zimbabwe style.
    We already pay nearly half our income in various taxes and levies. How much more do you suck out of us? How many more private businesses do you want to go under or go overseas?
    Can you not see how job losses and a deeper recession would result from perpetuating excessive government spending?
    When the government spends our money, we spend less on goods and services then what happens to the workers who are providing the goods and services we can no longer afford? Government spending only creates jobs at the expense of jobs in the private sector. Watch out for the unintended consequences for goodness sake!

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