Top Obama economic adviser: NZ only country getting it right
BUSINESSDESK: The National Party-led government has gained support from an unlikely quarter, with one of US president Barack Obama's former top economic advisers, Peter Orszag, saying New Zealand is "the only country" implementing a balanced mix of stimulus and austerity policies.
"For most countries it's better to combine deficit reduction that you put in place now but that takes effect over time, with ... additional support, and that means stimulus for the economy, effective immediately," Mr Orszag says in a BBC Radio debate during last week's International Monetary Fund meeting in Tokyo.
"What's interesting about the fiscal monitor the IMF published ... as part of these meetings is if you look across all the developed countries, there is only one country... which has actually done that, which is New Zealand."
The country had "coupled additional stimulus with medium-term fiscal consolidation. That's the right policy combination".
Now the vice-chairman for global banking at Citigroup, Mr Orszag was director of the Office of Management and Budget through the height of the global financial crisis until 2010.
Despite the comments being six days old, Health Minister Tony Ryall dashed out a statement today seizing on the endorsement as proof the government is not pursuing austerity policies alone, as its domestic critics charge.
"Orszag opposed the austerity only position taken by the IMF's chairman Christine Lagarde, and Wolfgang Schauble, German Minister of Finance," Mr Ryall says. "Mrs Lagarde and Mr Schauble said cutting spending was difficult but necessary.
"But Mr Orszag said it was better to take a mixed approach – with stimulus for the economy combined with deficit reduction that is put in place now but which takes effect over time."
The government had borrowed "to take the sharp edges off recession, at the same time maintaining strong fiscal discipline," says Ryall, who did not cite the stimulatory tax cuts it pushed through in its first Budget, in 2009, and which its political opponents continue to criticise.
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Comments and questions56
Now we know who is advising Mr English.
The advisor is correct. Look around you, NZ and Australia are probably the only countries who have come through the global crisis relatively unscathed. You need to do some proper research before you rubbish the messenger. Imagine if Labour or the Grens were running NZ over the that period of time. Be really honest (I dare you) and tell me if you think we would have been better off?
Is he? There are a number of developed countries out there posting higher GDP growth than NZ without the same level of increasing budget deficit.
Look at Orszag's background (Citigroup; Council on Foreign Relations): he is part of the self-serving system that created and now prolongs the problem for the rest of us. The opinion of these people should be treated with a high degree of critical skepticism.
Created the problem? Shouldnt you be sleeping rough in Aotea Square with the other people that don't wash?
It wasn't only the greed of bankers that helped create the economic situation we see today. How about unaffordable penisions being handed out in Greece, Spain and France? Which is directly linked to in the main, Socialist governments borrowing to spend on unproductive assets. How about Joe Public spending more than they can afford and running up debt (try the American housing market)?
Given that Obama is the most left leaning President of a generation, I doubt whether he would have appointed a financial advisor he wasn't comfortable with. Just because you don't like the message, don't try and play the man.
Left approach is to play the man when faced with things like facts or even opinins that are not agreed with or sanctioned by the masters of the left. Great sentiment to ask to not play the man, however futile.....
Congressman Ron Paul has explained all the problems you describe; these actions are all the direct consequence of printing money to benefit banks and to satisfy big spending and big war plans of politicians. The consequence is low interest; low savings; less production; less employment (7% unemployment in NZ is nothing to be proud of), more inflation and a debased currency. The banks benefit because they get the money first - Citigroup received $2.5 trillion in printed money (see p131 of the report) http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3. The Council on Foreign Relations was a shill for the Iraq war http://www.cfr.org/iraq/stem-terrorism-depose-saddam/p4244. Who did that benefit? The system is corrupt and self serving and no wonder when people like you "play the man" to defend it.
What a load of cobblers. The economic paradigm is hopelessly broken and Americans are politically clueless as much as New Zealanders, convinced by their own propaganda that there is no alternative. An economic system based on selfish intent is no substitute for a system that can maintain a sustainable existence. New Zealanders better wise-up soon and stop listening to those Americans who wish to preserve the fatal status quo.
good lord and god help us all. Obama's been trying to help the poor for 4 years and urging all americans to spread the wealth. quite the opposite policies currently being implemented in NZ where we have the greatest increase in inequality between the very rich and the very poor.
No wonder he's a former advisor
NZ needs to remove all taxes from the poor, make first $30,000 unreportable and cut all income taxes to flat 25%, reducing 5% per year for next 5 years until all personal income taxes are removed.
Then watch the economy roar!
How do you propose the government pay for healthcare, public schools etc or repay existing NZ debt without taxes? Its a big balancing act and I think they're doing the best they can.
Thats easy, sell off all state houses cut welfare payments in half. People who don't want to work for a living can build their own homes from old packaging and recycle plastic bottles for beer and food money like they do in India.
This is definitely the wrong approach. There are heaps of people on a benefit that can't find work. Now you want to push them to the tip to live with the rats?
What kind of person are you?
Navy are recruiting.
Why is it the wrong approach?
This will teach independence and work ethic.
The people of India hard working and can turn a buck out of anything,
It will also reduce the trash going in to land fills as it gets recycled to the max.
Don't you care about the environment?
What kind of person are you?
Voluntary donations. NZ is a free society, right, right?
Then watch the infrastructure, schools, police and all other govt services slowly crumble into dust.
A small price to pay to put all the Local Authority Bureacrats and parasites such as Auckland Transport out of a job.
Remove tax from the ppor? The poor don't pay and tax to remove! They are all net beneficiaries from the Government already!
Ssshhhh, the "remove taxes for the poor" bit was for the journalists' consumption only ...
Eveer heard of GST?
I cant believe the negativity from the armchair experts. If you look at NZ vs almost all of the Western economies we are in stellar shape, get a grip on reality people. we in NZ are very lucky. Would you like the Labour / Greens to spend all the money we don't have?
7% unemployment is not stellar. Keynesian economics is a failure; time to listen to what the Austrian school economists have been saying for the last 140 years.
New Zealand is cr*p and John keys is making it worse he's a slimy looking man that needs to be bored out of power
you need your head read mate
Stop being anonymous, and talk sense. Tell me how you think any other outfit would have run this country better.
Your comment just make you look stupid...Perhaps you could try submitting a reasoned and rational argument
It's very clear who is pulling the puppet strings of the New Zealand PM "DUNNOKEYO"......follow the money!!!!!!
wow. sumtimes we just have to look around, its time to "back" our country and let them get on with there job. isn"t that what we are told to do in ours? stop complaining and get on with living.
Its clear most of these posts are political. ie Labour/Greens. The reality is NZ is doing well, and incredibly well for a country that suffered a major earthquake, the economy is'nt booming, but we are doing relatively well even compared to Australia where unemployment is rising. I'm glad i'm in NZ. If your not, you have a choice...
Really ?
Most of the posts seem to be extreme 'rightists" wanting less spending on social welfare and lower tax.
There can be only one appropriate respnse to your comment.. Duh !
Have you forgotten NZ are borrowing externally like mad to fund its present lifestyle and reduced taxes for the better off. Not to mention the ongoing annual income deficit of 10 plus billion a year.
If this is a good position then I'd hate to see your set of accounts.
Makes sense to be borrowing like mad now, interest rates are as low as they are going to get.
A lot of us are doing ok, but then we don't sit around complaining about everything. The govt isn't there just to give some of you a handout.
Yes back NZ 100% but don't sell the turf underfoot in the process. Going with what's been in the news over the past few months it appears that if there is money to be made, irrespective of fallout, SELL. The general impression around the globe at present is that if you throw money at NZ irespective of your background, you can come, see, buy, and the hell with the locals.
This is very illuminating and indicates where we are going wrong.
Obama has been the most destructive leader that the modern world has had the misfortune to see.And a big worry that Key values Obama!
What we need to lead us out of the economic wilderness is a strong right-leaning leader.
liberte
Try reading what the guy actually said.
What the critics in the above posts don't realize apart from their own conspiracy theories is that this country is on track to be out of debt by 2014. Which is a huge achievement by the Key Government., No thanks to the lefties, and 8 years of government under Helengrad.
Once in the black, there will be benefits for everyone not just beneficiaries, but the workers and businesses as well.
I have no time for left wing finger pointing, accusations without evidence or substance, all for the the purpose of buying votes with no policies to back them up.
Show me the money!
Big fail. NZ will not be out of debt in 2014, purportedly the govt. will merely be back in surplus ... big difference. Actually a surplus means they have collected too much in taxes.
The accumulated debts of the NZ govt., the national debt, at that point will still be hanging around the tax-paying population's neck like a dead weight for decades to come. Not to mention the local council debts, pension obligations, and etc, etc.
Interestingly, Cullen managed to pay down some of the national debt during the golden times, but also managed to squander much more on crazy, central-planning schemes like toy railways, endless govt. middle management jobs, racially-based school programs and etc, etc.
JK needs to stop listening to rubbish such as this.
A right-leaning leader is what NZ needs to correct KK's nine years of socialist destruction.
WG
I know the whingers and barrow pushers above wouldn't believe it, but the world's top economic and policy advisors will agree on New Zealand's stance, and nobody has yet provided a credible alternative budget
Evolution will prove what is already known and accepted by a few that government interventions only slow down economic growth. And economic growth is merely the total sum of everyone's pocket being filled as they supply goods or services that others want at the least price. The problem with QE stimulants [printed or debt] to support people e.g. infrastructure subsidies, is that the recipients are essentially robbing their own and other's children who have to pay for it all later. This is similar to credit fuelled house price increases.
And you lot think that a man who can't remember what he said a few houirs ago let alone what he said a few months agfo is going to help us out of the supposed mire.
He would probably forget where he has put the piggy bank.
The vitipurative ravings of the loony right are sure having a field day today.
Tax rates for the wealthy should be raised back to 33% for earinings above 150K (and I am one of these).
Tax havens should be abolished and if you make your money here you should pay tax here. Fay and Richwhite and thier ilk should be asked to surrender their passports if they choose to live in a tax free haven.
Apprenticeships should be reinstated and encouraged and compulsory savings should be reinforced.
Just look at the wealth of countries like Singapore.
Also progress predicated on growth is now so out of date that it has to be doomed to failure. Sustainability is a far better alternative and we will be forced into it in the long term anyway.
What does this sustainability of which you talk mean? That we all feed , house , clothe and educate ourselves?
No need for tax on incomes then: all that we need to fund is law and order. GST will more than cover it.
I wonder if the article could be drawn in comic book form so that the Labour party could read / understand it.
And interpretive dance for the Greens?
That's certainly a better idea than putting it on video, cos nobody in the Labour party would be able to find it, unless of course it was blue, then Shane Jones would discover it.
Sustainability means to get some of the freight miles and therefore costs out of our lives. Better public transport, smaller cars or at least those that are more fuel efficient, growing some of your own foodstuffs (vegetables in particular). Using more natural livestock farming methods reducing the impact on our arable and agricultural land.
If we used less fossil fuels the price would come down.
Solar energy in our houses, better government payback on exporting to the national grid of power generated during the day from solar panels. Better financing of solar systems so the payback is quicker and yes contibute a bit more to looking after ourselves.
Your idea of no income tax but perhaps a higher tax on spending such as higher G.S.T. or sales tax on some luxury goods is worth looking at. MacDonalds and Burger King for a start.
Overseas investors also think our economy is doing great, note the sustained high value of the dollar against every other currency. They are of the opinion that the NZ economy is good enough to bet on - big time.
Suuuusssstainability.......sod it lets cancel the emissions scam so we can find a stream and some rocks to wash ourselves with....solar panels....... ha... hhhaaaa......next you'll be saying the big yellow thing in the sky has nothing to do with global warming/cooling. haaaaaaa....
no one needs a fad to exist.
Thanks NoNy Mouse for some thoughtful comments at last. Nice that you advocate a return to higher taxes for earnings over 150K when you are in that bracket yourself. Since the moguls caused this crisis, they should, in fairness, suffer most of the pain, rather than flogging the 'poor' who are the ones mainly copping it in Greece, etc. And it's well to remember that our PM was one of that money-shuffling ilk.
Tax evasion by dint of trust shelters, tax havens, etc are a blight on capitalism and more damaging than 'bludging beneficiaries'.
Progress predicated on growth is as unsustainable as chain letters and pyramid schemes - a few take the spoils at the expense of the majority.
The deliberate dismantlement of apprenticeships is a crime as tradespeople are at the heart of our productive segment.
Not sure that Kiwis could stomach a dictatorial regime like Singapore's though, despite the wealth it has brought them. Very few dictatorships remain benign for long.
NZ is lucky Cullen didn't give in to the National party's constant urgings to spend up large and eliminate his surpluses. He had government debt virtually zero at the start of the crisis. Our problem has been private debt.
Also interesting that the right-leaners feel the need to continue with their personal assassination of opponents with vituperative labels such as Helengrad.
Nony Mouse need not worry,as I see that Scientists in the UK are now producing gasoline from the air - carbon dioxide and vapour
One thing for sure is that the worlds economic woes will not be cured by Socialism
"NZ only country getting it right"
So where is the news??
Everybody knows that is correct!
Jobless growth is just telling us that the financial sector is exploiting the productive sector even more, which is like the parasite turning on the host. The banks are bloodsuckers. I back the majority of NZ'ers 100%, which is why I don't back the foreign Bilderbergers. If NZ wants to be a sovereign nation, we should issue our own debt-free currency backed by the people and publicly monitored, instead of going humbly to the global mafia for their 'bankruptcy script' introduced in the 1930s.