Monday, 4 August 2008

Borrowing to fake credibility

JOHN KEY"S NATIONAL PARTY thinks New Zealanders are stupid.  He and his cronies think dishonesty works, and they're prepared to run an election campaign on that basis -- that's the only conclusion one can draw from the headline announcements at the party's annual conference over the weekend.

An honest political party would not maintain that one can maintain current spending levels in every area (including the Welfare for Working Families programme it has now promised to keep) and even increase spending in some areas (such as a new 'Ministry of Infrastructure'), and still be able to afford tax cuts.

An honest political party would know that if you offer serious tax cuts, you need to make commensurately serious cuts in spending

An honest political party knows that offering tax cuts while "borrowing to fund infrastructure" is just smoke and mirrors for "we're borrowing to fund tax cuts."  Only a blind, deaf and dumb National supporter would think otherwise.  (And an honest National party supporter would remember that one of the few promises John Key and Bill English have made is that he will "not borrow to fund tax cuts."  So much for honesty when pre-election promises are broken before the election campaign has really begun!)

An honest political party would know something else as well.  Building "infrastructure" is said by dishonest parties to be different to other government spending, which is all consumption spending. Spending on infrastructure is said to be "investment." An honest political party knows that this is bullshit. 

Investments have two characteristics which distinguish them from consumption spending: 1) they show a return; and 2) they finance their own replacement. An honest political party would know that however you try to slice it, neither is the case with "infrastructure spending."  Borrowing to fund infrastructure is just borrowing to fund a shinier more politically correct kind of consumption, and taking capital away from genuinely productive investment that will actually increase wealth instead of consume it.

HONESTY HAS NEVER BEEN a primary National Party principle. Power lust always has been.  At this election, the National Party wants to pay lip service to  free enterprise and smaller government while ruling out anything, anything at all, that smacks of either of those of its two stated principles.

The National Party has become the stale, hypocritical salon which Ayn Rand describes as "Party X":

    Party X would oppose statism and would advocate free enterprise. But it would know that one cannot win anybody's support by repeating that slogan until it turns into a stale, hypocritical platitude—while simultaneously accepting and endorsing every step in the growth of government controls.
    Party X would know that opposition does not consist of declaring to the voters: "The Administration plans to tighten the leash around your throats until you choke—but we're lovers of freedom and we're opposed to it, so we'll tighten it only a couple of inches."
    Party X would not act as Exhibit A for its enemies, when they charge that it is passive, stagnant, "me-tooing" and has no solutions for the country's problems. It would offer the voters concrete solutions and specific proposals, based on the principles of free enterprise. The opportunities to do so are countless, and Party X would not miss them...
    Knowing that a cut in taxes should be accompanied by a corresponding cut in government spending, Party X would compute the costs and choose the specific government projects it would promise to abolish. If the country heard some concrete details of what those taxes are spent on—such as the story of a few foreign lobbies—anyone but a confirmed totalitarian would scream in protest.
    Party X would set the pattern for the gradual lifting of the tax bur-den—at a time when both business and labor are beginning to realize that the best way to save a collapsing economy is to leave more of their own money to the citizens who earned it.

The National Party wants to have its cake and eat it too. It wants voters to think that it's possible to fake reality -- that one can offer tax cuts while promising to raise government spending in every area .

UPDATE 1: You might recall that John Boy told a recent Local Government conference, i.e., the annual bun-fest for council bureaucrats: "It’s my view that central government has much to learn from local government when it comes to infrastructure planning, investment, and management."  Perhaps if you'd like to go to your desk and take out your recent rates bill, and compare it to the same bill from, say, five years ago, you'll have some indication of just how much he thinks central government has much to learn from local government when it comes to infrastructure planning, investment, and management, and how much it's going to cost you.

UPDATE 2: Liberty Scott comments on National's Think Big "infrastructure policy": National looks to Muldoon and Pork


  1. An honest political party would know that if you offer serious tax cuts, you need to make commensurately serious cuts in spending.

    So: JohnKey is on RadioSocialism now and he said: we will cut government spending to fund the tax cuts. I'm not giving details now, but we will 5 billion dollars of spending (10,000 civil servants) and that will cover the 5 billion additional spending.

  2. Person with no name: If you really think you heard John Key say he's going to cut the jobs of 10,000 civil servants (and since your sentence lacks the necessary verb it's hard to see what you're saying), then you're dreaming.

    However, I invite you to listen to the interview again here when it appears, and transcribe it for us so we can check your claim for veracity.

  3. That said, I did hear the interview with Key, and I didn't hear him say anything like what you claim.

    I did however hear Helen Clark point out that National did once have a Prime Minister who was big on borrowing to fund infrastructure. That Prime Minister was throw out in 1984, but we've only recently finished paying off his "Think Big" bill. For once I agree with Helen Clark: we don't want another bill like that one, or another Prime Minister who thinks that such a project would be sensible.

  4. Bill English's lies about that taped conversation should ring even greater alarm bells.

    Firstly he claimed he did not remember the conversation...then he said "the part of the tape they did not play..." ..(this is the tape of the conversation he did not recall)


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