Fixing leaks with the printing press
Did you notice Building Minister Maurice Wimpianson talking over the weekend about how his head hurts when he wonders how his government is going to “fix” New Zealanders’ leaky homes – a problem said to have a bill upwards of $11.5 billion? How “a Government who's running deficits - and has a forecast track of deficits for many years out - has to just sit there with its head in its hands, saying, 'Well, I just don't how to do this'.”?
What he didn’t say, either last week or last weekend, was that he and his boss John Key have a dirty little secret the implications of which few have yet picked up on: that they intend to use to extricate their government from the problem: they intend to use the power of the printing press to quietly inflate home-owners out of the problem:
“If we can ensure that a homeowner has guaranteed access to funds, and a guaranteed ability to repay [he told a Guyon Espiner too dim to realise what he was saying]. . . we can allow inflation and we can allow rising house prices to let people fix their home and actually move on and move out of the situation.”
“Key’s plan to wipe out the billions of dollars of leaky home liability (and by implication the tens of billions of dollars his government is spending that it hasn’t got) is not to address the real problems, it’s going to be to print money – the age-old remedy of quacks, charlatans and short-sighted so-called statesmen.”
No wonder it looks so appealing to this lot.
Quite apart from all the damage inflation does to an economy, inflating the way out of the problem is simply a way of making savers transfer their resources to afflicted home-owners without the process being noticed. It’s a coward’s way to fix things.
No wonder this lot have adopted it as policy.