NZ is unaffordable [updated]

With ballooning debts and interest payments of a quarter-of-a-billion a week – and NZ’s elderly population set to double in the next 40 years --  it’s obvious even to ratings agencies who failed to spot the coming of the global monetary crisis that NZ’s current system (whence one group steals from another using govt as intermediary) is long-term unsustainable.

More old people, combined with a declining working age population, could escalate pressures on New Zealand's long term fiscal position, Standard & Poor's Ratings Services says…
    "Without further reforms to address these mounting spending pressures, increasing net general government debt over the period may weaken New Zealand's long-term credit quality," he said.
    The increasing trend was in line with global findings, with S&P projecting that the government debt burdens of most advanced economies could reach unsustainable levels of more than 300 percent of GDP in the next 40 years, without fresh measures to address long term age-related spending trend.

There is only one sure-fire way to address the rise and rise of Borrow-and-Spend—which even at today’s record low interest rates is imminently unaffordable: Stop borrowing; stop spending.

In other words, stop the moral cannibalism of thinking an ever-growing group of people can live at the expense of everyone else.

How do you begin that? Simple, says my colleague Dr McGrath, taking a deep breath:

The government should immediately take transitional steps toward a privatization of health, welfare, education, accident insurance, scientific research, sport, broadcasting, the arts, charities, aviation, housing, environmental property rights, fisheries, consumer research, trade, electricity generation, sewage services, rubbish collection, water reticulation, gas supply, railways, land information, transport, roading, agriculture, the maritime industry, the fire service, earthquake and fire insurance, the blood service, artificial limbs, forest research, food quality rating, gambling, postal services, symphony orchestras, walking, tourism, deer hunting, apartheid, land ownership, children, disabled people, drugs, property valuation, banking, superannuation arrangements, fishing, business mergers, Maori people, Pacific Island people, motor vehicles, women, weather forecasting, welfare, widgets and juveniles.
    Our credit rating is heading toward junk status, our currency sinking next to the Australian dollar. New Zealand is fast becoming the new Greece. There will be riots in the streets when our debt level leads to cuts in welfare benefits and pensions. This can be avoided if our government acts now.

That’s what a responsible government would do—or at least contemplate. Instead, Smile-and-Wave will keep on spending his time apologising for things TV hosts might say, while continuing to Borrow and Spend.

 

UPDATE:  The “good” news just keeps coming—we’re another quarter older and yet deeper in debt and denial.

NBR: No Xmas present for the economy
   Any pleasant “surprises on the upside” in the December Economic and Fiscal Update are unlikely, says Finance Minister Bill English. Unveiling the Crown Accounts for the June 2010 year this afternoon at the Treasury … Mr English emphasised the government is continuing to increase borrowing over the next few years and the debt will not peak until 2015 or 2016 to buffer the effects of the downturn and also to invest in assets such as infrastructure.
    In cash terms, the New Zealand government has moved form a cash surplus of $2 billion in the 2007 year to a cash deficit of $13 billion this year.
    Net debt is currently around $16 billion but it is “rising rapidly to over $60 billion.

And that, according to Bill and his boss, is the good news.