Bad advice for NZ

Various monetary cranks in both politics and journalism continue to advise that the best way for NZ to get richer is to make our currency poorer. To make it poorer by the simple expedient of diluting its value with truckloads of new paper, to be spent on white elephants of their choice—combined with Muldoonist “capital controls” requiring the permission of the state to transfer your own money abroad.

This advice for the Greeks, appearing today at the Mises Daily, is just as much advice for these deadheads. (I have changed only pronouns, proper nouns, and some of the insults.)

Their statist advice stems from their misunderstanding of basic economics in which they views symptoms as causes.
    They offer no explanation for our increasing debt burden, high cost structure, and high unemployment other than the standard Keynesian explanation of inadequate aggregate demand. Once this fallacious view is swallowed, the prescription follows axiomatically, i.e., devalue the currency to restore competitiveness vis-à-vis foreign markets, which will increase aggregate demand and reduce unemployment…
    That's it! There is no need to cut public spending. Quite the contrary, because public spending adds to the Keynesian concept of aggregate demand, and aggregate demand cannot be allowed to fall…
    These monetary cranks see the world upside down. In their world of aggregate demand, a weaker currency always is preferable to a stronger one, because a weak currency purportedly makes a nation more competitive in international markets. But this is pure propaganda. A weak currency not only makes necessary imports more expensive, reducing prosperity, but it also is an outright subsidy to foreign buyers of a nation's goods. As I have argued in "Value in Devaluation?" and as James Miller has argued in "Mark Carney's Zero-Sum Game," currency devaluation is merely a transfer of wealth from all of a nation's citizens to politically favoured industries, usually export industries. It is no different from giving a subsidy to any domestic producer. The subsidy is paid by all the citizens of the subsidizing country, not by the foreigners who buy the subsidized good. They get a bargain.
    Furthermore, devaluation does not make a nation more competitive. It does nothing to spur increased domestic saving or external capital investment, which lead to the increased application of capital per capita, the only sources of increased worker productivity and the only sources of increased real wages. Devaluation does not reveal the onerous, wealth-destroying effect of economic regulation, not does it reveal the true costs of the welfare state, which relies on high taxes to fund present consumption at the expense of future prosperity. What the state spends cannot be saved and invested, no matter how cheap the currency.
    And, contrary to statements that "improving competitiveness is at odds with the objective of reducing the debt burden," a country will never be able to reduce its debt until it does become more competitive. It may well become impossible for NZ to pay all of its debts if it continues to borrow at the current rate, but this merely reveals the dire reality of current policy; it does nothing to change that reality. The increase in the debt burden must stop! It must stop now!
    …So, the cranks put forward a devalued argument for a devalued currency. And if NZers resist outright theft through devaluation, then the government must trap their wealth internally, where it can be plundered later, by using capital controls to stop transfers to safer, foreign banks. The fact that the free movement of capital was one of the pillars of free trade apparently must be sacrificed for the benefit of the state…
     All tyrants love a crisis…