Government debt? Let’s print money!
Posted by Daniel Farrell
I actually cringed when I read a press release from the Democrats for Social Credit this evening. While they are suggesting partial asset sales is the same as the privatisation of the 80s and 90s, they also suggest something more disturbing… That the best way to solve the government debt is effectively to print money.
The press release says:
“As yet, the Reserve Bank of New Zealand is still in public hands. As it shored up the commercial banks during the 2008 credit crunch, the RBNZ has the capability to issue credit lines and even debt-free funding for significant events such as the emergency in Christchurch. In fact, the RBNZ creates and issues money already, in the form of notes and coins. An electronic version of this money creation could be issued, not to on-sell to commercial banks, but to the Treasury.
“The RBNZ is our bank and should be used for our benefit. Government borrowing programmes could be ditched, new public assets such as schools and hospitals could be built, transport infrastructure could be well maintained, and asset sales could be taken off the agenda, for good” said Ms de Ruyter.
Need I remind you of some classic examples of printing money? What happened in Germany post World War One? The world wanted compensating for the war, and the Treaty of Versailles said Germany should pay a whole bunch of money in order to compensate effected nations. So, as Germany couldn’t afford this, they printed money. What happened? Hyperinflation. What was the result? Hitler was able to come into power and lead the Nazi Party to the German Government. We all know what happened next.
What about another? Robert Mugabe has printed money for years in Zimbabwe as a way of making people richer. All it has done is cause hyperinflation. The people are hurting, because they need a wheelbarrow full of money in order to buy a loaf of bread.
Is this what we want in New Zealand? If the only option to save New Zealand, other than asset sales is printing money, when we see what happens when we print money, we surely will decide asset sales are a good idea.
Please note, I’m not saying it’s the only other option. There are many other options. However, the press release I’m commenting on is saying that it is, so that’s the context I’m talking in.
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Posted on June 30, 2011, in New Zealand Politics and tagged Asset Sales, Democrats for Social Credit, Germany, Hyperinflation, Nazi Party, Printing Money, Robert Mugabe, Stephnie de Ruyter, World War One, World War Two, Zimbabwe. Bookmark the permalink. 8 Comments.