Wednesday, September 1, 2010

$250 Million Every Week

So we are reminded at every opportunity, tiresome time after time, by the mechanical mouths from the right and the lunatic loons from the left. They shout about the fact that the NACTionalMP gummint is continuing to borrow, as NZ slowly recovers from Michael Cullen's recession we didn't need to have.

Just like the irresponsible and incompetent media who today are turning cartwheels in an effort to sensationalize the SCF depositors guarantee pay out, these foolish people fail to tell you the other side to the story. You see, there ALWAYS is another side to their stories which remains undisclosed.

Adolf doubts any of these fundamentalist shouters or lazy reporters has ever read a set of accounts. Had they done so they would know the cost of the SCF guarantee is not $1.7 billion but rather some insignificant sum or perhaps even zero once the receivership is concluded.

It is just as well newspaper reporters don't run the economy. They cant even get simple maths roight. On one hand the Herald shrieks shock and horror over the 'bailout' costing every man woman and child $405 while Stuff informs us the cost per person is $372. These are the nations LEADING newspapers, folks.

But back to the notorious and much hyped $250 per week borrowing. It simply ain't true.

If you go to the gummint accounts for the twelve months to May 2010 you'll see the increase in borrowings was not $250 million per week.

No, the actual figure is $166 million per week. If some of the fundamentalist fools who populate blog comments threads had bothered to look they might have learned that a major part of current borrowing simply rolls over existing debt. It's called refinancing, chaps.

Perhaps the right wingers (stop borrowing, stop benefits, slash gummint expenditure, let the market sort it out) would have preferred to simply let a quarter of the population starve and resort to crime to survive and perhaps the leftist zealots would have ramped up the borrowing to $500 mil per week so as to pour paper money into a paper tiger called the Cullen fund.

Adolf congratulates John Key and Bill English for getting the balance pretty much right.

The fiscal and personal consequences of moving to any of the positions advocated by the unbalanced extremists would have made the 1930s look like a church picnic.


Anonymous said...

"Perhaps the right wingers (stop borrowing, stop benefits, slash gummint expenditure, let the market sort it out) would have preferred to simply let a quarter of the population starve and resort to crime to survive"
Being a bit of a right winger myself, i do not wish to see people starve. But I am sick of them dipping into my back pocket when there is not a lot left in their at the moment.
It is the attitude that astounds me.
The sense of entitlement that
a) I am entitled to a handout. Moan if it is not enough
b) I am entitled to a job, an if the employer doesn't like me fore any reason, it is his fault


Anonymous said...
This comment has been removed by a blog administrator.
Adolf Fiinkensein said...

Sludge seems to have forgotten he's on holiday.

Anonymous said...

You make $166 million sound like chump change because its less than $259 million. The fact remains that we are in debt up to our eyeballs and that is not a healthy position to be in when we are in decline. More of the same hoping for a better day tomorrow is not the answer. I often wonder what Bruce Beetham would have done.

Anonymous said...

There are plenty of people who resort to crime in spite of all the handouts.
People like me would not mind the borrowing if they saw something for it. We would not complain if the government was actually improving the country with that money instead of giving it away or wasting it on nonsense like the treaty garbage or government departments that stand in the way of improving our standard of living.

Adolf Fiinkensein said...

Anon 8.36 no, not chump change. Just a hell of a lot less than the over hyped and much spruiked $250 mil

That's the point.

The second point is, what would you have done differently which would have NOT seen you chucked out on your arse at the 2011 election?

MikeG said...

I think that you'll find one of the chief spouters of the "we are borrowing $250 million a week" is the National Party, in particular Farrar.

Anonymous said...

What is the effective margin between the rates that Bill has borrowed at and will be effectively on-lending at, given that the govt now owns the loans book? Will this margin generate a sufficient cashflow to allow the receiver to be paid whilst meeting the ongoing running costs of SCF, i.e. what will the net cashflow be for the venture which has been Nationalised? Effectively what appears to in train is that Hubbard will wear all the losses, (as his equity in the company has efffectively disappeared) the Government will cross subsidize the initial losses with the guarantee premiums and so recoup the likely $200m loss. Will the recapitalised entity be "sold" to Kiwibank to make that organisation a $3B bank?

mawm said...

Well the $405 per person (easier math) is $1215 for my family plus the $1620 for the 4 bludgers I support.

Then there is the Treaty Gravy Train, the DPB breeders, the iatrogenic mentally ill (from dope), etc.

That adds up.

What gets up my nose is that those who took the risk of investing at 8% are getting their loss paid for by me whilst I have been very circumspect in my investing, having gone for the low risk and low return products.

Adolf Fiinkensein said...

Nobody seems in the slightest bit interested in the opportunity cost of NOT activating the guarantee.

Anyone care to speculate on the real cost per capita of allowing SCF to turn into another Hanover style debacle and disaster?

I'll bet it is a damned sight more than $300 per head.

Anonymous said...

the markets factored in that the cost was approximately 1.25% as shown by the slide in the NZD, which will reflect in higher interest rates due to the effect on inflation, and the further tilting of the government into the red.
Yes the balance of payments might improve a little if we can sell a little more product, (perhaps some of that SCF funded dairy conversion produce might find a new market)

Anonymous said...

One wonders whether Adolf is one of Key's governmental spin machines.


Adolf Fiinkensein said...

Sally. My dear lady, if you are going to comment here you will need to keep a civil tongue in your head.

It might help also if you bring to bear some logical argument to show why the measured commentary on policies and actions which enjoy approval from over 50p% of the populace constitutes 'spin.'

If you can't do that then you might as well stay away and bestow your snooty views on some other poor bastard.

KG said...

I'd have thought that--given the behaviour of some people in here which you were silent about, Adolf, that Sally's comment was a perfectly reasonable observation.
A little snarky, perhaps but one hell of a long way from the kind of comments aimed at Redbaiter and D4J that you condoned.
Touch a raw nerve, did she?

Adolf Fiinkensein said...

KG, I don't interfere with comments on other author's blogposts. (Well now and again where excessive use of obscenities occurs.)

Anonymous said...

Sally rests her case.

KG said...

Fair enough Adolf. I concede the comments weren't under one of your posts.

Adolf Fiinkensein said...

KG, I might tell you the fingers were twitching over the keyboard.

KG said...

we've all had that feeling!

Fred said said...

Go back to raising the bar at your own blog KG before worrying about standards here. You know like how you call female posters 'bitches', ban all commentary that doesn't go along with your extreme right wing sheep, while you rev them up by wanking on about how the English Defence League needs to become more violent.

You sad old twat.

KG said...

It appears civility is wasted when around some oafs....

Leftists are banned in CR, Fred, yes--and thanks for demonstrating so eloquently why that is. :)

KG said...

Oh, and perhaps you'd care to point us to the superior standards displayed on your own blog, Fred?

Thought not. Much easier to parasitise others, isn't it....

Fred Said said...

Ah but you see KG I'm not a lefty, I just don't worship a bunch of skin head violent chav's who throw bottles at cops and whose only ambition in life is to bash a paki. And yet you want them to become even more violent.

I did actually read your blog for a bit, only because I was curious as to why it was so often at the top of the blogroll. Then I realised it was just because you spam it with the same old shit cyclical shit every 30 minutes, something about Obama, something about lefties, some smugly ingratiating article about Sarah Palin and then something about the English Defence League ad infinitum.

Heine said...

I dunno Adolf. It seems like it's still an awful amount of cash National are borrowing - when they could have easily kept spending increases at the rate of inflation and sold off "assets" and trimmed bureaucracy at an even rate.

People need to be educated that a Government isn't there to run our lives or to create wealth. Yes Cullen and Co left us in a right state, but Nationals idea of punishment is hardly ideal - giving Cullen a nice payoff job and lobbying hard for Clark to remain at the teat. Good grief.