Thursday, April 23, 2009

Compare and contrast

Next year too late for govt action on recession, IMF warns, New Zealand Herald, 23 April 2009:

The International Monetary Fund has urged governments worldwide to make contingency plans for spending immediately, warning that the economy is likely to lurch into reverse this year.

The IMF's World Economic Outlook report predicted a shrinking global economy would lead to trillions of dollars in lost business, surging unemployment and more people thrust into poverty, hunger and homelessness.

It called for called for more stimulus projects from world governments, including money for public works projects.

Budget to tighten Govt spending , New Zealand Herald, 20 April 2009:
Prime Minister John Key is planning to tighten the belt on government spending, not loosen it, in the Budget next month.

The government has decided against any fresh fiscal stimulus in the May 28 Budget because it cannot afford to provoke ratings agency Standard & Poor's into downgrading New Zealand's AA+ sovereign credit rating, Key told the Financial Times in an interview over the weekend.

New Zealand "cannot afford" to provide fresh fiscal spending for its embattled economy and was instead planning to cut government expenditure, the Financial Times reported Key as saying in the article.

So, in the face of what is now openly being described as the worst crisis since the great depression, our government is doing exactly the opposite of what it should, contracting the economy by penny pinching rather than stimulating it with public works. And the result will be a deeper, longer recession and moe kiwis out of work for longer.

But what do they care? Most of them earn more than most of us could possibly imagine, and as Big News points out, the Prime Minister's salary - unlike the median income - has more than doubled in the last ten years (the CEO of Air New Zealand's salary doubled in the last year alone). These people are simply not in the same boat as us anymore. So its no wonder that they simply don't give a shit.