Or so Russel Norman said when asked by Paul Henry earlier this week what the most common misconception about the Greens is. What do you think? I’m going to try a poll for the first time ever on tvhe, hopefully it works:)
I somehow stumbeled across this article from the greens (don’t ask me how..) which I think illustrates their understanding of economics
I’ll be honest and admit I stopped reading the article after the paragraph i’m about to reproduce so I’m open to accusations of trolling, but this was little gem
“Reducing saving by cutting KiwiSaver is the same as increasing debt. It won’t show on the Government’s balance sheet, because Key has swapped Government debt for private debt. Lower savings will show up on households’ balance sheets as increased private debt, which is already too high,” Ms Fitzsimons says.
Two points here:
- Households face a budget constraint, how does lowering saving increase debt?!?
- people might borrow against their government subsidized kiwisaver account (ht Matt Nolan)
I’m slightly baffled on how lowering savings increases debt. If we look at things at a very holistic level consumers have income and borrowings which they can use to save, consume or pay off debt.
If you push down savings you can consume more or repay more debt, if anything it seams to be me lowering savings will reduce debt.
Now i’m just hoping that someone tries to argue that by having money in Kiwisaver that money grows and thus you can use that to pay off your debts, do it, I dare you:D