Serious, what in the hell. I am sick of reports that talk about these massive benefits of government spending without actually looking at them in context with, you know, opportunity cost.
I was annoyed with the way a PWC report was used, and now this release on a Covec report is similarly dodgey. The report is probably fine (although I have not had the good fortune of reading it), and probably defines exactly what they are looking at and why – I have faith in NZ economists. But this:
Williams said the report showed that the Government’s contribution to a rescue package should be at least 25 per cent because the tax receipts would make it cost-neutral.
It makes me angry. So angry I am going to avoid writing any more as I will end up viciously attacking politicians such as Mr Williams for obvious mis-information.
The only reason to get involved is real externalities, doing a partial eqm analysis and saying the tax take rises involves ignoring where the hell the tax comes from and the opportunity cost. Treasury is right when they say this is neutral.
Update: Paul Walker comes out in favour of this irritation.