Moar GDP?

Huzzah! Forecasts.

http://www.treasury.govt.nz/budget/2012/taxpayers/b12-taxpayers.pdf

“I wonder what our economy would look like absent the overseas money?”

I suspect that absent the lending something would have happened – less investment in housing and agriculture probably. Or at least investment in different way. Probably lower consumption as well, at least in volume terms. It would have been a credit constraint, so it would impact in whichever way that comes in.

We can’t think of it in terms of “an individual not borrowing” as macroeconomic issues are a bit funkier. Eg, imposing a general constraint when the liability is mainly concentrated in certain hands doesn’t necessarily help matters – and explicitly hurts a bunch of vulnerable people with volatile income.

My main thing is, figure out where our concern lies, and deal with it directly. Saying we are about to collapse, and then using it to sell an unrelated policy, is the increasingly common attitude that led me to spit tacks here 😉

I couldn’t find a forecast, but it wasn’t for lack of trying. What I did notice on the RBNZ website was that gross overseas debt has been relatively stable over many years, albeit gradually increasing over GDP increases, but I wonder what our economy would look like absent the overseas money? Cuba?

Cheers – although tbf that doesn’t include forecasts (which I think nudge it back to 80% over the next few years … I haven’t actually read the Budget forecasts yet 😛 ).

It is at a level where, given fair assumptions about what NZ is, it is symptomatic of something. Which is wy so much has been written about it, and so many “savings” related policies (national savings – not individual savings, which in a macro context are not always consistent) and tax policies have been suggested.

Instead, our politicians (and the post I linked – hence the reaction) are offering us unrelated policies, dire warnings of turning into a basket case … for having a large and risky net debt position that we have had for a while.

And all of this exists without me mentioning the fact that the deficit is probably overmeasured … a fun fact we can leave for another time 😉

Try here:

http://www.treasury.govt.nz/economy/mei/archive/pdfs/nzecp-charts-apr13.pdf

NIIP as a % of GDP is on page 15.

And it tells a slightly different story to Danyl’s graph!

I think that this isn’t an issue with the left in of itself – it is an issue on all debate. We all have value judgments, but the trick is to try and figure out exactly what trade-off exists before applying this judgment.

There is no need for people to agree on policy conclusions after that, which is cool, but we have to frame the issue in a way where we can understand the problem before we can do that. The reason this frustrates me so intensely is because I get the impression L-G haven’t looked at the trade-off, and have no interest in doing so, as if they did they’d find that for a number of the suggested policies a lot of the “costs” actually fall on their core voter base. As a broader point, if political parties actually cared about outcomes for the people they represent, they would want to honestly admit trade-offs and then try to interpret the social will for this through the democratic process (which is hard given Arrow’s Impossibility Theorem, but still necessary) – instead they pretend the trade-offs do not exist, or paint a false trade-off (we get the RBNZ to buy government bonds or we have a financial crisis … a prime non sequitur) which insults me in moral terms.

I still probably shouldn’t have been as terse as I was in this post – undeniably. But the mix of frustration from seeing these issues repeatedly looked at in misleading ways (without the full set of costs and benefits being considered, which requires “causes”), and the constant calls of economist being “naive”, “stupid”, or “incompetent” coming from many of the same areas (Danyl’s constant attacks on Treasury for the fact that their conditional forecasts of incredibly uncertain variables aren’t always right counts as part of this for me), has overwhelmed my preferred focus on patience.