As a general rule of thumb, whenever someone offers you something for nothing they aren’t telling you the full story – and that is exactly what we have with the Greens stating the Reserve Bank should start rebuilding Christchurch themselves by printing money.
And Nolan concludes his lengthy piece thus:
To summarise I’m saying:
- We don’t need QE in NZ, as we have enough monetary stimulus (and if not we can cut interest rates further).
- What is being suggested isn’t even QE – its the monetization of government debt, effectively a inflation tax to pay for the rebuild in Canterbury.
- It is unlikely that such a tax is the “best” way of raising the revenue to rebuild Christchurch – which should be the primary question.
It's a lengthy but informative piece from Matt Nolan, and it can be read in its entirety here. It's well worth the investment of a few minutes of your Monday.
We wonder if Norman and his Green colleagues have actually considered the implications of what they are proposing (and according to Nolan, what they are misrepresenting), because there will be implications; there is nothing more certain than that.