Busy Doing Nothing

Brian Fallow writes a succinct summary of the past year in economic terms. Phil Twyford at Red Alert selectively quotes from Fallow’s article to make the point that National is apparently doing nothing much to help us out of the crisis. I don’t think that is the real import of Fallow’s article. Fallow’s point is that New Zealand was well placed to do exactly nothing much. The parameters were right for New Zealand to essentially coast through this recession, avoiding the obvious pitfall of massively increasing debt to cushion and extend the recession. Fallow correctly points out that the time is nearing when, as the recession ends, hard decisions will need to be made. I expect some much deeper cuts to government spending in the next budget and significant tax cuts the year after that (there must first be decent government savings before tax cuts are viable)

To summarize:

National did little or nothing to help us through this recession.

Nothing was exactly the right thing to do.

Additional

I don’t think for a minute that National have literally been doing nothing for a whole year, just nothing interventional in the economy. Just thought I’d clear that up before I find myself misquoted at Red Alert or (worse) the “Standard”

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