The BS Lies Of The IMF - NZ

[Ryan-NZ]

"NZ Initiative: IMF report into NZ economy 'cringeworthy praise' - NZ Herald"

https://www.nzherald.co.nz/business/nz-initiative-imf-report-into-nz-economy-cringeworthy-praise/54JQ2U4N5Y6VNOTQNTYB4U5MDA

Excerpt: The IMF's latest staff statement on the New Zealand economy was released last week. On my reading, the statement unfortunately falls into the cringeworthy praise category.

The overall thrust is that New Zealanders are doing well under the guiding hand of a competent and benevolent government.

The statement praises the government for its "strong economic and health policies". Its management of Covid-19 has been "successful" and "sound". It provides no evidence in support of these conclusions.

It endorses the government's ad hoc interventionist measures in housing. It recommends they "be maintained". Yet the longer anti-landlord and distortionary mortgage lending policies remain in place, the more serious the unintended consequences.

It even endorses "complementary measures" to further reduce carbon dioxide emissions.
Yet, measures such as subsidies for electric vehicles cannot reduce net national emissions. Under New Zealand's emissions trading scheme, net zero carbon emissions by 2050 can be achieved at lower cost without such measures, given the public will.

It commends the government's Income Insurance Scheme. It argues that it "closes an important gap in social protection". This is not a wellbeing consideration. A wellbeing approach would establish that employees have no better way of spending the estimated annual cost of $3.54 billion. Tell that to struggling households.

Nor is there any obvious "social protection" gap. New Zealand has had an unemployment benefit for all of living memory.

More disturbingly, the argument seems to assume the desirability of cradle-to-the-grave social security. That proposition ignores costs and assumes a benevolent but necessarily dictatorial government.

Such utopian thinking is dangerous for our freedoms and prosperity.

In short, the IMF's unqualified endorsement of the government's success in responding to Covid appears to lack any analytical basis.

The future cost is a worry. News media reports of householders struggling against the rising cost of living are proliferating, independently of the latent increased debt burden.

Meanwhile, under the "strong economic management" the cheap and plentiful money contributed to skyrocketing house prices that put home ownership beyond the reach of many.

To cap it all off, the document considers that there is fiscal room for further spending increases but, according to one report, not for tax cuts.

It is hard to see anything in this statement that the Prime Minister's advisers would not have written, given the chance.