A depression by any other name still means the misery of long-term unemployment and the struggle against poverty for many, and opportunities rewarded for very few. The full-blown effects of the global economic meltdown, which many international commentators are describing as ‘The Greatest Depression’, have yet to impact here. But already businesses are shutting up shop, unemployment, mortgagee sales and bankruptcies are rapidly increasing, export earnings are reducing, and a prolonged period of economic stagnation is forecast. New Zealand teeters on the brink of economic chaos.
The sheer stupidity, the narrow thinking and the yawningly predictable rhetoric of the National Government in the face of the most serious crisis in decades, does not bode well for a happy outcome. At a time when innovation, workable alternatives, creative solutions, and ambitious plans are called for, the Government is promoting an easing of foreign investment rules, a programme of heavy borrowing, privatisation of state assets, and a cycleway.
True to form, the National Party is reverting to type under pressure. Unfortunately, the Minister of Finance’s “borrow and spend” recession survival strategy is unlikely to succeed. History teaches that this approach is woefully inadequate, even in the short term. More modern, practical tools are readily available and being tentatively employed elsewhere.
For example, earlier this month, the Bank of England announced plans to increase the supply of money by NZ$212 billion during the next three months in order to stimulate economic activity. This measure, known as “quantitative easing”, will be implemented by the Bank creating electronic money to buy financial assets from banks and other investors. Other countries, including the United States, are addressing the crisis in similar style.
Contrast that with New Zealand, where the National Government has announced plans to spend up large on infrastructure development and maintenance by borrowing billions of dollars. A more responsible, sustainable option is to utilise the provisions of our publicly-owned Reserve Bank of New Zealand by drawing down interest free loans for major capital works. It’s our bank, afterall. Social credit solutions are available to any government which is genuinely willing to act in the public good. The absence of sufficient political will is all that stands between New Zealanders and long term prosperity. Given the choice, it seems logical that New Zealanders would opt for debt-free money from their own bank over lining the pockets of the shareholders of commercial private banks any day. And yes, the choice is that stark, and the alternative to the status quo is that simple.
Urgent attention must be given to the introduction of a 21st century financial system to replace the collapsing debt-based system which has failed ordinary people for so long. Social credit monetary reform is an elegant alternative which changes the fundamental workings of the present financial system. New Zealand needs a social credit economy, now more than ever before.
Written by: Stephnie de Ruyter, DSC Party Leader