Thursday, May 27, 2004
A Budget is forever
Finance Minister Michael Cullen is handing out one of the biggest social service spendups in New Zealand history in today’s Budget. Political commentator Brian James says Labour is finally revealing its true colours.
Several major questions beg to be asked of this budget, but probably will not be. Sure, New Zealand allegedly has the surplus cash at the moment to support a wild spending spree. But just like a Christmas pet is forever, so are the expectations of people once they have been handed a new social entitlement. We may be able to afford massive increases in benefits for the next three years, but will we be able to continue affording them in five years, or 10 years? If there should be a downturn in the economy, what happens then? The government that is forced to wield the knife in that case, is going to be the target of a gigantic hate campaign.
And before people start getting euphoric about all the money they are being promised, it is well to reflect on where it is coming from.
The government has no money of its own. It can only give what it has taken from someone else. So serious questions need to be asked about whether it is morally just for governments to rack up big surpluses year after year....just as it needs to be questioned whether governments should go into debt year after year (as frequently happened back in the 60s and 70s).
And few people in New Zealand are questioning whether massive redistribution of other people’s money actually works in the long term. Does it ultimately really improve the lot of the average person? What does it do to the nation as a whole?
We have some very good long-term studies that provide the answers to those questions. They are called “the history of Communism�.
The most redistributive society in recent history was the Soviet Union. The government worked valiantly to make everybody equal. The results of the experiment are now in. When will we learn from history.
I conclude by reiterating what Larry Reed of the Mackinac Institute calls the Seven Principles of Sound Public Policy:
PRINCIPLE #1: Free people are not equal, and equal people are not free.
PRINCIPLE #2: What belongs to you, you tend to take care of; what belongs to no one or everyone tends to fall into disrepair.
PRINCIPLE #3: Sound policy requires that we consider long-run effects and all people, not simply short-run effects and a few people.
PRINCIPLE #4: If you encourage something, you get more of it; if you discourage something, you get less of it.
PRINCIPLE #5: Nobody spends somebody else's money as carefully as he spends his own.
PRINCIPLE #6: Government has nothing to give anybody except what it first takes from somebody, and a government that's big enough to give you everything you want is big enough to take away everything you've got.
Finance Minister Michael Cullen is handing out one of the biggest social service spendups in New Zealand history in today’s Budget. Political commentator Brian James says Labour is finally revealing its true colours.
Several major questions beg to be asked of this budget, but probably will not be. Sure, New Zealand allegedly has the surplus cash at the moment to support a wild spending spree. But just like a Christmas pet is forever, so are the expectations of people once they have been handed a new social entitlement. We may be able to afford massive increases in benefits for the next three years, but will we be able to continue affording them in five years, or 10 years? If there should be a downturn in the economy, what happens then? The government that is forced to wield the knife in that case, is going to be the target of a gigantic hate campaign.
And before people start getting euphoric about all the money they are being promised, it is well to reflect on where it is coming from.
The government has no money of its own. It can only give what it has taken from someone else. So serious questions need to be asked about whether it is morally just for governments to rack up big surpluses year after year....just as it needs to be questioned whether governments should go into debt year after year (as frequently happened back in the 60s and 70s).
And few people in New Zealand are questioning whether massive redistribution of other people’s money actually works in the long term. Does it ultimately really improve the lot of the average person? What does it do to the nation as a whole?
We have some very good long-term studies that provide the answers to those questions. They are called “the history of Communism�.
The most redistributive society in recent history was the Soviet Union. The government worked valiantly to make everybody equal. The results of the experiment are now in. When will we learn from history.
I conclude by reiterating what Larry Reed of the Mackinac Institute calls the Seven Principles of Sound Public Policy:
PRINCIPLE #1: Free people are not equal, and equal people are not free.
PRINCIPLE #2: What belongs to you, you tend to take care of; what belongs to no one or everyone tends to fall into disrepair.
PRINCIPLE #3: Sound policy requires that we consider long-run effects and all people, not simply short-run effects and a few people.
PRINCIPLE #4: If you encourage something, you get more of it; if you discourage something, you get less of it.
PRINCIPLE #5: Nobody spends somebody else's money as carefully as he spends his own.
PRINCIPLE #6: Government has nothing to give anybody except what it first takes from somebody, and a government that's big enough to give you everything you want is big enough to take away everything you've got.
