Ireland facing massive spending cuts

Ambrose Evans-Pritchard in the Daily Telegraph writes a depressing forewarning to those in countries engaging in massive debt funded state “stimulus” activities. He does so by pointing at Ireland, where the news is truly bleak. Given Ireland has a similar population to New Zealand, it is worth those who preach “borrow spend and hope” to give pause for thought.

Ireland, you see, has gone down the stimulus line. It bailed out its banks, guaranteeing all deposits. The result is a debt trap imposed upon the state. The interest is now crippling the Irish government. The Irish government is currently borrowing 300 million euro a week to cover this, at penalty interest rates for fear it will default. You see Ireland has external debt of 811% of GDP, albeit this includes substantial private debt held by financial institutions, but it also includes government guarantees of bank debt and the nationalisation of banks.

A report commissioned by the government aims to abolish the budget deficit by 2011, and recommends drastic cuts:
- 17,300 public sector jobs to go;
- 6,900 teacher jobs to go, with commensurate closure of many schools;
- Public sector pay cuts
- Welfare benefit cuts of 5%
- Child benefits to be strictly targeted
- Hospital A&E fees to be increased.

Without such drastic measures, Ireland risks defaulting on its debt, making future borrowing near impossible, forcing Ireland to cut even more drastically. The article expresses fear that other Western countries, such as the UK and the US, face similar risks. UK national debt is now over 90% of GDP, France is approaching that level, Italy is at 120%.

You see, Japan has been engaging in fiscal stimulus for well over a decade now, to no avail. Public debt is estimated to be 240% of GDP by 2015. Hasn’t quite worked has it?

The truth is that Gordon Brown, Barack Obama and Kevin Rudd have all embarked on a gamble with your childrens' taxes - fiscal stimulus is being undertaken because the short term political gain is to soften the recession - and because none of them have a political instinct for less government - and none of them are willing to take a gamble on "do nothing you can't fix it".

After all, do you think people in the British Labour Party, US Democratic Party and Australian Labor Party sit around thinking how they ought to get out of the way of people?

Oh and if you want to read the report on cutting Ireland's public spending go here, and here. You'll see it isn't half as dramatic as many are making out.

Goff lost the fiscal plot

Seriously!

Phil Goff. The man who brought student fees to universities, arguing for a massive expansion of the welfare state? Labour has lost the plot.

To call for the partners of those who are employed to be eligible for welfare benefits is impractical, unaffordable, immoral and destructive. Consider quite simply how many hundreds of thousands of people would then be welfare beneficiaries, consider what disincentive it creates for work, consider how much more tax on the employed partner would be needed to pay for this.
John Key says there are no pixies printing cash (he's not quite right there), but this harks back to when the Labour Party regarded fiscal prudence as some plot by the bourgeoisie.

Consider how parasitical this would make so much of the population. Husbands shouldn’t pay for their wives, or vice versa, no. The state should, and hubby can run off with ALL of his earnings (more highly taxed) and wife can just bugger off and enjoy her benefit. If the notion of the welfare state as a safety net is widely accepted by the majority of the population (doesn’t make it right), what does the Labour view of the welfare state tell you? That half of the population should be supported by the other half – with a leviathan state to enforce, violently if necessary, the leech like demands on the productive, to pay for everyone else.

Think more how many people would be grateful for this kindness, how many would vote Labour to keep it, and what a travesty of modern liberal capitalist society such state enforced dependency would represent. Not a society of free individuals pursuing their interests, desires and being what they want to be, but a society where half work hard to sustain themselves and their families, and another family at the same time, and the other half take their “entitlement” from the loving state – knowing they don’t ever have to really be accountable for it.

It’s what the Greens have always really believed in, and what Labour now espouses. So imagine a teacher asking a classroom of kids. How many want be paid for working, and pay half of what they earn to the government? How many want to be paid for not working, getting all of it from the government?

Not your's to spend Phil!

Phil Twyford, who is being touted by Brian Rudman as Labour’s big leftwing challenge in Auckland, is damning Rodney Hide’s local government policy for Auckland, with a “Not Yours to Sell” campaign regarding Auckland local government “assets”.

The campaign is to stop the government allowing the new Auckland council to sell whatever it wishes on the same basis that it currently can buy whatever it wishes. In other words, it levels the playing field ideologically between more and less government, as far as you can do. The “people’s assets” of course are anything but, since if they ever generate a financial return, the money is typically spent for local government to do more, not to reduce the burden of rates. Similarly, whenever they are a liability, few on the left are keen to let them go.

Rodney Hide’s call for a cap on rates which basically means that rates can’t increase beyond inflation, is barely a cap at all. Rates have long gone up as property values increased beyond inflation, as has the roles and activities councils have sought to pursue.

I have a simple message to Phil Twyford. Ratepayers' money is not your's to spend, or councillors. It's not your damned money! Twyford says Labour believes in "trong communities" which is code for "strong councils". Sorry Phil, communities don't exist because councils make them so, people fund raise, establish businesses and help each other out without some mediocre left wing loud mouth like Richard Northey having his hand in their wallets.

However, Twyford is of the school of thinking that government exists for the good of everyone, and if it decides to spend your money, you should gladly surrender it for the greater good (and the likes of Twyford to get a living while he spends your money).

In an age when people are scrimping and saving, and the private sector cutting back, it’s time for local government to do so as well. Rodney Hide's proposals wont decimate local government, at best they'll just stop things getting worse. What is needed at the very least is for councils to be told what they can do - and be given the next two years to get out of everything else they do.

That's the way it is, farewell Walter Cronkite

Walter Cronkite was the first real TV newsreading personality, reading CBS news from 1962 to 1981. His passing brings memories of the sort of newsreader he was, as he was the man who saw Americans get their news from television, for better or for worse.

CBS has much on its website about its greatest newsreader (the successor, Dan Rather was shockingly biased and fell on his sword as a result of it), who is remembered for coverage of the Kennedy assassination, the moon landing (forty years almost to the day) and the Vietnam War.

Curiously, the age of the high profile national news anchor in the US has faded away, as the generation AFTER Cronkite (Dan Rather, Peter Jennings and Tom Brokaw) resigned, died and retired respectively.

Cronkite had his own views, which came out most clearly AFTER he retired from reading news, but he was always the dignified face of US network news. Perhaps only David Brinkley of his era came close to his status.

It is no longer an age where network news is the dominant source of news for Americans. CNN, MSNBC and Fox News all provide national 24 hour news reports, and the internet has eaten away further at audiences. So there wont be another Cronkite, as television news struggles to gain audiences by pandering more and more to being folksy, and covering stories of ephemeral meaninglessness like celebrity happenings. So farewell - he set a standard as perhaps the world's first globally known television newsreader.

Garry Sheeran - 2nd rate reporter

Seriously, why do newspapers in New Zealand continue to pay reporters who can't get their facts right in their stories. The one that has caught my chagrin today is Garry Sheeran in the Sunday Star Times, writing about the idea of Air New Zealand buying Virgin Blue.

Not a big deal? No, maybe not, if you think that checking your facts is important, but I am mere blogger, not one of those paeans of journalism in the New Zealand press. So what did he get wrong?

1. He wrote, "Like virtually any other airline, Virgin could do with extra capital, in its case to stem losses being suffered on its Atlantic routes being flown by its new international carrier V Australia, launched this year". On its what routes Garry? Why didn't you go to the V. Australia website and see the routes the airline flies are from Australia to Los Angeles. Not near the Atlantic is it Garry? Oh you mixed it up with Virgin Atlantic, a different airline, but similar name. Tsk tsk.

2. He wrote "Virgin is moving towards a joint venture with Delta Airlines on their respective Australasia-US routes". Australasia? OK so does Delta fly to anywhere in the South Pacific besides Australia? No. Does V. Australia (or any other Virgin branded airline) fly to the US from anywhere else in the South Pacific besides Australia? No. So why Australasia Garry?

3. He wrote "Though Virgin is not a member of any airline alliance, Delta is the major player in the Skyways Team alliance" The what? It's called Skyteam Garry. There is a website for it. However, guessing it was easier than looking it up online wasn't it? He mentions it again "one of the two leading carriers in the Skyways alliance".

So if you paid for the Sunday Star Times today, ask yourself whether you think it is good value for money to buy a newspaper that publishes lazy inaccuracies.