I am so sick of this obvious lie

Graph from Frank MacskasyI am so sick of hearing the blatantly untrue mantra that Labour are the party of debt and deficits, and the Wolf of Wall Street party are more responsible with money.

You only have to look at the figures to realise this is a lie. But it’s a very successful lie, because apparently hardly anyone actually looks at the figures.

Frank Macskasy does, and has been powerfully refuting this bollocks from National MPs and leaders for years now.

And yesterday, Mickysavage from The Standard responded to the latest idiot millionaire (good at making money, not so good at fact-checking National spin) to whom the corporate media has given uncritical voice to trumpet this propaganda:

Rod Drury: “What I’d like to see is the Government have another term because they’ve had two terms where they got the debt sorted …”

Mickysavage: “Such economic illiteracy coming from such a senior businessman is a worry.  It obviously needs to be repeated that in June 2008 Labour had paid off all crown debt and the crowns accounts showed a slight surplus.  By September 2013 net Crown debt had reached $60 billion and increases in debt are predicted for years to come.

Of course many will then trot out Key’s mantra that Labour had left the country with a decade of deficits but this statement is essentially a lie. The Global Financial Crisis was the cause of the sudden change in the country’s finances but instead of Helen Clark and Michael Cullen being blamed I can suggest many other names of those who should take responsibility.  Names such as Wall Street, Morgan Stanley, Bear Stern and my personal favourite Merryl Lynch.  Because it was a bunch of robber merchant bankers that brought the world’s economy to its knees.”

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  1. calebmorgan

    In the interests of thoroughness, I should point out that debt has fallen slightly relative to GDP in the 2013 update to Frank Macskasy’s graph that I include above. Also, it wasn’t just the Clark government that paid off debt – the Bolger and Lange governments did too. This government actually represents a dramatic reversal of three decades of paying off debt since Muldoon. Figures from 1986 to 2013 are here: http://www.tradingeconomics.com/new-zealand/government-debt-to-gdp

    It’s also worth noting of course that debt in dollar terms is still forecast to continue rising for years: http://www.stuff.co.nz/national/politics/9380846/Public-debt-climbs-by-27m-a-day

    • Frank Macskasy

      Kia ora, Caleb,

      Whilst you make valid points, it doesn’t detract from the central argument that National and it’s supporters have been spinning the lie that the 2000-08 Labour government was a government of debt. It clearly was not. It paid down debt; increased funding for public services; and still posted nine consecutive surpluses.

      I believe that’s the central issue here. The Right does not want Labour’s track record to stand, otherwise their own fiscal track record will be held up in comparison.

      • calebmorgan

        I agree – that’s why I didn’t put these provisos in the main text of the blog. They’re not the main point, nor do they cancel it out.

        Indeed they certainly don’t want their record held up to scrutiny (although if it is, they can always blame global financial crises and earthquakes for their choices).

  2. calebmorgan

    Somebody commented on Facebook to the effect that I don’t mention the major events that have happened in the world and NZ since 2008 that could contribute to burgeoning debt.

    To which I respond…

    National have a two-part strategy:

    (a) pretend Labour were bad with debt and money, and would be again, but now the economically responsible National are sorting it out. (But of course this is only true if your definition of ‘responsible with money’ is adhering rigidly to neo-liberal ideology… it’s not empirically demonstrable at all … as the graph shows, empirical data suggests the reverse.)

    (b) when someone points out this empirical data, blame the recession and earthquakes in order to obscure their own choices like lowering taxes for the rich and effectively raising them for the poor. (The irony of course is that the policies they stand for – not to mention John Key as an individual – actually helped cause the recession.)

    This latest blog is written in response to strategy (a), but my very first blog actually responded to strategy (b): http://cutyourhair.wordpress.com/2012/06/15/austerity-says-we-all-need-to-tighten-our-belts-national-says-the-poor-and-the-public-have-to-tighten-their-belts-but-the-rich-can-loosen-theirs/

    • Frank Macskasy

      I’d say that’s a fair evaluation, Caleb. As you rightly point out, National didn’tcause the GFC or earthquakes (though the National Party is part and parcel of the neo-liberal paradigm), so the recessionary effects were beyond their control.

      What irks me – and you’ve touched nicely on it;

      1. Exploiting the situation to castigate Labour. If it hadn’t been for Cullen, New Zealand would not have been at a low debt-level from which to weather the economic storms,

      2. Cutting taxes when we could ill afford to (2009 and 2010). English and Key promised not to borrow for tax cuts and to “ring fence” the cuts/borrowings. Which of course was outright garbage.

      But New Zealanders bought into in and elected Key on his promises…

      We got the tax cuts – funded from other people’s savings.,

      And still the Nats have a reputation for “fiscal prudence”?! Gawd help me, I’m in The Twilight Zone…

      • calebmorgan

        Yip. That’s the central point, and it stands regardless of whether National MPs and supporters baldly lie (strategy a) or make excuses (strategy b): Regardless of GFCs or EQs, the last Labour government were far, far more financially responsible than the current National government.

  3. calebmorgan

    Someone else has said the above graph is “just as bad as National’s” use of stats, because the x axis doesn’t start at zero and is therefore misleading.

    Here’s my response…

    It is misleading, yip – but you can blame tradingeconomics.com (the original source) for that – that’s what their graph automatically defaults to ( http://www.tradingeconomics.com/new-zealand/government-debt-to-gdp ). Not sure why – maybe they always do that to show contrast most strongly, or maybe they figure with a statistic like this it will never really be below 15% because governments always have some debt. It’s pretty standard practice not to start at zero in this kind of situation… but then it’s also a pretty standard (and valid) criticism that it’s misleading.

    Personally I would have preferred it to start at 0. Interesting, the full 1986-2013 graph does start at zero.

    A misleading x axis is certainly not “as bad” as National’s doublespeak … one exaggerates the true situation, the other one says the opposite of what’s true.

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