You Can’t Spend Your Way Out of the Crisis
New Zealand’s prime minister wants to give his country a competitive advantage instead.

“We don’t tell New Zealanders we can stop the global recession, because we can’t,” says Prime Minister John Key, leaning forward in his armchair at his office in the Beehive, the executive wing of New Zealand’s parliament. “What we do tell them is we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with.”

That idea — growing a nation out of recession by improving productivity — puts Mr. Key and his conservative National Party at odds with Washington, Tokyo and Canberra. Those capitals are rolling out billions of dollars in stimulus packages — with taxpayers’ money — to try to prop up growth. That’s “risky,” Mr. Key says. “You’ve saddled future generations with an enormous amount of debt that then they have to repay,” he explains. “There is actually a limit to what governments can do.”

What is the New Zealand government doing?  Regulatory reform to attract more foreign investment and to encourage private development that has been greatly hampered by environmental laws, tax cuts, government spending caps, and reviewing New Zealand’s cap and trade policies with an eye to their economic impact.

Speaking truth to economic idiocy:

…What does he think about populist arguments about the end of capitalism? “Nonsense!”

Watch the investment money flow to New Zealand.

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