Mike's Minute: We know about our debt problem, but do we care?

Author
Mike Hosking,
Publish Date
Thu, 17 Sep 2020, 9:59AM

Mike's Minute: We know about our debt problem, but do we care?

Author
Mike Hosking,
Publish Date
Thu, 17 Sep 2020, 9:59AM

The detail is all out there, if you want it. And the great question of this election is, who does?

Oliver Hartwich for example wrote in the Herald on Tuesday, about this mess being the biggest bailout in history. He's right, the debt being produced all over the world is going to haunt us, if not destroy us, for years to come.

Another piece of writing sights the cruise ships, they average $1.5 billion apiece. They are generally leased, and someone owes someone a lot of money. Planes all leased, it's the same deal, and are parked up in the desert. We have hotels that are empty, and those property developers lease to operators. Who is paying all those bills?

The banks are at the end of the debt line, and yes, they have had a good decade of growth to grow the books and soak up the bad days.

But when you combine it all, the debt racked up to businesses that aren't actually in business any more in a proper sense, and the government's whose sole answer is another cheque using printed money, this is going nowhere good.

Oliver Hartwich also points out, and this is where the election comes in, that for a lot of people none of this is front and centre right now. Those who have jobs, those who would be travelling, but aren't and now off to the car yard or out to dinner, those who received government largesse and stuck it in the bank, those who borrowed using government programmes at zero percent then went and paid their mortgage off, are all having a half decent time.

No, they can't go to a rugby match, or travel to Denarau, but a lot of life is pretty good. And what debt Grant Robertson has racked up on the credit card is neither here nor there.

So, you don’t care, if you haven't read where this is going, if you don’t want to know, or even if you do but you dismiss it, then all of this is no big deal, it's someone else's problem, or it's to be dealt with another day.

And that's how governments get away with calamity, Muldoon did it 45 years ago. Thing big, carless days, and high taxes.

"They wouldn't know a deficit if they saw one." That's what he said, and he was right. It's kind of the same again, a lot of harm is being done. But unless it's harmed your doorstep, maybe it's not worth worrying about.

Until it harms us all. And then, it's too late.