Doesn’t makes sense to borrow to buy

Quote of the day:

Watching the TV1 news this evening, I saw a report indicating a high level of opposition on the part of small business owners to the Government’s proposed asset sales.  And I was depressed all over again at how poorly this issue is understood.

If the average person was asked: Should the government increase the national debt to buy, say, Contact Energy, or Countdown supermarkets, most people would say “Don’t be mad – why would we increase government debt to do that?”

And yet, when the Government proposes to sell a minority interest in some existing businesses – some of them quite risky (e.g. Solid Energy and Air New Zealand) – to reduce its borrowing, a majority of the country reacts in horror.  And yet the two situations are two sides of the same coin.  If it doesn’t make sense to borrow to buy Contact Energy or Countdown, why doesn’t it make sense to sell Meridian Energy and Solid Energy to reduce borrowing? Don Brash

One Response to Doesn’t makes sense to borrow to buy

  1. You’re on fire Ele. Another good post.

    The most frightening thing about that piece is it counted in the xenophobe economic Luddite camp MYOB, and accountancy firm Gilligan and Rowe. Matt Gilligan even said, and I nearly dropped my wine glass, ‘why should we allow dividends to leave the country’.

    Goodness me. Matt needs to read my post on the misinformation regarding foreign pwnership, and especially see if he can refute my proof supposed dividend outflows are irrelevant.

    I can only think this level of unthink is final proof of Antonio Gramsci’s sad victory in our schools.

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