From ELECTRONZ – 441 Weekly international Ezine focusing on the New Economics 2 November 2004

For a country just reaching 4 million people, the idea of Student Debts passing $7 Billions, when it is less than 20 years old, causes us to wonder if we are hearing it wrong. But it is a fact. If such a debt were inevitable; and if it were the only debt, such could be tolerated.

Firstly, this country survived as a peaceful democracy for 100 years without any Student Debt, so it could hardly be argued as inescapable. In short, it was the “brainchild” of the monetarist cabal which hijacked the Labour Party in 1984, and like the deregistration of the whole finance industry, it was part of the payback to the NZ Business Round Table, whose members had paid for most of the Labour Party’s expensive and successful Election Campaign.

Weakening the Workers Unions, and reducing the Taxation Rates for the wealthy, was in the same package.

Student Loans are part of the massive legal rip-off under which the privately owned banking system is allowed to exercise the state’s prerogative of creating the national Money Supply (which could be spent into circulation by the government as a means of reducing taxation, as recommended on the Robertson & Huber Submissions), and the banks then lend their newly created credit to people, governments at all levels, and business enterprises at commercial rates of interest. But the total debt load is frightening.

Freelance writer Alun Fosta of Northland provides a contribution that clearly shows how the present arrangement, if allowed to continue, will inevitably drown what was a prosperous population, in a sea of expensive, un-necessary and unwanted debts.

He writes:
“Student loans are $7 Billion and rising, as the debt clock ticks on like a time bomb. The University of Canterbury Students’ Association launched its ‘debt clock’ in May 2002. The clock started at around $5 Billion, has now passed $7 Billion, and is ticking along, apparently, at $40,000.00 per hour.

New Zealand Government Overseas Debt

Don Brash, while Governor of the Reserve Bank, said, in a speech to the Christchurch Chamber of Commerce, in January 2002: “It is also worth noting that the New Zealand Government now has no net foreign currency debt. The small amount of foreign currency Government Debt is fully matched by foreign currency assets held by the Treasury and the Reserve Bank.”

But look at the figures below, obtained directly from the New Zealand Reserve Bank website at www.rbnz.govt,nz/statsitics/extfin/e1/data.html and form your own conclusions.
Date External Debt Foreign Currency Assets Difference

March 2001
$16.9 Billion $ 8.56 Billion $8.34 Billion(1)
March 2004 $18.18 Billion $10.70 Billion $7.48 Billion(2)

But wait, there’s more.

The Government’s Overseas Debt is but a small proportion of its overall debt, as can be seen from the second set of figures:

( Net. See (1) above)

External Debt
Internal Debt Total Debt
March 2001 $8.34 Billion $27.25 Billion $35.59 Bn
March 2004 $7.48 Billion $35.50 Billion $42.98 Bn

The $42.98 Billion means that every man, woman and child in New Zealand (assuming 4 million) owes around $10,750.

But wait, there’s more.

The $10,750 represents only what each New Zealander owes on behalf of the Government. Let us now consider the local situation here in Northland. The Far North District Council’s debt, according to a press release issued November 25, 2003, is $34.30 Million (and set to rise).

The population of Northland, according to the 2001 census, is 57,900 Divide $34.30 Million by 57,900 and you come up with $592.40. So, in addition to the $10,750 we all owe to the rulers in Wellington, we owe an additional $592.40 to the rulers in Kaikohe.

But wait, there’s more.

New Zealand Corporate overseas debt amounts to $123.449 Billion which, when added to the Government’s Overseas Debt amounts to a staggering $ 141.63 Billion. The GDP of New Zealand is $137.1 Billion, which means that we owe more overseas than we produce in a year.

But wait, there’s more.

Personal debt in New Zealand now amounts to $190.07 Billion, which means that very New Zealander personally owes $47,517.00 — in addition to the $11,342.40 owed by the two levels of government shown above. Personal debt in New Zealand has gone up by $18.272 Billion in the last 12 months, which means that every New Zealander has gone a further $4568 into debt.

Have you ever wondered why, no matter which government/parties are in control, no debt level has gone down?

Have you ever wondered why, since the present ‘debt money system’ is such a total disaster, no alternative is even suggested, never mind tried?

Have you ever wondered why, when/if the Government needs say $1,000,000.00, it prints up a $1,000,000.00 of Bonds, gives them to a bank which then literally creates $1,000,000.00 out of nothing, and lends it to the Government at whatever interest rate it can get? What is to stop the Government creating the $1,000,000.00 interest- and debt-free and spending it into the economy?

I recently asked this very question of National’s finance spokesman, Mr. John Key, and his answer was that there is nothing to stop the Government doing just that. The problem is, of course, that if that kind of monetary system were to be introduced, the moneylenders would cease to be the slave masters, which they are now”.

Our Comment: Before waving the white flag of surrender to the debt merchants and their puppets in the Beehive, take heart from the way the duly elected First Labour Government took control of the finance industry, and used the Reserve Bank at only a 1% Service Charge to backstop a raft of government policies, giving the economy such a jet-propelled boost that it took “Godzone” up to 3rd highest on the World Living Standard Index. (The debt merchants then regained control of the Parliamentary Beehive, and N.Z. has so far slid back to about 23rd place on the Index).


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