There's a wise old adage out there that goes something like this: "If you find yourself in a hole, stop digging."
To that we might add: "If you find yourself in an inflationary money pit, stop chumming insane amounts of fiat currency into your economy."
But I guess New Zealand didn't get the memo!
Finance Minister Grant Robertson has tacked to the centre, bolting an emergency $1 billion cost-of-living package to his $5.9b health-focused Budget, which was already the largest allocation of new spending.
That money will go towards cash payments of $350 for more than two million people.
The Budget's relative largesse is on display in almost every portfolio. Health is the big winner, but Robertson addressed inflation-induced cost pressures across the public sector.
Oh really, he "addressed inflation-induced cost pressures" by printing more money? That's gonna solve the problem?
From August 1, the Government will offer middle-income earners a one-off payment of $350, handed out in installments over three months.
The payments are targeted at people who earn less than $70,000 and do not receive the winter energy payment. The Government reckons about 2.1 million New Zealanders will qualify.
Sure sure it's all a very noble effort to help bridge the gap between people's budgets and sky-high levels of inflation.
You know what's a better way to do that? Stop creating economic conditions that are favorable for inflation!
Good luck! I'm sorry to say you're going to need it.
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