One of US President Barack Obama’s top financial advisors has given New Zealand a big pat on the back for financial management during the current global financial crisis:
This week, in a major international BBC debate on rescuing the world economy, Peter Orszag, Obama’s Director of the Office of Management and Budget until 2010, opposed the austerity only position taken by the IMF’s Chairman Christine Lagarde, and Wolfgang Schauble, German Minister of Finance,’ Mr Ryall said..
‘Mrs Lagarde and Mr Schauble said cutting spending was difficult but necessary. But Mr Orszag said it was better to take a mixed approach – with stimulus for the economy combined with deficit reduction that is put in place now but which takes effect over time.
‘President Obama’s former senior aide singled out New Zealand alone as the model for its balanced approach to the deepening international debt crisis,’ Mr Ryall said.
‘Mr Orszag said: … “for most countries it’s better to combine deficit reduction that you put in place now but that takes effect over time, with if anything, additional support, and that means stimulus, for the economy, effective immediately. And what’s interesting about the fiscal monitor the IMF published also as part of these meetings, is if you look across all the developed countries, there is only one country… which has actually done that, which is New Zealand- who have coupled additional stimulus with medium-term fiscal consolidation. That’s the right policy combination.”(BBC ‘World Debate – Rescuing the Global Economy – What Next?’)