Saturday, May 24, 2008

ZenTiger Inflationary spending on track

Well, the markets have spoken and they worry Cullen's Budget (tax cuts and a big pile of spending) are inflationary. Labour flunkies take this as an opportunity to warn National's tax cuts are going to be more inflationary. More inflationary than what?

Tax cuts needn't be inflationary in the right circumstances. Only certain kinds of spending is inflationary. For example, buying a rail system costs about 655 million, but before the money has even been handed over, it’s inflated to 1.4 BILLION. Nice going Cullen.

Related Link at Kiwiblog: Cullen tells the markets the way it is

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