Economics from a different Labour candidate

A commentator at The Standard said:

The second biggest NZ political deception of a lifetime is Labour claiming that our country cannot afford to keep the retirement age at 65. Money is created electronically by keystrokes by the Reserve Bank. How can we run out of money to pay super at 65?

Now normally what a blog commenter says is of no importance. But this commenter was in fact an official candidate for the NZ Labour Party. He’d be a Labour MP if they had got enough votes when he stood.

The fact someone with such economic illiteracy can get through candidate selection is a worry. He thinks money can just be created by keystroke by the Reserve Bank, without realising doing so would devalue the currency massively so that it becomes worthless. If one could just create new money by central bank fiat without bad consequences, then every nation on earth would do it.

This is not 101. This is 3rd form economics.

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