Reserve Bank Announcement: Deep Economic Pain, TOP Advocates For A ‘debt Reset’ As QE Stimulus

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Tuesday, 25 August 2020, 10:14 amPress Release: The Opportunities Party The Opportunities Party (TOP) is calling on the Reserve Bank to divert its Quantitative Easing programme into wiping out personal and household debt through the introduction of a universal basic income (UBI), following the shocking Reserve Bank figures released this […]

The Opportunities Party (TOP) is calling on the Reserve
Bank to divert its Quantitative Easing programme into wiping
out personal and household debt through the introduction of
a universal basic income (UBI), following the shocking
Reserve Bank figures released this
afternoon.

 TOP leader Geoff Simmons says the
figures reveal the deep economic pain caused by Covid-19 is
still unfolding, and with Reserve Bank interest rate at
close to rock bottom, the Government needs to give the Bank
new levers to stimulate the economy back to
life.“Today’s figures by the Reserve Bank show that
their loan loss provisions are five times higher than
pre-Covid levels in December 2019, which tells us that the
economic pain caused by the virus is far from over. The only
lever that the Reserve Bank has in toolkit is to drop the
official rate of interest, and it’s pretty darn close to
zero right now, with plenty of economic pain to come. Also,
dropping interest rates just encourages individuals and
households to take on more debt at a time when we need to
avoid increasing personal debt if at all
possible.”

“Desperate times call for new ways of
thinking and we are calling on a fundamentally new approach
to Quantitative Easing. The Reserve Bank should continue to
pump cash into our economic system, but in a way that
doesn’t push up asset prices and debt for households. TOP
proposes providing a universal basic income (UBI) of $250
per week to every adult in the county. As a way to push down
individual debt levels, TOP would institute a ‘Debt Jubilee’
policy where by individuals and households with any form of
personal debt – overdue mortgage payments, rent in
arrears, credit card debt, hire purchase agreements in
arrears – would have to divert the UBI to this first,
until out of debt. Those individuals without any debt would
receive the UBI as per TOP policy and because of their low
debt levels could use the additional income to spend and
stimulate the economy.”

“The RBNZ has committed to
buying up to $100 billion of Government bonds in the form of
Quantitative Easing, and we’re still relying on the old
‘trickle down’ effect to see that stimulus passed down
to Kiwi individuals. Instead of the RBNZ following failed
overseas approaches that benefit a few, why don’t they
pass on that money to Kiwis in the form of debt resets and a
universal basic income? This would see real economic
stimulus as Kiwis pay off debts and spend their UBI however
they’d like
to.”

© Scoop Media

 

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