Actually, the cupboard is never bare for a sovereign currency issuing Government... So you should never have the wool pulled over your eyes when that argument is used, ever! It is always a political choice as to how and on what the Government spends... It amazes me that people don't connect the dots, when the Governments in the USA and UK bail out the financial sector they are simply spending money into the economy (not that it is a useful way for a government to spend, and funding could be much better directed to grow the economy!). Government spending is not financially constrained in these circumstances. Currency issuing governments do not need to raise funds from taxes or issue debt to spend. Taxes function to regulate demand... Issuing government debt is unnecessary and is just a carryover from gold standard days, but governments around the world, heavily influenced by neo-liberal institutions and advisers haven't caught on to that yet...

Angus, you totally misrepresent my views. I'm not a socialist. I don't agree with the huge sums given to bail out banks, and I don't think Keynes would agree either. I think you confuse government stimulus spending with bailouts... I don't condone bailouts, and this is not what I mean by stimulus spending. Any government stimulus spending in terms of spending on government programmes (not bailouts to the finance sector) was too little anyway, and was withdrawn too early which is why we see the UK for example going back into recession.

Aging populations are going to retire and get sick over the next 20-30 years, leaving a smaller group of passengers working and paying taxes for health care costs and pensions.

Ah, the old 'how are we going to pay for all the retirees in the future' non-issue... 3 points to ponder on: 1. Taxes don't fund anything... taxes are used by a fiat-currency government to regulate demand in an economy. 2. The NZ government will always be able to afford to spend on health care or pensions, it is a political choice on how much to spend or where that spending is directed. 3. Real resources are involved and if the government is allocating X real resources to a pensioner then that may reduce the real resources available for another age cohort when those resources are finite.

Well it's obvious that Angus buys the neo-liberal economic ideology, but in reality governments don't print money, they spend money by crediting bank accounts, and as the fiat currency issuer are not financially constrained in spending... inflation only becomes an issue if the government spending is so great that it buys up all the un-utilised resources in the economy. Very unlikely in this recessionary environment, which is why stimulus spending in various economies hasn't had any inflationary effect.

Yeah, but see that's the problem... everyone, including Labour, the Greens and all NZ's political parties have bought into neo-liberal economics without realising it... NZ is not sliding away under a mountain of debt, if you are referring to sovereign debt. Private debt is another matter, and if NZers are to be able to reduce their debt, then the Government must pick up the slack and spend... The so-called 'debt' problem has mislead most, if not all, economic commentators in NZ... A study of Modern Monetary Theory (MMT) would actually lead to correctly understanding the economic problems we face and the likely solutions to these problems. It's not rocket science!

Why does this farce continue? Because it suits Key to have ACT around. Its nothing to do with seats in the house, as the Epsom seat would be Nationals if it wasn't held by Banks. The only rationale for ACT being around is so that it can be the promoter of loony far-right policies such as charter schools and government spending caps, as part of it's twisting Nationals arm behind it's back in a so called power sharing agreement. What is not commented on is the reality that these are Key and Nationals preferred policies... These are the policies they want for their own idealogical/religious reasons, but know aren't popular with the general public, so use ACT as their cover to implement. So never mind that Banks is ethically and morally corrupt, Key would have done the same in his shoes, as he has in the past and will continue to do in the future no doubt, since the general public let him get away with it...

Ooops... looks like I'm too late to nominate 'Assholocracy'...
As in, we are living, in the age of the assholocracy. Just witness the Republican contenders for the USA presidency, or the whole Arab Spring thing which has been a process of bringing down assholocracies. Italy suffered under one until recently. Russia and Syria are now protesting against their own crooked assholocracies... and then there's NZ...